You have probably all been touched by it. People you never thought would lose their homes to foreclosure are finding themselves in that horrible, horrible position. My own brother is one of them, so I know it’s widespread, and don’t think for a minute we’re through it yet.

I don’t care that the Federal Govt. has extended the $8,000 tax credit for first time home buyers and is now even offering up to $6,500 for repeat buyers -after all that’s what they do best -GIVE AWAY MONEY WE DON’T HAVE!

If you you look yourself in the mirror and tell the truth, these tax credits are quite possibly putting more under-qualified buyers in homes they very likely will get in trouble with later. And worse, these artificial blips in the housing numbers due to govt giveaways just prolong the agony of the recession. Look at Cash for Clunkers. Car sales fell flat the minute that giveaway ended.

But I digress. My Hikers Beware has to do with people walking away from their homes with foreclosure looming only to learn that the bank never followed through on the foreclosure action and they are still on title as the legal owner.

In otherwords they’re on the hook legally if it turns into a crack house or someone gets hurt on the property. If it’s in a subdivision or association, they’re still liable for maintenance fees and/or association dues. And they can’t qualify for other housing (senior subsidized rental housing, for example) while still an owner of the property they walked away from, and on and on.

I wish I knew how to advise you to get your name offthe title if you’ve found yourself in the unfortunate walkaway situation, but just be advised the problem exists and try your best to get your mortgage servicer to follow through on the foreclosure getting you off title!

That’s my Tip of the Day!

Phone: (808) 896-1943
eMail: Mike@MikeSells.com
my ‘Grassroots’ blog: GetOffYourButts.net

“Yeah, no more taking advantage of people! “

I’ve blogged about this before in “Clamp Down on Mortgage Lenders?” back in 2007 when the subprime meltdown was just starting. But obviously I need to say it again.

We are in the process of refinancing our mortgage through Bank of America (a Big recipient of TARP funds after agreeing under pressure from then Treasury Secretary Paulson to buy Merrill Lynch), so as soon as we got credit approval and all our paperwork passed muster we receive a HUGE package. I’m talking $8.70 in postage huge!

The bundle included a 75-page book called Application Disclosure Handbook, a copy of our appraisal (this part is totally good-everyone who pays $665 for an appraisal should get a copy of it!), and all the documents that relate to our application, 27 more pages. So I say to myself,  this is probably good, everything you need to know all right here for sometime when I have about 3 hours dead time or a bad case of insomnia! But as soon as I start reading it I am bombarded with blatant mistakes right from the first page!

First of all, the address is wrong. Despite having corrected it on the application from the very beginning we can’t seem to get that across to anyone. The interest rate does not match what we have locked our loan at, but what’s a half a percentage point among friends? Next, we have applied for a 5-year interest only loan, but the paperwork says the term is 30 years. Later I find out this is because it becomes an adjustable rate ARM after 5 years. Oh yes, and the loan amount is wrong. They include 3 TILs (Truth in Lending) Disclosure Statements -3 copies of the same thing, all wrong. And an amortization schedule which is incorrect, and on and on.

I could just scream!!!! 

WE JUST NEED THE BASICS. I mean who is going to read over 100 pages from their lender and understand it – especially when there are blaring mistakes from the get-go? Nobody that’s who. Mission accomplished I guess. They don’t really want to make it understandable, they just want to say they are making it understandable, you know so they can say they did something.

So I said it before and I’ll say it again. KISS, keep it simple stupid. This is all we really need to know.

1. What is my loan amount?
2. What is my interest rate?
3. When do I have to pay it off or refinance?
4. How much do I pay every month?
5. When will the interest rate adjust?
6. Is there a pre-payment penalty and if so, how much will it cost me?

Just the facts mam. ALL ON 1 PAGE, IN BOLD PRINT about 16 point font.

That’s my Tip of the Day!

Aloha, “Mikie”

Mikie Likes It LLC
Realtor Referrals

Michelle Kerr
(Principal Broker/Owner)

Phone: (808) 896-1943
eMail: Mike@MikeSells.com
websites:
GetOffYourButts.net
MikeSells.com

One logical question though, is how much real value has my property lost? Somehow I got a hunch it may be more than the 10.8% decrease reflected in the lower assessment. But since I can’t do anything about the market, I’ll take the lower taxes.

If you are curious, here’s how the property taxes are calculated.

Net Taxable Value x Tax Rate / $1000 = Taxes Due

Of course, there’s a lot more that goes into understanding the property tax levied on a particular property so I have included a copy of the Real Property Tax General Information here. 2008-2009-real-prop-tax-rates-info.pdf

The basics to understand is that if you are a homeowner (defined as owning the home and occupying it more than 200 calendar days/year), your’re eligible for the lowest tax rate available (unless of course, you’re a Charlie Rangle, Tim Geithner or one of the special people). It doesn’t happen automatically though, you must notify the county of your declared owner occupancy status on or before December 31st or June 30th of the year it becomes your principal residence, or you’ll automatically pay the higher (”Investor” rate) non-owner occupant rate until you do notify them. That could be an expensive mistake if you miss the deadline as the higher rate is currently $8.10/$1000 of assessed value vs the Homeowner rate of $5.55/$1000 of assessed value.

Some other items taken into consideration to arrive at your particular ‘net taxable value’ are:  age, whether or not you have certain disabilities (sight or hearing impairment or Hansens’s Disease, for example) or if you are a totally disabled veteran. At any rate, nobody likes to throw money away (considering they spend it so wisely . . .  ;o) so it definitely pays to check it out. If you have any questions, call (808) 961-8282, the County of Hawaii’s Real Property Tax office.

That’s my Tip of the Day!

Aloha, “Mikie”

Mikie Likes It LLC
Realtor Referrals

Michelle Kerr
(Principal Broker/Owner)

Phone: (808) 896-1943
eMail: Mike@MikeSells.com
website: MikeSells.com

Oh yeah, I did say that didn’t I? Yep and with good reason. I was seeing it in the MLS every day. The figures were going one direction only and there was no reason to believe otherwise. After all, except from maybe the National Association of Realtors who have to keep up a happy face, the news EVERY day on TV and the radio and in print was if anything, continually more grim than the day before. So I told them don’t buy yet. Prices are going down. That condo you just have to have because it’s walking distance to the beach is gonna be less expensive 6 months from now, and less than that a year later.

Well, they bought it anyway. From me? No, they went directly to the seller’s agent (who naturally, and legally bound by the laws of agency, encouraged what was in the best interest of their client, the seller) and bought the dream condo near the beach.

Okay, fast forward to now, a year or so later. One day recently with some time to kill, I called my friend/client to invite her for a coffee or lunch. She declines, too busy she says, since she’s starting a new job. And then she says:

“If only we’d heard you last year!”

Yes, our neighbors just sold the same condo for $100,000 less! And our tenants are leaving at the end of the month and now all of a sudden for the first time in years, my husband has no work lined up!”

YIKERS! Well to every cloud there is a silver lining. TALK ABOUT AN OPPORTUNITY FOR A BUYER NOW! That’s right. The market is what it is, but there are some very real buying opportunities (as evidenced by the bump up in sales in December that surprised many) if you are astute enough to recognize them. With the help of a good Realtor who has your best interests in mind (that agency thing again), and who has been closely following the market, you can find these things, and sadly perhaps to someone else’s dismay, score a property that has your name on it.

That’s my Tip of the Day!
  

Aloha, “Mikie”

Mikie Likes It LLC
Realtor Referrals

Michelle Kerr
(Principal Broker/Owner)

Phone: (808) 896-1943
eMail: Mike@MikeSells.com
website: MikeSells.com

I’m thinking of a conversation I had just last week with a friend who asked me about dropping his price to below the $1M mark. There are several answers. The quick answer in this market is that a lower price is probably always better, but how much lower is the question. I told him if he’s just dropping it to get under the $1M threshold, it probably won’t make any difference, there just aren’t many buyers right now.

He was glad I said that because he didn’t think it would make any difference either. He mentioned he and his wife were of a different opinion, so I offered to give his wife a call and tell her about our conversation. Now understand these people are not my clients, but you know friends, right? (good thing I’m not a doctor!).

So here I go ~ ring-a-ding . . . . :  “Hello Mrs. Seller, I just spoke to John about dropping the price of your house just slightly to get it below the big $1 Million benchmark, but honestly I don’t really think a small drop will send a very exciting message. You know there are buyers but they’re hangin’ back still sucking their thumbs waiting for a real bargain.” And surprisingly she tells me:

“Well I think it’s John you need to talk to then, not me. You see I’m willing to drop it as low as we need to! It’s he who has had the price too high all along!”

Wow, was I surprised! Here she is willing to swallow the bitter pill so they can get on with their lives and it’s he still hanging on to the idea their house is worth what it used to be, you know a couple years ago. She totally gets it -when they move they’ll be downsizing and buying into a much lower level and likely recover much of their imagined loss. And she expounded further. They don’t have a mortgage and have just about $500,000 invested in the house, so they really can make some intelligent decisions. If they just would. Okay, this sheds a whole new light on the situation. Now that I understand the circumstances surrounding this sale my advise is very different.

I told them, you gotta knock the price so low it will be like a bucket of cold water to agents and also grab the attention of those buyers on the sidelines. You want every agent that sees the price reduction to pick up the phone and start calling clients, and you want every real buyer to call their agent to check this out. That’s the way to get this puppy sold. DO IT! Take some bold action and get ‘er done.

That’s my Tip of the Day!

Aloha, Mike

Mikie Likes It LLC
Realtor Referrals

Michelle Kerr
(Principal Broker/Owner)

Waikoloa, Hawaii
Phone: (808) 896-1943
eMail: Mike@MikeSells.com
website: MikeSells.com

The ConCon is a constitutional convention and Hawaii hasn’t had one in 30 years, way overdue IMHO. The ConCon allows us to amend the State Constitution. Delegates are elected from all the islands to review and revisit the laws and make improvements and changes to our state government addressing things that never seem to get done by our legislature.

The short story is the that local and national teachers’ unions as well as the sitting majority in the State Legislature are all against a ConCon. Any time you have big money from outside paying for ads against something you probably want to look closer and see what they are fighting so hard to protect. I’ll tell you in 2 words:

“turf and power!”

Some of what proponents of a ConCon would like to do it is decentralize the Dept of Education. One DOE and BOE for the entire state located in Honolulu and totally Oahu-centric is simply out-dated. It’s inefficient and our schools and the kids pay the price.

And what about term limits for judges? HOW ABOUT TERM LIMITS FOR EVERYONE??? (would be my suggestion after watching our Congress perform so brilliantly of late), or balanced budget initiatives, there’s a concept, huh? And what about protecting our environment and agricultural lands? The point is, if we have a ConCon we get to decide what issues are important, if not, the legislators get to decide and we see where that’s taken us over the past 30 years!

And the ConCon vote which was mandated every decade to give the people a vote is rigged against us anyway. When it last came to a vote in 1996, it passed. There were more “yes” votes than “no” votes. So what did they do? They changed the rules. They got our corrupt State Supreme Court to strike down the people’s choice by declaring that any blank votes would be counted as “no” votes.  Well that sort of takes away any reason to vote doesn’t it? But it happens here in Hawaii and they get away with it.

Can you believe it? I couldn’t then and I’M STILL AMAZED THAT THE BLANK VOTE BULL-CRAP (sorry, there is no other way to say it) still stands. In fact that ruling carried over to all ballot initiatives since, and if you think it’s hard to inject change into this “old boy” system you are RIGHT!

 So I say, let’s have a ConCon and see what the people want for a change.

Aloha, “Mikie”

Mikie Likes It LLC
Realtor Referrals & Mortgage Freedom

Waikoloa, Hawaii
Phone: (808) 896-1943
eMail: Mike@MikeSells.com
website: MikeSells.com

When they’re gearing up for it, moving here is the biggest thing on their minds occupying every waking hour fantisizing, packing and celebrating. THEY CAN’T WAIT – THEY’RE MOVING TO HAWAII!

I don’t know what it is, but I have witnessed it enough over the years to know it’s a real phenom. When I was in college at UH Manoa I saw it all the time, though then it was more boyfriend-girlfriend stuff or not being able to get the right job, but I have seen it repeated over and over. The crux of it I think is poor planning. One lady I knew arrived a week before her job started without a place to even hang her hat, not to mention an entire house of furniture on the way -mainland style stuff at that, and over 500 books in cardboard boxes!

Unfortunately, this person ended up being a tenant of ours. On our very first meeting she begged me for a 3-year lease. Don’t worry, I didn’t just fall off the turnip truck.

“We may not even like each other after 6 months, so there’s no way we’re doing a 3-year lease!”

And now barely a year later, she’s gone -whoosh, like a cool breeze. Here today, gone to Maui. No actually it was back to Colorado. And people get a very different idea of the Big Island when they’re here on vacation. I used to say in response to their “Oh we’ve been coming every year for the last 15 years”.

“Yes, so you’ve bought the place by now, you just don’t own it!”.

Living here, dealing with getting your kids in school, coping with no car washes -OMG, no garbage pick-up or home mail delivery in many places, etc., etc., is quite a different animal and Hawaii is not for everyone!

So what’s a person to do? Well, especially now with the added expense of getting here, not to mention shipping your stuff, you’ve got to take it seriously, plan better and come with the idea that it’s an adventure. Look upon it as an opportunity to raise your kids in a safer, more wholesome environment where you have unspoiled beauty every place you look. Take advantage of our beautiful beaches, and jump right into our mix of different cultures, languages, people and food. Realize no place is perfect and if you think you’re able to run from your problems, think again. Do your home work and, yes even though I make my living selling houses, I say be willing to rent for a while first to get acqainted with the different areas, climates and weather conditions around the island-before you plunge right in. After all, we all want happy clients and neighbors!

That’s my Tip of the Day!

Aloha, “Mikie”

Mikie Likes It LLC
Realtor Referrals & Mortgage Freedom

Waikoloa, Hawaii
Phone: (808) 896-1943
eMail: Mike@MikeSells.com
website: MikeSells.com

Like many things, the abbreviation became the word. FICO stands for Fair Issac Corporation and a FICO score according to our friend Wikipedia, is a number that represents the credit worthiness of a borrower.

Engineer Bill Fair and mathematician Earl Isaac founded Fair Isaac Corporation in 1956— with an initial investment of $400 each — on the principle that data, used intelligently, can improve business decisions.  (I’ll bet a few sub-prime lenders of late wished they had adhered more stringently to the used intelligently part of that principle).

According to Dian Hymer, a Realtor in the San Francisco Bay Area, syndicated columnist and a fellow CRS (Certified Residential Specialist) the credit score from Fair Issac uses 5 types of information to calculate a credit score.

1. Payment History (that’s why you don’t want to be late!)
2. Amounts Owed (are you tapped out yet?)
3. Length of Credit History (at least a couple years shows stability)
4. New Credit (please don’t buy a car just before you want a mortgage!)
5. Types of Credit in Use (credit cards, other mortgages, personal loans)

Credit scores which were ignored or carried less weight in the past area more critical today in determining who will get a loan and who will be denied, so if your credit is a-hurtin’ you may want to seek advise from a mortgage broker, your local credit union or your banker and see what you can do to improve that ever-important FICO!

That’s my Tip of the Day!

Aloha, “Mikie”

Mikie Likes It LLC
Realtor Referrals & Mortgage Freedom

Waikoloa, Hawaii
Phone: (808) 896-1943
eMail: Mike@MikeSells.com
website: MikeSells.com

But what he wanted to know about was lease options as a vehicle to get his house sold, having tried everything else. By everything else I mean he’s taken it off the market for awhile, he has lowered the price some, he had his Realtor tweak the wording in MLS (hey, it’s 1.552 acres, not 1.5!), he even considered doing the Wall Street Journal bit -you know for those rich people wanting a 2nd home in Hawaii, etc. So he figures maybe a lease option would allow someone who is having trouble getting a mortgage, buy his house.

“DO YOU KNOW HOW A LEASE-OPTION WORKS?”

“Well no not really”, he says (that’s a future blog), so I give him the run-down. But in the end I tell him IT’S ALL ABOUT PRICE, and more than a little patience until buyers come back. And if you don’t believe it just go check out Ruth’s Chris Steak House.

We went to The Shops at Mauna Lani last night to our local RCSH with our friends Carmine & Judy for the 3-course ‘Prime Time Dinner Menu’ which includes salad, an entree choice, a side dish selection and dessert starting at $39.95! Oh yeah, I forgot to mention, THE PLACE WAS PACKED!

As anyone on the Big Island can tell you, if the restaurants aren’t offering some pretty sweet deals right now, customers are staying home or going where the deals are. Real Estate is no different.

That’s my Tip of the Day!

Aloha, “Mikie”

Mikie Likes It LLC
Realtor Referrals & Mortgage Freedom

Waikoloa, Hawaii
Phone: (808) 896-1943
eMail: Mike@MikeSells.com
website: MikeSells.com

“I had to drive all the way to Kona for a class in ethics! Why do I have to sit through this stuff? It’s so boring”, etc.

If you’ve been blessed with teenage children, you’ve no doubt heard this refrain, but down deep, I honestly felt put upon because I had the attitude that you can’t teach someone ethics -you either got ‘em or you don’t. I even took a magazine with me to better occupy myself should it get really dry, but I have to admit I was drawn in and then scared to death hearing all the ways I had probably inadvertantly breached our Realtor Code of Ethics without even knowing it!

Did you know that REALTORS are issued pocket IDs which are required to be kept in our possession at all times? It’s true. And yes, I may have been guilty there (gasp, gasp) a time or two, and while that resides on the silly end of the ethics spectrum, by and large these rules and guidelines are there to protect the public, so they are a good idea.

For example, speaking to a walk-in at an Open House, where you are the Seller’s agent and an unaccompanied buyer-prospect comes in the door. Almost as soon as that prospect begins to ask you questions about the house or more particularly about the Sellers, like Gee why are they selling? or Have they had any offers yet? or maybe even, How much will they take?, you are bound by the COE to immediately acertain if that prospect is working with an agent and to let them know you represent the Sellers exclusively. You have to be extremely careful of the Seller’s private information and you can never reveal even the most simple fact like, “they are getting a divorce and have to sell”.

NAR tries to make the public aware that they have a right to expect ethical behavior from its members. In fact, our Purchase Contract says right at the top:

“Buyer and Seller are aware that the National Association of REALTORS holds its members accountable for their actions through a strict Professional Code of Ethics which includes a grievance system to address complaints. Non-members are not held to the same standards, nor are they required to participate in the grievance system.”

So as card-carrying (I’ll try to do better, I promise) members of the NAR, we REALTORS need to always hold our clients best interests at heart and before our own, and as consumers you need to be sure you use REALTORS, not just real estate agents, in your real estate dealings and you need to HOLD OUR FEET TO THE FIRE!

That’s my Tip of the Day!

Aloha, “Mikie” Mikie Likes It LLC
Realtor Referrals & Mortgage Freedom  Waikoloa, Hawaii
Phone: (808) 896-1943
eMail: Mike@MikeSells.com
website: MikeSells.com