Archive for October, 2007

Have you ever bought something and then worried about whether or not you should have done it? This is really a common experience and is known as buyer’s remorse. Even though it is not unusual, it causes distress when it occurs. Here are some typical symptoms of buyer’s remorse:

“I PAID TOO MUCH!”
After all the negotiating is done, the buyer begins to wonder if he or she could have gotten the property for less. This is often aggravated by a well meaning friend or relative who thinks you paid too much when compared to what he or she paid for their home. Remember, every piece of real estate is unique and cannot be compared on an apple for apple basis with any other property.

“I ACTED TOO QUICKLY”
Sometimes people get so wrapped up emotionally in buying a home that they need to come down from the euphoria of getting their dream home. Two or three days after the purchase, buyers may begin to question various aspects of the transaction including timing. “ Did I act in haste?” “Should I have thought it over longer?” It is not unusual to feel you moved too fast. At a time like this, rely on your instincts. You bought because you felt it was the right thing to do.

“I DIDN’T SEE ENOUGH HOMES”
After the purchase, a buyer often begins to think about the shortcomings of the property. Perhaps the master bedroom is not quite as large as originally desired. Or, more decorating may be required. If you find yourself having these feelings, it is essential that you recognize that there is no such thing as a perfect house. You bought this property because of its strengths and you will have to, as in all purchases, accommodate yourself to its shortcomings. Every home has them.

ADVICE:
Buyer’s remorse is normal and usually occurs in some form. The best way to feel good about a real estate purchase is to use the services of a professional who can provide all the information and assistance you need to make an informed decision. The best professional for this job is a Realtor®. So, call me if I can be of assistance.

Until recently, homes were always sold to buyers in an “as is” condition. The “as is” clause in the agreement of sale means that the buyer understood that he or she was buying the home in its present condition. If the present condition included hidden defects, the buyer had no recourse for repair costs.

With the advent of consumerism, the “as is” clause does not prevent the buyer from seeking help in repairing certain defects found after the sale has been completed. In fact, many buyers are including a clause in their offer that makes the offer contingent upon a satisfactory home inspection by a qualified inspection service. This inspection really benefits both the buyer and the seller. The buyer knows that a trained expert has reviewed the most costly repair items in the home. The seller can move on to the next home knowing that the buyer accepts the condition of the property based on expert advice.

The items covered in a home inspection usually include the root, basement, heating system, plumbing system, electrical system, kitchen appliances, and overall structural soundness. A detailed written report is rendered to the buyer with comments on any items found to be defective. Once the report is reviewed, the buyer can decide to go ahead with the purchase without asking for a renegotiation of the terms of sale. Or, the buyer can amend his or her offer to allow for the additional costs that will be incurred to make necessary repairs.

If you are going to be buying a home in the future, you should consider making your offer contingent upon a satisfactory home inspection. If you will be selling your home in the future, it would be wise to repair any defective items before putting your home on the market. These repairs would provide you with additional selling points to make your home more attractive to a potential buyer.

ADVICE:
As in pricing, financing, and negotiating a home purchase, the home inspection is another factor that should be handled in a professional manner. Use the expert in real estate. Use a REALTOR® and a certified home inspector for your advantage.

Certain misunderstandings exist regarding the purpose and proper handling of an earnest money deposit given by the buyer in a real estate transaction. In fact, disputes over forfeiture of a deposit are quite common. So, to avoid problems in a future real estate purchase, let’s look at the role that the deposit plays in buying real estate.

DEFINITION:
The earnest money deposit is a sum of money paid by the buyer at the time of submitting an offer to purchase real estate.

PURPOSE:
The purpose of the deposit is to show “good faith” by the buyer that he or she intends to follow through with the terms of the sales agreement. If the buyer does not live up to the agreement, the deposit shall be forfeited to the seller as payment for any damages suffered by the seller as a result of the sale not being completed as planned.

AMOUNT:
The amount of the deposit varies in different areas depending upon local custom or the specific needs of a particular transaction. The size of the deposit will have an effect on the desirability of the offer. Many buyers have won properties away from competing offers only because they gave a larger deposit than others being considered by the seller. If you really want a piece of property, make your deposit large enough to help your offer win acceptance. As a minimum, in Oahu real estate transactions, I generally prescribe an amount equal to $1000 per $100,000 value of the property being purchased up to a $1 million purchase price. Above $1 million, the amount varies. So, if you were planning to purchase a $500,000 property, I would suggest $5000 as the MINIMUM earnest money amount necessary to secure your offer. A higher amount might be more appropriate depending on the buyer’s goals and active competition for the subject property.

ADVICE:
Always buy through a Realtor® so you may have the assistance of a professional when making an offer on your next home. I would be glad to assist you if you have any questions.

If you want to see the Hawaii Superferry operate, please read on. The opponents are gathering their forces on each island. Currently the polls show that 80% of Oahu and 67% of the neighbor islands [each island polled separately and equally] are in support of the Ferry operating.

If the silent majority remains silent, this and other opportunities like this will be missed.

Attached is the link to show support for the Superferry. It only takes a minute to register. Sign the Petition and pass link to other friends. http://www.hawaiisuperferryfriends.com/main/petition

The Honolulu Advertiser (specifically Staff Writer Andrew Gomes) reported this past week that the median price of O’ahu single-family homes sold during the third quarter was up 2.3 percent over the same quarter last year, though median prices in six of 12 regions on the island were lower, according to a quarterly report from the Honolulu Board of Realtors.

Higher median prices in Diamond Head, Hawai’i Kai, Central O’ahu, the Leeward Coast, Waipahu and Pearl City helped boost O’ahu’s overall median sale price to $649,900 in the quarter, up from $635,000 a year earlier.

Median prices were lower for metro O’ahu, Kailua, Kane’ohe, the ‘Ewa Plain, the North Shore and Makakilo.

Condominiums sold for a median $330,000 in the third quarter, up 4.8 percent from $315,000 in the 2006 third quarter, the report said.

Median condo prices were up in five of 12 regions — Kailua, Kane’ohe, Makakilo, Pearl City and the Island’s biggest condo market, metro O’ahu. Regions with lower median prices were Diamond Head, Hawai’i Kai, the North Shore, Central O’ahu, the Leeward Coast, the ‘Ewa Plain and Waipahu.

The median is a point where half the sales were for more and half for less. Generally, median prices are affected by changes in property value as well as any significant shift in the volume of homes sold in different regions and neighborhoods.

Make your Buyer’s Agent do the research

When you find homes you want more information on, make your Buyer’s Agent do the research. Your Buyer’s Agent typically has access to real estate software that can look up tax information, compile CMA’s that help estimate whether or not a home is overpriced, and perhaps even look up past sales of the home you are interested in. In addition, your Buyer’s Agent, as a Real Estate Agent, will be able to have a casual, non-sales pitch conversation with the Seller’s Agent that may uncover some useful information that you, the buyer, can use later. Your Buyer’s Agent is trained and experienced in real estate and knows the tricks-of-the-trade, common sales techniques and marketing methods used by Seller’s Agents. Seller’s Agents have a legal obligation to sell the house to anyone they can for as much as they can as quickly as they can.

Be ready at a moment’s notice

If you find a house that seems too good to be true, don’t wait. Chances are you are not the only one. Call your Buyer’s Agent immediately to schedule a showing as soon as possible. Your Buyer’s Agent can bring the research to the showing. All too often buyers get discouraged as homes they like are sold before they get a chance to see them. If this happens to you even a couple of times, you may get frustrated and lose faith. Be ready to go see a house you like at a moment’s notice.

Some Common Sales Techniques and Marketing Methods

As you are browsing ads, you will start to notice trends. The first of which will be that almost every house is in “good” or “great” condition. You need to remember that the Seller’s Agent has the job of selling that house. They need to do their job and do it well. They do not want to, and in some cases, cannot scare people away. For that reason, every Seller’s Agent will want to say that the house is in “great” condition. If the ad says the house is in anything less than “great” condition, that can mean there is a defect with the house so obvious and impossible to overlook that it is keeping the Seller’s Agent from saying the house is in “great”condition. However, do not be unnecessarily discouraged. It may also mean that the interior simply needs new paint. The second trend you will notice is that the written description of each house is generally the same.

Other information to look out for

There are two other items to look for when browsing homes. If given, make sure to note the “Days on Market” number, sometimes called the “DOM”. This number might save you time and effort looking at homes that seem like a good deal that actually aren’t. Know your market or have your Buyer’s Agent do research on the average “days on market” figures for the areas you are looking in. If the average DOM for a certain area is, for instance, 56 days and you see a house that’s been on the market for 187 days, chances are there is a valid reason why it hasn’t sold. If it were a great deal, it would have sold already.

The other item to look for is a home that, when compared to other homes in your price range, doesn’t seem to belong. If the home looks too good to be true, you need to have your Buyer’s Agent do the research on it as quickly as possible. Chances are if the house seems to be under-priced, again, there is a reason for it. Every Seller’s Agent is legally obligated to sell the house for as much money as possible. If the Seller’s Agent has priced the house that low, chances are the house needs some sort of repairs or has some trait that is lowering its value.

However, just because a house has been on the market a while, is under-priced or overpriced, or needs some repairs does not always mean you should turn and run. Sometimes a house that is overpriced or that has been on the market a while will be “Reduced”. Reduced-priced homes are generally advertised all over again at the lower price to re-generate interest. If you are lucky, a home you liked that was once overpriced may come down to your price range.

Fixer-uppers also are not all bad. You just need to know what you are getting yourself into. A fixer-upper may turn out to be a good investment. If you are absolutely sure of the area you want to live in, but find that homes in that area are out of your price range, a fixer-upper may be the way to go. You can get a home you can afford and spend a year or two fixing it up. If the fixes are not too major, you may be able to dramatically increase the value of the home, thereby building equity quickly.

If you are in the market for a fixer-upper, you need to ask yourself some very serious questions. One, do you really want to spend the time and money it would take to fix up the home? How valuable is your time? Do you even have the money? You’ve just added a new mortgage payment to your budget and now you have to find more money to fix the home you bought. Is that OK with you?

Where to look

Online

The most common place home buyers search for homes for sale is online. Realtor.com
and HiCentral.com, Although I am partial to my website (www.JonMann4Homes.com), as it has more pictures. With the advent of technology and the creation of a computerized MLS system, pretty much every home for sale can be found online.

Newspaper / Magazine Advertisments

The local newspaper will usually have a few ads for homes. In addition, real estate magazines such as The Real Estate Book are free and can usually be found in the nearest Longs drug store, by the door of grocery stores, and in many street corners around town. One very key point to remember here is this: listing a home on the MLS costs the Seller’s Agent nothing. Placing an ad in print costs quite a bit. More often than not, if a house is not selling or generating interest, that is when money will be spent to more heavily advertise it. If the home is not selling, there is usually a reason for it. In addition, keep in mind that print ads are at least one day, and in many cases several weeks, behind. By the time you see a house advertised in a magazine, it may be gone and sold. However, print ads still serve the purpose of getting you, a curious buyer, to call the Seller’s Agent and have that agent sell you the home. If the home is no longer for sale, chances are the Seller’s Agent has another house they’ve listed that they would love to show you. Again, make your Buyer’s Agent do the research. Your Buyer’s Agent will be able to have a non-sales pitch conversation with
the Seller’s Agent that may reveal more information than you will get on your own.

“For Sale” signs in the front yard

“For Sale” signs serve the exact same purpose as print ads – get the buyer to call the Seller’s Agent. When you are driving around the neighborhood you like, make sure you have a pen and paper handy. If you see a house for sale you like, write down the FULL street address of the house and, if possible, the name and number of the Seller’s Agent. This information is how your Buyer’s Agent will do the research such as tax information and CMA’s, and investigate the situation with the Seller’s Agent.

Open Houses

Lastly, you may choose to drive around on a Sunday afternoon going to Open Houses. This is a great idea and helps you develop a sense of what is on the market. You also get the chance to walk around someone else’s house and start seeing things you like and things you don’t. There is one interesting fact of real estate here than no one seems to talk about: less than 10% of all homes for sale sell through the results of an Open House. The reasons for this truly remain unknown. However, Seller’s Agents will hold an open house for a couple of reasons. Sure, they want to showcase the house. By holding Open Houses, Seller’s Agents are doing their job of marketing the home. However, there is a chance that Seller’s Agents may suggest other listings of theirs to anyone who walks through the door. Some people may view this as a bait-and-switch, however it is simply the Seller’s Agents doing their job of selling their listings to anyone they can.

If you go into an Open House, be sure to tell the Seller’s Agent that you have a Buyer’s Agent the minute you walk in the door. You may even want to give them the name of your Buyer’s Agent. Quite often you may find that once you tell the Seller’s Agent you have a Buyer’s Agent, you will get to walk around the Open House freely and without interruption. In addition, the other purpose of telling the Seller’s Agent you have a Buyer’s Agent is professional courtesy. That Seller’s Agent has the job of selling you the house as soon as you walk in the door. Don’t waste their time.

If you truly like the house, be sure to write down the FULL street address of the house and the name of the Seller’s Agent. Call your Buyer’s Agent from your cell phone if you have to and have him/her start doing the research. You may even ask the Seller’s Agent to forward the information to your Buyer’s Agent to expedite the assessment.

WHAT ARE YOU LOOKING FOR?

When you are ready to start browsing listings and look at pictures, you need to keep in mind what you are looking for. There are many beautiful homes out there. We all love to look at nice houses and sometimes can get carried away with “what if” and “wouldn’t that be nice.”

If you haven’t already, you need to decide on your “wants and needs”. Only once you know what you’re looking for, can you find it. There are hundreds of homes for sale at any given moment and if you don’t narrow your search, you will spend countless hours becoming overwhelmed, exhausted, and frustrated.

60 MINUTES AT A TIME

Looking at pictures, waiting for pages to load, and hitting “next page” too many times will tire you out. After looking at 50 houses, you tend to forget what the first 20 looked like. The best advice you can receive here is to keep your browsing to one-hour-long sessions. If you notice yourself getting tired, bored or frustrated, take a break. It may seem like silly advice, but if you are serious about finding your new home, the last thing you want is to get frustrated with the process. Stay focused on your goals.

RULE THEM OUT OR SAVE THEM

As mentioned, there are hundreds of homes for sale at any given moment. There is no humanly way possible to research and tour them all. For this reason, your goal when browsing homes should be to rule them out as quickly as possible. Most home buyers tend to scan pictures of homes and rule them out based on looks. There is nothing wrong with this method, however you should keep a few facts in mind. First, the pictures you are looking at were taken by the Seller’s Agent. Real Estate Agents in general are not professional photographers and may not take the best pictures. Just because the picture is ugly doesn’t mean the house is ugly. Second, don’t judge a book by its cover. If a home is in a certain price range but the exterior doesn’t match other nicer homes in the same range, chances are the interior has been refinished and updated. It may be worth taking a closer look.

Keep in mind your goal: rule them out. If you can unequivocally rule a home out of your search by looking at the ad online, do it. There are many homes out there to choose from. Don’t waste your time with ones you don’t like.

Conversely, when you like a home and you think you’d want to at least get more information on it, write down it’s MLS number and/or street address and town. Your Buyer’s Agent will need this information to look up tax information, put together a CMA (Comparable Market Analysis that estimates a home’s value), and do some background investigation of the home.

STAY IN YOUR PRICE RANGE

We all love house hunting. Looking at beautiful homes can be quite enjoyable. However, this is dangerous too. When you are searching for your new home, you do not want to discourage yourself. The analogy here would be car shopping. Don’t go test driving a Ferrari if you can only afford a Honda. Honda’s are good cars, but if you fall in love with the Ferrari, you will never be truly happy with your Honda.

Stay with homes in your price range and find the ones you like. When you go to tour them, you may find you can get a nicer home than you originally thought you could.

Tune in Tomorrow for Part 2.

In order for you to obtain the highest possible selling price for your home, you must work closely with your Realtor®. The seven rules of selling listed below comprise the items that a homeowner can contribute to a successful marketing effort.

1. Be Prepared To Spend A Little Money To Sell Your Home
Many homeowners are very hesitant to invest additional money in their home at the time they are selling it. Although understandable, these feelings may rob you of a much higher selling price. Most sellers should consider an independent home inspection and survey prior to selling to identify potential selling pitfalls. Similarly, the small costs of power washing, painting, carpet and storage of “stuff” are all possible considerations that can add value.

2. Price It Right
Price your home in accordance with the current realities of your local (island wide and neighborhood) real estate market. Ask your Realtor for a competitive market analysis. Note that I consider 80% of marketing of your property as simply pricing it right the first time to sell quickly and for top dollar.

3. Cooperate With Your Realtor
Some homeowners limit the effectiveness of the Realtor by prohibiting “for sale” signs, open houses, or lock boxes. Don’t eliminate any selling tools.

4. Keep Your Home In A State Of Readiness
You may not get much advance notice that potential buyers would like to see your home. Try to keep bedrooms, bathrooms, and kitchen in “better than usual condition” so that you won’t panic when getting ready for a showing.

5. Maximize The Appeal Of Your Home During Showings
Turn the lights on even during daylight hours. Be sure that the house doesn’t have the odor of strong smelling foods. Let the Realtor conduct the tour.

6. Be Willing To Consider A Price Reduction
Sometimes, the best way to get top dollar is to reduce your asking price. The original price may have been a little too ambitious or perhaps the interest rates or the local economy have changed since the original price was set.

7. Be A Reasonable Negotiator
Some owners become very emotional at the time an offer is made on their home. Don’t let these strong feelings cloud your judgment when considering an offer. Let Your Realtor® guide you through the negotiation process.

On Oahu, after location, and lot size, two of the biggest determinants of a home’s value are its bedrooms and bathrooms.

Bedrooms and bathrooms are also the same features that buyers use when deciding which homes they want to see. A buyer for a four bedroom home will seldom consider a three bedroom house. It is also true that someone needing three bedrooms usually won’t consider four unless there is a plan for family growth. The master bedroom is a key factor in most home buying decisions. Its location, size, bathroom access and closet space are carefully considered. The master bedroom has become so important that it can make or break the sale. Certain price ranges demand particular master bedroom features. The attached full bathroom with bathing and or shower facilities is a must with many buyers. In the higher priced homes, it is not unusual to see a bathtub and separate shower. The bathtub may have a built in hot tub. Skylights are popular in many modem bathrooms. The location of bathrooms also makes a difference. A bathroom located in the garage usually does not increase a home’s value. That same bath located on the main floor could dramatically increase the demand for a certain house. Many expensive homes are expected to have a powder room adjoining the entrance foyer. Likewise, a half bath just off the entrance to the garage is customary. Two bedrooms that are connected by a bathroom can enhance the desirability of the home.

ADVICE: Because of the investment potential of buying a home, it is best to work with a Realtor®. Realtors®, know about many of the little things that affect value.

According to the Pacific Business News (http://www.bizjournals.com/pacific/), Hawaii ranked 40th in the nation last month in the number of foreclosure filings, according to new figures.

But the state saw a more than 100 percent increase in the number of foreclosure actions last month when compared to September 2006, according to the figures released Thursday by RealtyTrac.

Hawaii had 135 foreclosure actions in September, or one for every 3,638 households, according to the Irvine, Calif.-based company, which tracks foreclosures and bank-owned properties.

While it was a 114 percent increase over the same month last year, it is still far below Nevada, which had the highest rate in the nation at one foreclosure actions per 185 households.

Florida followed in second place with one foreclosure for every 248 households. California had one for every 253 households.

The national rate was one foreclosure action per 557 households, based on a total of 223,538 filings.

Broken down, Hawaii’s 135 filings included 13 notices of default, which is the first step in the process, 118 notices of trustee sale and four bank-owned properties.

States with foreclosure rates lower than Hawaii’s were Wyoming, Maine, Alabama, South Carolina, Montana, Mississippi, West Virginia, North Dakota, South Dakota and Vermont.

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