Archive for July, 2008

Honolulu had the lowest foreclosure rate among the top 100 metropolitan areas in the United States during the second quarter of 2008, according to a story by the Pacific Business News.

Honolulu ranked 100th out of the top 100 metropolitan areas for foreclosure filings, according to RealtyTrac’s Q2 2008 U.S. Foreclosure Market Report. Honolulu had a total of 250 foreclosures, or one filing for every 1,331, up 61 percent from the first quarter 2008 and up 63.4 percent from second quarter 2007.

Stockton, Calif., was No. 1 on the list, with 9,066 filings, a rate of one filing for every 32 households.

There were 496 foreclosure filings in Hawaii during the second quarter of 2008, according to the report from California-based RealtyTrac.

Hawaii ranked 41st for its rate of one foreclosure filing for every 1,008 households. Foreclosures were up 33.6 percent from the first quarter of 2008, and up 82 percent from the second quarter 2007, the report said.

The 7 Sins of Selling Oahu Real Estate, as best as I can describe them.

1. GLUTTONY, OR “DO WE REALLY HAVE TO MOVE?”

If you’re like most homeowners, you just can’t get enough of living in your house; so much so, in fact, that you probably don’t want to give it up even after you’ve decided to sell! Although loving your home is not exactly a vice, you shouldn’t let it prevent you from conducting your transaction objectively.

The first thing you need to do is evaluate your current situation. What is the primary motive for you to sell your house? Is this a financial or a logistical transaction? In other words, are you prepared to give up a good situation for what could potentially be an even better one? Once you’ve decided upon your selling objective, you will be better able to divorce yourself from the comfort of your home.

2. PRIDE, OR “I’M NOT FIXING THAT…NOBODY WILL EVER NOTICE ANYWAY!”

One day, it’s a dream house, and the next day it’s a nightmare: the paint gets dull and shabby, landscaping becomes overgrown, and roofs deteriorate. Oftentimes in a house, homeowners tend to overlook those minor blemishes that we intend to fix “someday”. But because of today’s competitive marketplace, homeowners cannot afford to let their pride prevent them from making an honest assessment of their property, which can typically result in ignoring conditions that are glaringly obvious to a buyer and send the property’s overall market value plummeting.

When it comes to positioning your home on the market, don’t let your personal attachment to the home ruin your chances at getting top dollar in your transaction. The most efficient way to address these issues is by focusing on problem areas common to most aging homes: roof conditions, septic & plumbing systems, water damages, paint & landscaping issues. These are typically the conditions most buyers will evaluate when they’re considering purchasing your house. Don’t give them any reason to reconsider their interest.

3. LUST, OR “ANY REALTOR® WILL DO…..LET’S JUST FINISH THIS ALREADY!”

Considering the stress involved in any real estate transaction, it’s common for sellers to choose the first REALTOR® to help them find their next home. As far as they’re concerned, they simply want to get the process over with as soon as possible; any real estate agent with a pulse will do. Unfortunately, giving in to this desire is one of the worst mistakes sellers can make.

The quality and efficiency of your home buying experience is dependent upon selecting the right real estate professional for your needs. In order to find the REALTOR® who is best for you, you may need to interview several candidates before selecting your agent. Make sure to distance yourself from the urgency of your situation. Although it’s always nicer to find someone quickly, don’t let your needs cloud your judgment. Above all else, you should stay steadfast in your desire for an agent with strong negotiating skills as well as the all-important drive to succeed!

4. ENVY, OR “HEY……OUR HOUSE ISN’T AS BIG AS THEIR HOUSE!”

Although you may be envious of those beautiful, super-sized homes you’ve seen advertised, it doesn’t make sense for you to waste precious hours searching for a home that does not fit in your price range! Before you spend one minute going to view properties, you should save time and money by pre-qualifying for a home loan. Not only will this step help you determine what kind of mortgage will best suit your needs, but it will also give you the knowledge of your buying power, which can save you time by restricting your searches.

The process is fairly straightforward: a lender will ask you basic questions concerning your financial history, run a credit report, and qualify you for a mortgage. You can even get pre-approved for a loan (I strongly recommend doing soo….), the benefits of which can be invaluable to an already-stressful process. So while you may secretly wish for a house twice as big as your income, when you get pre-approved, you won’t have to wish for peace of mind.

5. AVARICE, OR “WE COULD MAKE EVEN MORE MONEY IF….”

The seller’s process is rife with opportunity for greed to cloud even the soundest of judgments. Many sellers are so eager to turn a profit that they neglect to consider current market conditions and how those conditions influence their sales price. Being unaware of the marketplace can not only affect the marketability of the property, but also cost some uninformed sellers a significant amount of money. A less common mistake – but just as damaging – is when a seller lists a home at below-market value, effectively cheating him- or herself out of thousands of dollars.

Today’s homebuyers are much more educated than in the past. Therefore, it’s imperative that you establish a range of acceptable offers before listing to insure that you will maximize the value of the home. The house that sells today is the best one on the market in the price range. Remember, the saddest sign in real estate is “Price Reduced”, which indicates the house was not priced right in the first place; buyers, in turn, will start to ask, “If the price was wrong, what else is wrong?”

6. SADNESS, OR “IF ONLY WE HAD GOTTEN THAT INSPECTION….”

Nothing is more depressing for a seller than having the sale fall through at the last minute because of a structural or mechanical condition in the home. Because it’s usually something beyond the seller’s control, this piece of news can be difficult to handle. While it may seemingly save you money to avoid conducting an inspection, keep in mind that you may end up losing the sale altogether if these issues aren’t addressed.

That’s why you should hire a professional home inspector to look over every facet of the property and write a report assessing its condition. A well-qualified inspector can spot problems that you might not be able to see, clearly explain problems, calculate repair expenses and deliver a written report within a day or two. Most-contracts are contingent upon the outcome of several inspections such as wood-boring insects, excessive amounts of radon gas, structural soundness, and the condition of the heating, electrical, and plumbing systems. Getting an inspection up front can save you both the expense – and sadness – of a botched sale.

7. ANGER, OR “STUPID REAL ESTATE LAWS!”

Even the most even-tempered of sellers can be infuriated by the nuances of real estate law. Since the purchase contract is a legally binding document, an improperly-written contract can cause the transaction to fall through, or cost you thousands of dollars for inspections, and remedies for title defects and any other issues. If there are defects in the title, or if the property is in conflict with local restrictions, you must remedy them or risk losing the sale. You deserve to have an agent who is not only knowledgeable about the transaction, but is also willing to educate you throughout the process so you will feel more comfortable – and less angry.

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Home sales on Oahu plunged by more than 30 percent in June and are off by more than 25 percent for the first half of 2008, according to an article in the Pacific Business News.

Single-family home prices fell 9 percent in June from a year ago, the median price for the month was $625,000, still a strong number.

Only 232 single-family homes sold last month on Oahu, a drop of more than 31 percent from June 2007 when 338 homes sold, according to the figures released Tuesday by the Honolulu Board of Realtors.

Sales of single-family homes for the first six months of the year were 1,413, down 26 percent from the first half of 2007.

Condominium sales fell 35 percent last month, to 355 units sold, down from 547 in June 2007.

The figures count only existing homes, not new construction.

The total number of units sold so far this year was 2,158, a 27.5 percent drop from the first six months of 2007.

Harvey Shapiro, the board’s research economist noted that the peak of the Oahu market was in 2005, with an annual sales rate of 13,000. The low point occurred in the mid-1990s when sales fell below 4,000 units. We are currently on an annual pace for about 7000 sales.

“The residential markets could see further slowing throughout the summer, but this reduction in demand may ease toward the end of this year,” Shapiro said.

“Sales demand in the Oahu housing market has been slowing, but median prices are remaining within the same range we’ve seen since 2005,” said Dana Chandler, president of the Honolulu Board of Realtors. “The median price paid for a single-family home in June was 8.8 percent lower than a year ago, but remember that the price in June 2007, at $685,000, was the highest median ever achieved.”

An article from the Pacific Business News indicates that Hawaii’s foreclosure rate dropped to No. 45 in the nation in June, as reported in the latest report from RealtyTrac. Hawaii as No. 42 in May.

Hawaii had 134 foreclosure filings in June, down 17 percent from May and up 18 percent from June 2007. There were 162 foreclosure filings last month and 113 foreclosures in June 2007.

Hawaii had a foreclosure rate of one filing for every 3,732 households, said the latest survey by California-based real estate research firm RealtyTrac.

This week I have been focusing on topics for sellers, because I know selling your home can be an exhausting experience. Inconvenient phone calls, broker previews, endless showings, price adjustments and the possibilities of being stuck with two mortgages are real concerns. If you are not completely prepared, you could end up losing hundreds, even thousands of dollars in profit.

The difference between a smooth, profitable transaction and a break even, unhappy experience is often a fine line. In the majority of cases, it comes down to the subtle know-how of your agent. By utilizing the knowledge of a competent, qualified real estate professional you’ll ensure the quick, profitable sale of your home. This report is designed to arm you with the knowledge to avoid the 11 most common mistakes that cost sellers serious money.

1. Refusing To Make Profit Inducing Repairs:
It often costs you more money to sell ‘as is’ than to make repairs that will increase the value of your home during a slow market cycle. Often even minor improvements will yield as much as three to five times the repair cost at the time of sale. Your agent will be able to point out what repairs will significantly increase the value of your home. Seemingly small fix
up jobs can have quite an impact.

2. Not Considering Other Financing Terms:
Cash is not always the most advantageous transaction. Income level, tax benefits, and current legislation are all crucial factors when considering purchase terms. Professional real estate agents are experts in facilitating your home transaction. A good agent will lead you to the path that will give you the highest yield.

3. Provide Easy Access For Showings:
Accessibility is a major key to profitability. “Appointment only” showings are the most restrictive while a lock box is the least. However, there are certain considerations to take into account such as: your lifestyle, time frame for the desired sale and your relationship with your agent. The more accessible your home the better the odds of your finding a person willing to pay your asking price. You never know if the one that couldn’t get a viewing was the one that got away. By developing a trusting relationship with your agent, he or she will show the home with your best interests in mind.

4. Priced Too Low / Priced Too High:
One critical reason to find the right professional is to make sure the property is priced appropriately for a timely and profitable sale. If the property is priced too high, it will sit and develop the identity of a problem property. If it’s priced too low, it could cost you considerable profits. The real estate market has subtle nuances and market changes that should be re-evaluated by your agent every 21-45 days to help you maximize your return.

5. Relying Solely On Traditional Methods To Sell Your Home:
The agent who is innovative and willing to offer new strategies for attracting homebuyers will always outperform the agents who rely on traditional methods. Demand around the clock advertising exposure, innovative lead generation methods and lead accountability. These services exist and your agent should offer them to help sell your home.

6. Market Timing / Seasonal Selling:
Just as a broker who continually follows the trends of a stock, your professional real estate agent continually follows trends of your home market. They will know if the market cycle is poised to net you the most money. Disregard believing property sales are seasonal, “sells better in spring than winter.” Property is always selling.

7. Refusing To Make Cosmetic Changes:
The prospective homebuyer’s first impression is the most important. An unbelievable amount of home sales have been lost to unkempt lawns, cluttered rooms, bad stains, and unpleasant odors. These are all seemingly little things. Imagine you are the homebuyer and clean your place from top to bottom.

8. Wasting Time With An Unqualified Prospect:
Your agent’s responsibility is to screen a prospect’s qualifications before valuable time is lost. Be sure to align yourself with the right professional and eliminate negotiating with unqualified prospects.

9. Don’t Test The Market:
Never put your property up for sale unless you are serious. The right professional will find you buyers. If you are harboring indecision, you will blow the sale.

10. Believing You Are Powerless To Make A Difference:
Be part of the team! Take an active role with your agent to see what you can do to facilitate your sale. Networking with professional peers and personal friends often produced the sale of a home. It’s surprising how many homes are sold this way.

11. Believing All REALTORS®, Are The Same:
With all the intricate details and critical decisions to be made concerning your home sale, should you rely on anyone but a top producing professional? Many friends and family members have been estranged as a result of failing to meet expectations. Your home sale is a time consuming, effort related, difficult task. Maximize your profit by utilizing a seasoned professional.

My hope with this blog entry has been to educate you and help you avoid the pitfalls many home sellers go through. Good Luck and just let me know if I can be of service…….Aloha, Jon.

It is not unusual for homeowners to consider selling their home without the services of a REALTOR®. It would appear that the seller would save money by avoiding the cost of a sales commission. As logical as this sounds, the opposite is often true because REALTORS® usually have the ability to get a higher sales price than an amateur.

Here are three things to consider:

1. CREATION OF DEMAND:
A REALTOR® can create more demand for a home than an owner acting alone. This increase in demand increases the price of the supply of homes that are available to meet this demand. Demand is created by commissioned salespeople who don’t receive a paycheck unless they make a sale. So, REALTORS® are motivated to produce results. REALTORS® are always advertising to attract buyers to their listings. These advertisements provide a constant supply of buyers who are interested in buying a home in certain geographic areas. REALTORS® also belong to multiple listing services. These services swing into action when a home is listed by a member firm. Information on each home is broadcast by computer system to every other real estate agent who belongs to the service. This allows thousands of agents to show your home to potential buyers at the invitation of the listing agent.

2. PRICING EXPERTISE:
Correct pricing is best achieved by someone who is in real estate on a regular basis. The asking price must attract buyers, be competitive with similar homes, and allow for some negotiation. Many sellers lose money at the outset with improper pricing. It is best to use a professional when making the critical decision of the asking price.

3. THE POWER OF AN AGENT:
There are numerous situations in which it is better that the buyer and seller not communicate directly with each other. A seller could become intimidated by the buyer and sell the home for less than it is worth. The seller also may betray how anxious he or she is and give the buyer reason to drive a hard bargain while negotiating. An objective and experienced
REALTOR® can help protect the interests of the seller and obtain a fair market price.

How to Evaluate a Home’s True Potential

If you’re thinking about buying a home, you’ve probably developed a pretty clear mental picture of what your new home should be like. But remember that even a home that’s not in ideal condition can still have great potential.

Here are some tips to help you look beyond bad decorating, old carpet and ugly wallpaper to see a jewel in the rough:

• The floor plan is extremely important. Look at entrances and exits, where the rooms are located and how foot traffic will flow throughout the home. A good floor plan is worth a lot, especially when you consider the cost of changing it.

• Walls and floor coverings make an important first impression. Paint is relatively inexpensive, so imagine the walls in the colors you would choose. Carpets and vinyl floor coverings can be removed and replaced, hardwoods can be refinished.

• The kitchen is usually the center of any home. Paint and new appliances can make a huge difference if you don’t like what’s there now. The most important thing to consider is whether it has enough counter and cabinet space to suit your needs.

Unless you’re building your dream home, you will probably never find the perfect house. So before you make an offer, keep in mind what you can’t live without and what you can improve upon with some well-placed upgrades and improvements.

If the house is cluttered and not as clean as you would like, remember that it will look different with your belongings and a thorough, professional cleaning is always an option.

If the exterior of the home doesn’t have a great deal of curb appeal, just imagine it with a fresh coat of paint and new landscaping.

Please call or send me an email if I can help with more ideas on how to see past the surface when looking at a potential new home.

With rising fuel prices and HECO asking for a 5% increasing in the basic electric rates for the islands, many people are closely looking at how they use electricity and how they can reduce their overall costs…….Here are some nice charts from The Honolulu Adverstiser today……

energy-use-for-typical-family-of-four.gif

My electric bill was amazingly over $700 last month (first time ever over $600) for my family of four……..To say the least, we are looking for ways to reduce costs……. Aloha, Jon.

I often have clients asked me,”How long should the listing agreement be?”

Some prospective home sellers feel that they should list their home with a certain agent for a short period of time such as thirty or sixty days. They feel that this kind of agreement will be more effective in motivating the real estate agent than a longer term listing. As logical as this seems on the surface, it may achieve the opposite result. The listing agent may become quickly discouraged with the prospect of finding you a buyer in a short limited time frame. This discouragement arises because it takes a while to get all the marketing tools working on a new listing. Here are some of the things that must be accomplished:

SUBMIT TO THE MULTIPLE LISTING SERVICE:
The information about your home must be sent to the other real estate companies belonging to the local multiple listing service (MLS). Basic details can be broadcasted over the computer system that links member offices to the central MLS computer in a few days after the listing is taken.

SCHEDULE NEWSPAPER & MAGAZINE ADVERTISING:
Your home may be advertised in a display ad that also features other homes listed by your real estate firm or it may be inserted as a separate “in column” ad. Depending upon the day the listing is taken and the format of the ad to be used, it may take a while to insert the ad in the newspaper. In addition, local Oahu Magazines have rather long lead times (15 to 45 days or more depending on the timing of the listing) for actual publication, such as the HOMES & LAND MAGAZINE or The REAL ESTATE BOOK.

ADVICE:
List your home with an agent who is already obviously self-motivated and give him or her a long enough listing to get the job done properly. I would reccomend six months, if anyone is asking……Aloha, Jon.