Hawaii Randy's Real Estate Opinions

While traveling on the mainland I started to see problems having problems on my laptop computer with Microsoft Word 2007^TM.  At first I had trouble opening attachments on e-mail and then It began to freeze up.

The final phase was that I could open a document, but could not edit it in any way.  After scanning my computer for virus and running all the diagnostics, I still did not have any answers.  So I uninstalled MS Office^TM and reinstalled it.  The problem was still there.

I then called my computer Guru, Gary Cheeseman (Celeste WooHoo Sally's husband).  A few minute later Gary called back and said he was e-mailing me a link to the fix.  If any of you run into this problem with Word^TM it is a registry problem created by the program and here is the fix:  http://support.microsoft.com/default.aspx?scid=kb;en-us;940791

SYMPTOMS

You install an automatic update for Microsoft Office Word 2007 on a Windows Vista-based computer. Additionally, the computer must be restarted after the automatic update is installed. However, if Word 2007 is running when you restart the computer, you may experience the following symptoms:

Hopefully this post will be helpful to a few of you.

I am 2/3s of the way to Orlando and having a great adventure.  Monday evening I flew from Honolulu, had a early morning stopover in Dallas and arrived in Springfield, MO late Tuesday morning.

My older brother Russ Prothero, a REALTOR® in Branson met me at the airport.  He had his suitcase, snacks and a case of water in his pickup truck so we hit the highway heading south.  I need to add we stopped for gasoline.  We I left Hawaii, our gas price dropped to $3.25/ gallon and we were celebrating.  It was $1.89/ gallon in Springfield. 

His GPS was set for the shortest route to Orlando.  Hmm let's see now, I have never been to this part of the country and we have an extra day or two to get there.  What to do?

I know let's go to New Orleans, I have never been there.  We can then follow the coast to Florida.  After a short 1200 mile drive we decided to stop in a motel north of New Orleans and spend the night.

After a good breakfast we drove the last stretch to New Orleans. Our plan was to get a hotel room and spend the day so we could walk down Bourbon Street in the evening.  After checking into our room, we followed up on our e-mails and checked Active Rain for messages.  I also sent New Orleans real expert Eric Bouler a contact message to let him know we were in town. 

I barely hit the send button, when my phone rang.  It was Eric.  Two hours later Eric was giving us a tour of his town.  What a truly gracious thing to do.  We did not even tell him we were coming (we didn't know either) and he was showing us around town.  He showed us the French Quarter, and a few other parts of town including the areas that were hit by the flood.  After driving us around town we got out and walked all around the French Quarter.

I truly enjoyed hearing about how he does business and gained some real good advice on improving my internet presence.  Eric has built a great niche' with upscale condos and has set himself up as a market expert for the areas he is working.

Mahalo (Thank you in Hawaiian), to Eric for his wonderful showing of hospitality.  I look forward to the day when he visits Hawaii and I can return the favor.

With all of the folks in financial trouble and the numbers of home owners upside down (owe more on their mortgage can they can sell the home for), a new industry and many new scams are popping up.

Mortgage modification, renegotiation or restructuring is the new buzz.  Franchises are being sold, seminars are being held and spams are flying around the internet.  The next wave of prosecutions is probably a year or two away, once enough of the public are taken advantage of.  I am sure there are legitimate companies out there, but the public better beware.

If you are in a desperate situation and you need to either restructure your mortgage or go into a short sale or seek some other form of relief; be very, very careful.  There are charlatans are every corner.  Beside the "We Buy Homes" scammers there are several new groups popping up including "Mortgage Modification Services."   I am sure there are some professional organizations that are good at what they do.  There are many, many more scam artists looking to take money from you.

Yesterday I attended a seminar hosted by a local escrow office.  Once it began we quickly realized it was a sales pitch for a service.  The service actually operates out of state and claims to be utilizing attorneys.  Being out of state puts them out of reach of our state regulatory agencies.  The very same problem we run into with out of state lenders.  If they do something improper, you have very little recourse.

If you are in this situation and need legal advice seek a local attorney. 

If you need Hawaii real estate advice, give me a call or an e-mail.  If I can not help you, I can point you in the right direction.  What ever you do be careful and look for the appropriate professionals.

When the market was hot, it seemed like people were crawling out of the woodwork to become real estate agents and loan officers.  They had little to no training and no experience, yet they had a license.  The market was hot, everyone was making money and it seemed like clients were willing to forgive and forget.  It was a royal pain in the neck for the rest of us who had to deal with them.

Now that the market has changed, many of them are still lingering around.  This last year, I have seen worsening behavior among many part time/ hobbyist agents.

• Phone messages and e-mails unreturned.
• Messy and incomplete contracts.  Some agents refusing to submit offers in writing (more on that).
• Not pre-approving or pre-qualifying their buyers.
• Not appearing for scheduled showings and not calling to cancel.
• Rude to other agent's and their clients. 
• Listings without photos or accurate information.
• Not following timelines.  Commonly because of one of the following reasons.
  • Don't know how to read a contract.
  • Busy with their other job.
  • Lazy or just don't care.

One of the tactics I am seeing more of is agents fishing for price.  I have gotten several calls from agents making verbal offers on my listings.  They expect the seller to accept the price, before they will consider writing an offer.  No mention of any of the other details of the offer or even if they have a qualified buyer.  The main reason for this is they are offering a ridiculously low price and they know it will most likely not be accepted.  I am sure they are making dozens of these calls.

In the last month I have had several agents no-show for appointments on my listings.  One of my listings has sellers that are an 80 year old couple.  My sellers take extreme pride in their home and go out of the way to be sure the home is ready for all showings.  Even after I tell agents to call if they are not going, and explain that my sellers are in advanced years, we still get no call.  Three no shows in the last month; two of them did not return my messages.  I have had no-shows on all of my listings.

Behaviors like this damage the public's view of our profession.  When you consider how much money is involved in these transactions, there should be no excuse or tolerance for unprofessional behavior.

Here is another blog article on a similar topic: E-Mail 101

During the hot real estate market a few years ago banks, federal government and people committing fraud caused property values to artificially jump.  Today the same banks and the same government are causing the those property values to drop all over the country.  I spoke about how lenders are causing property values to decrease by their incompetence in a previous post: Lenders Are Causing Property Values to Drop.   

Now they want us to be grateful to them for saving us with our own money (massive amounts of it).  I for one am not grateful, I am fed up.

Congress made laws requiring banks to give bad loans and then took kick backs from them (campaign donations and sweet heart loans). Those in congress knew Fannie Mae and Freddie Mac were in trouble 4 years ago and did nothing about it covered it up and protected them; so they could continue to write even more bad loans. 

Since that time members of congress continued to take money from Fannie, Freddie and the lending industry.  Executives from Fannie and Freddie left with giant bonuses after riding those institutions into the ground and cooked their books. Instead of prosecuting them, many found golden parachutes.  A few of them are now financial advisors for the presidential candidate who was the second highest collector of donations from Freddie and Fannie.  I wonder what advice he is getting.  Are they planning the next crash and burn cycle?  I definitely will not be saying thank you to congress.  I have no Aloha for them.

Lenders and government sat back while massive amounts of mortgage fraud went on around the country and did very little.  In some cases they were active participants.  Mortgage fraud caused property values to climb artificially in communities across the country.  Consumers buying homes at that time paid more.

Now the very same lenders are driving down prices in those communities.  They are causing consumers to lose money and their homes in some cases.

So again I say, NO ALOHA for Congress and the Lending Industry.

Lenders are a major cause of property values dropping in many communities.  I am not going to argue about their lending practices and the volume bad loans they issued.  I think that is a given.

The incompetent way lenders have dealt with these bad loans is causing the problem to escalate in communities across the country.  They have made it such a painful, lengthy and expensive process for buyers to purchase these properties that the lenders are forced to accept less money than they otherwise would.  Once they start that cycle in a neighborhood, property values drop, making it impossible for more struggling home owners to sell their properties, causing another wave of short sales and foreclosures.  The lenders continue to mismanage them causing the cycle to repeat.

It is bad enough that the lenders with pressure from congress gave out loans to people who could never afford them.  It is criminal that lenders are now causing innocent citizens to lose their homes because of the incompetent way they are handling the properties are under their control.

I have heard the story about how overwhelmed they are with the volume of homes involved.  All I can say is BooHoo.  Let me get out my violin.

The amount of money lenders are losing they can easily justify hiring an army of people to expedite these in a more professional way.  There are real estate agents, loan officers and other lending industry workers out of work all over the country.  The homes I was looking at in the last few days were being sold anywhere from $50,000 to $100,000 below market value.  The more they sell like that the more the prices will go down further.

The bottom line is that the better the lenders handle the sale of distressed properties, the less of them there will be in the future.  Lenders will also take smaller losses on each one.

I have watched lenders one by one drop like flies over the last few months.  I see commercials telling consumers in trouble to contact their lender, because they want to help them.  I honestly do not believe it.  Have you ever tried to contact a lender for a short sale packet or to discuss not being able to make the payments and the need for some relief?  Fortunately I have not been in that situation, but know several folks who have.  They all have a consistent story.  The lender would not take their call.

I personally have avoided doing short sales as much as possible.  Dealing with the delays and the non-sense from the lenders just does not seem like it is worth the trouble.  Buyers I work with so far have not tried to buy one. (thank goodness)

Currently I am working on a REO sale.  The bank took the home back through foreclosure and has it listed with a real estate agent.  She is a very good agent in my area that I know.  We put in an offer and got a verbal acceptance.  It has been over 3 weeks and we still do not have documents back from the seller (bank).  While waiting to get this in escrow the interest rates have gone up a little.  (Bad for the buyer.)

As time passes the buyer's excitement about this property is being replaced with doubt. If rates climb again it may be replaced with moving on. 

When we put in the offer, we were told we could get a response in as fast as 24 hours.  They must be using the metric system.  If this takes much longer, the lender will be looking for another buyer.

So if these lenders are so overwhelmed with so many properties to deal with, would it not make sense to expedite the ones they can and get them out of the way?  Wouldn't logic say that they are losing even more money by their incompetence and lack of urgency?

How many more folks out there feel the same as I do?  If I had my choice I would avoid dealing with the lender controlled sales.  With them creating that negative environment they are causing even bigger loses.  Over the last year, I have read many articles and blog posts about this problem, yet if anything the lenders have gotten worse.  I guess they simply do not care.

The Kaneohe communities (zip code of 96744 and some connecting neighborhoods) have seen changes in the real estate market. 

Single Family homes sales have softened. Average sales prices of single family homes year to date are up slightly.  In the month of September we saw a slight dip that was mostly attributed to an increase in sales volume of lower priced homes.  Sales volume saw a bump in September, but year to date is still down form the 2007 levels.  Inventory levels are high with more than a years worth of inventory.  If current conditions continue buyers will find sellers may be a little more negotiable.

Condo and townhouse prices are a little rosier.  Inventory level has climbed to over a years worth in the Kaneohe area.   Prices although year to date have seen stable, but with the inventory levels climbing we may see pricing pressure on the sellers.  Buyers should be able to find room to negotiate on many of the condos for sale in the Kaneohe area.

 Currently Active for Sale (as of 10/3/08): 

• 215 Single Family Homes
• 116 Condos/ Townhouses

Currently in Escrow (as of 10/3/08): 

•   32 Single Family Homes
•   22 Condos/ Townhouses

*These numbers were taken from the Honolulu Board of Realtors MLS system and are deemed to be accurate, but not guaranteed.

You can find out more about real estate in Hawaii at: www.HawaiiRandy.com

Or at: www.localism.com

The September 2008 numbers are in.

Single Family Home Sales saw a major dip in the median price and sales volume from August and the same period last year.  While prices had been fairly stable until September the challenges in the lending industry and tourism industry may have finally hit us in a more substantive way.

Condominium Sales had a larger drop in volume and median price.

With interest rates still holding on the low side and inventory level up a little; buyers should see it a good time to take advantage of the market conditions in most areas.

Sellers need to be more aggressive than past months if they want to be successful.

A few communities are struggling much more than others.  I will be posting individual community market reports over the next week.  If you have a particular community you are interested in, please let me know and I will try to post it first.

*These numbers were taken from the Honolulu Board of Realtors MLS system and Old Republic Title.  They are deemed to be accurate, but not guaranteed.

You can find out more about real estate in Hawaii at: www.HawaiiRandy.com

PacRim 2008 is the Hawaii Association of REALTORS® annual conference.  This year it was held at the Hilton Waikoloa Village on September 18 & 19, 2008.

This year the internet was front and center.  Social networking and blogging, including Active Rain were featured topics at this convention.

Bob Stewart the Community Evangelist from Active Rain was the speaker at one of the breakout sessions (I did not make that up. It is actually on his business card).  I was extremely honored to be asked the Hawaii Association of REALTORS® (HAR) to do the introduction.  Bob did a terrific job of introducing the HAR members to Active Rain and Localism.com.  Bob also explained how Active Rain helps you build up Google^TM juice.  There were a few Active Rain members in the class, many happy to meet Bob and learn more about how to make the most of blogging.  A few from the neighbor islands wanted to meet me and get pictures.  That is proof Active Rain can make you a celebrity.

The keynote speaker was Active Rain member Stefan Swanepoel who is the creator of the Trends Report.  He gave us a great overview of the direction the industry is heading.  It was really exciting to meet him in person and pick up a signed copy of the report.  One of the topics he covered was women's role and success in the real estate industry.

Saul Klein, real estate internet guru gave a wonderful presentation on the use of the internet for our industry.  Blogging was part of his presentation.  He spoke about Real Town Blogs and the benefits gained through social networking.

The last speaker of the conference was Doug Devitre an Active Rain member who is known for free and cheap technology tools and techniques.  I got the honor of taking a CRS class with Doug a couple of years ago in Colombia, Missouri.  This year he was a presenter at the CRS National Sell-a-bration in Waikiki.  He was a hit there.  Doug came back to teach a class for our pre-licensing instructors.  His appearance at the PacRim was his third visit to Hawaii this year.  On Thursday he did a long class for the instructors.  On Friday he wrapped up the conference with an excellent presentation of how to utilize technology in our business.  He emphasized free and cheap.  Gotta love that!

At the conference I got to meet and speak to several of the Active Rain members from the neighbor islands.  I left the list off this post, it could get long and I was afraid I might miss someone.

My next trip is to the NAR Annual Convention in Orlando, Florida in November.  I look forward to meeting up with many Active Rain members there.