Hawaii Randy's Real Estate Opinions: Randy L. Prothero - Hawaii REALTOR® (808) 384-5645 (Century 21 Liberty Homes )

One of the best benefits given to active to military is housing.  When I speak of housing I am not talking about base housing which has been greatly improved in Hawaii the last few years.  I am speaking about VA benefits to purchase a home.

The VA loan program is an extremely attractive program for active duty soldiers and veterans.  The VA loan program offers 100% financing.  In Honolulu County (the island of Oahu) the limit for 100% financing in 2012 is: $695,750.  If the vet wants to buy a home for more than that amount most lenders require 25% down for the amount above the limit. 

Besides offering the 100% loan program, active duty soldiers also receive BAH (Basic Housing Allowance).  On Hawaii an E-1 with a dependent receives $1860/ month, while on the high end an O-7 and above receives $3423/month.  That is above and beyond their pay and cost of living allowance.  What makes this significant is that not only does an active duty soldier have a wonderful mortgage program, but the government gives them a housing allowance to make the payments.

There are a few differences between using a VA mortgage compared to using a conventional loan.

     1)      The VA provides a guarantee to the lenders.

     2)      The VA has a streamline program for refinancing loans.

     3)      VA loans are assumable.

     4)      The appraisal process is handled by the VA and an NOV (Notice of Value) is issued.

     5)      The VA restricts some of the closing costs paid by the buyer.  These are known as non-allowables.

In Hawaii we have several military bases and a large number of veterans.  In my real estate business, Active duty military and veterans account for over half of my business.  With the number of VA transactions I do, I have been able to put together support services with local venders and lenders for VA buyers.  A great example is that a few of the local lenders pay the VA non-allowables, so the buyers do not have to negotiate that from the sellers.  Other venders offer discounts to military, such as home inspections.

If you are considering buying a home in Hawaii and would like to know how using your VA benefit will impact you, please contact me anytime.  I would be honored to assist you. 

Good luck and Happy House Hunting!

Beginning January 1st, 2012 the VA Mortgage limits for 100% financing for Hawaii will be going down a little.

For Oahu County is will be: $695,750

For all other Hawaii Counties it will be: $625,500

VA Jumbo loans will be handled the same way.  Most of the Hawaii lenders require 25% down payment for anything over the limit.  For example a purchase of $795,750 on Oahu would require $25,000 down.

If you are looking to purchase a home in Hawaii and you are considering using your VA benefit, please contact me and I can walk you through the process.

Good luck and happy house hunting!

Jeff Foxworthy has, “you might be a redneck.”  I have, “you might consider another line of work.”

If you are a real estate agent or a loan officer and:

1)      You don’t put your client’s needs ahead of yours; you might consider another line of work.

2)      You don’t return phone calls on a timely basis; you might consider another line of work.

3)      You are not getting properly trained; you might consider another line of work.

4)      You don’t like people and you can’t treat everyone exactly the same; you might consider another line of work.

5)      If you are not willing to work as many hours as it takes to get the job done; you might consider another line of work.

6)      If you turn off your phone on the weekends; you might consider another line of work.

7)      If you can’t follow a timeline; you might consider another line of work.

8)      If you think a closing date is only an estimate; you might consider another line of work.

9)      If you think a deposit is the opposite of posite; you might consider another line of work.

10)   You believe a deed is something a boy scout does at least once a day; you might consider another line of work.

11)   You think a closing is when they turn the lights out at your office and lock the doors; you might consider another line of work.

12)   You order a survey and they e-mail a list of questions to your friends; you might consider another line of work.

13)    You think a carport is a truck that carries several cars; you might consider another line of work.

14)   You believe a counter offer is used to buy a counter; you might consider another line of work.

15)   You think a short sale is a fast one; you might consider another line of work.

16)   You think an addendum tells you who the speakers are at a meeting; you might consider another line of work.

17)   You think a covenant is a religious cult; you might consider another line of work.

18)   Last but not least, you think escrow is something you get in a French restaurant; you might consider another line of work.

The behavior of many loan officers and real estate agents has gotten pretty bad.  I can’t tell you how many phone and e-mail messages a week I send, that go unanswered.  My time and my client’s time seem to have little value to many.  You know they are not returning their client’s messages either in these cases.

The number of poorly written contracts and untrained agents is mind blowing.  I have crossed swords with many loan officers who do not care about the unnecessary stress they put their clients through. 

Do you want to be a homeowner?  Are you worried about timing?  After reading this article, you will better understand why it is time to buy.  Let’s look at a few factors, the amateur experts and the news media failed to tell you.

·         Prices are down.  Are they at the bottom?  There is no possible way to predict the absolute bottom in any market, but they are down and in many areas are showing signs of leveling and even climbing.  As you read down, you will see that timing the bottom; may be one of the lower priorities when deciding to become a home owner.

·         Interest rates are historically low.  This is the most important point to consider.  If mortgage interest rates climb by only 1%, mortgage payments will increase by something closer to 21%.  That was such an important point, that I need to repeat it. If the interest rates climb by only 1%, mortgage payments will increase by something closer to 21%.   While you are waiting for prices to drop by a percent or two the payments may climb 20% or more.  Even if you believe that you are in a more challenged area that prices may drop by as much as 5% or 10%; if you wait you may lose.

·         Have you heard about the renter’s penalty tax already passed by Congress?  Am I scaring you? If you are renting, you should be scared.  Did you know you are already paying it?  They are not calling it the renter’s penalty tax, but that is exactly what it is.  Our politicians are calling it a tax credit for home owners.  While you are waiting, the government is reaching in your pocket and grabbing out a big stack of bills.  They are penalizing you for renting in a huge way. The interest part of your mortgage payments (which is the majority of the payment) on your primary home is tax deductable.  That means you will not have to pay taxes on that part of your paycheck each month.  To get a better picture of what that means to you, talk to a tax professional. (Not your amateur expert friend or hairdresser).

·         If you rent, you do not control of your future.  If your landlord sells your home you may be moving.  If the landlord chooses, the rent may go up.  If you own and take out a fixed rate mortgage, you know what your payments will be for many years.  If prices go up, your mortgage payment, unlike rent will stay exactly the same.

·         When prices go up your landlord gets to keep the equity.  All profits to be gained down the road go to your landlord and not to you, if prices climb.  So of course you ask; what if prices go down?  You lose nothing.  Ok, I know you doubt me with that statement.  Let me explain.  As long as you own the home, you will not take any losses or gains based on the value of the home.  You can only lose on the value, if you sell while prices are down. If prices drop you will continue to take advantages of homeownership with the only impact being possible lower property taxes.  If you sell then and only then, is when you win or lose on the equity.  Even then, if you are relocating; you will take advantage of the lower prices on the other side.  No loss.

I hope after reading this article you have a little more clarity about why it s the right time to buy. 

Here is my last tip for potential homeowners.  Get professional help. Do not try this on your own.

1)      Get a full time professional Realtor®.  Someone who is an expert in the areas you are interested in.  Not a part time agent who does this on the side.  Someone who will protect your interests.  In most cases you will get their services for free.  Sellers normally pick up their fees.  Your Realtor® will let you know when you are looking at exceptions to that rule.

2)      Get a top loan officer from a local, funding lender.  Someone with a good reputation in your area.  Someone that will be there to walk you through the process and be there to explain any documents you sign.  Your Realtor® is a good source for a referral.  They will know loan officers in your area and can share their experiences with you.

3)      Start now!  It is time to buy!

Good Luck and Happy House Hunting!

Selling a home can be quite a stressful process for sellers.  Many homes are on the market for months and sometimes longer.  Sellers need to maintain their home in showing condition during that period.  That can be a big burden while trying to live their lives. They are paying mortgage and can’t finalize their future plans until it sells.

Homes may linger around for a couple of reasons.

A)      Failed marketing.  It may be one or more of the following.

1. Over priced
2. Now showing well
3. Not properly advertised (MLS, Internet, virtual tours, flyers, open houses, etc.)
4. Hard to show
5. Bad neighbors
6. Poor location
1. Next to a pig farm.
2. Not convenient to transportation, shopping or schools.
3. Across from the sewage plant.
4. Surrounded by industrial properties, etc.

(Items 1 through 6 - can be overcome with a lower price.) 

A)      Changing market conditions.

1.  Short sales and foreclosures in the area.
2. Bad economy (increasing unemployment in the area, etc.)
3. Prices falling
4. Surplus inventory

       (Items 1 through 4 - can be overcome with price)

In the end there are many variables you have to deal with, when selling your home.  The price is the great equalizer.  Any home in any condition can be sold in one day at the right price.  The question for sellers is, “How close to the one day price do you want to be? “

By properly marketing the home and having it better prepared (repairs and upgrades completed and the home staged), along with making it easy to show; the home will sell faster and possibly for more money.

If the home is not selling after being for sale for a long period of time, the market has rejected your home at that price.  Buyers are able to find another home at equal or above condition for a better price.  In some cases sellers hang on too long to their price because they are either convinced their home is worth more than buyers are willing to pay or because they need to hit a certain price.  In a some cases the home is not being properly marketed.

Tips for sellers:

• Get a top full time Realtor® who specializes in your area.
• Listen to your Realtors® advice for getting your home ready, pricing and marketing strategy.
• Be prepared to adjust the price after it has been on the market a period of time.
• Remember time is money.  If it is not selling, you are paying carrying costs. (Mortgage, utilities, taxes, insurance, maintenance, etc.)
• Have reasonable expectations and plan accordingly.  If the average sale time in your area is X number of days and you want to sell faster than that, you have to do something to make your home a better deal than those you are competing with.
• If on Oahu call me for a free consultation.  I would be honored to evaluate your home and present you a marketing plan for your home.

Good Luck and Happy Home Selling!

Professionalism is heavily discussed during CE classes (continuing education) I teach for real estate agents.  When the State of Hawaii issues a salesman’s license to a real estate agent, the state is not saying you are qualified to properly represent a home buyer or a home seller.  They are saying you are licensed and will be held to a set of standards.

As a professional you will honor your fiduciary duties to your client.  Those duties are:

• Loyalty
•  Obedience
•  Disclosure
•  Confidentiality
•  Reasonable Care and Diligence
•  Accounting

The one that I feel needs more focus on by new agents and their brokers is Reasonable Care and Diligence:

The standard of care you give your client is that of a competent professional.

•       You are required to prepare yourself through education and study.

•       You are not required to perform services outside the scope of your license.  In those cases you should recommend your client seek the appropriate professional.

•       Accounting, legal advice, engineering, tax advice, etc.

What I tell new agents is that there are no short cuts.

·         Learn the business!

·         Take classes.

·         Team up with experienced agent.

·         Get your broker involved in all of your dealings.

·         Do not take on anything you are not qualified to do.

·         And please refrain from inserting opinions on things outside the scope of your license.

Please remember if you are representing a client you are required to act as a professional.  Inexperience is absolutely no excuse.

This Labor Day Weekend I will be wearing one of my other hats, that of Hawaii Chess Federation president.  The Hawaii State Open Chess Championships will be held at the Ohana East Hotel in Waikiki.  The time control will be Game/ 120.  (Each player will have 2 hours on their clocks to complete of their moves.  Giving a total of 4 hours for each game.)  Pawns will be down range at 9:00am this morning.

Sat. 9/3/11

• 8:00am    Registration & Check-in
• 9:00am    Round 1
• 1:00pm    Round 2

Sun. 9/4/11

• 9:00am    Round 2
• 12:55pm  Election of HCF Board Members
• 1:00pm    Round 4

Mon. 9/5/11

• 9:00am   Round 5 (Final Round)

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Monday Afternoon the State Blitz Chess Championships G/5 will be held.  Each Player will have 5 minutes on their clock giving each game up to 10 minutes total.  Each round has 2 games.  The player will play one game with White and one game with Black.  Each player will play a total of 14 games for the 7 rounds.

Mon. 9/5/11

• 1:30pm   Registration
• 2:00pm   Round 1
• 2:30pm   Round 2
• 3:00pm   Round 3
• 3:30pm   Round 4
• 4:00pm   Round 5
• 4:30pm   Round 6
• 5:00pm   Round 7

There are signs all around, that the real estate market in my area is recovering.  Today I held an open house at an older home near the Mililani golf course and had the largest turnout I have seen in at least a couple of years.  We may have multiple offers coming in.