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

This report covers areas including: Halawa, Foster Gardens, Aiea, Aiea Heights, Waimalu, New Town, Royal Summit, Pearl City, and Pacific Palisades.

The below figures include both fee simple and leasehold properties.  These are only the totals and average sale prices.

Single Family homes sales have softened. Average sales price of single family homes has leveled off year to date while sales volume continues to be down from last year.  With more than 6 months worth of inventory and low interest rates buyers will find the Pearl City region a good place to find the home of their dreams.

Condo and townhouse sales are another story.  Prices have stabilized while sales volume is down.  In July the volume saw an upturn.  It is too soon to tell if a pattern is forming.

Current Active for Sale (as of 8/2/08): 

•   83 Single Family Homes
• 123 Condos/ Townhouses

Currently in Escrow (as of 8/2/08): 

•   35 Single Family Homes
•   44 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

It seems like every evening they play this show called Houses for $300.

He is claiming that through the tax foreclosure process, you can purchase a home for as low as $100 under the right conditions.  Give me a break.  If he was able to that consistently he would be buying them up himself instead of telling the whole world.  He claimed that more than 2.2 million properties in Canada and the U.S. were tax foreclosed on in the last year.

Ok, so why was I watching this show?  I wanted to find out how much he was selling his system/ kit for.  It was $39.95.  He must be selling a ton of these to have so many ½ hour infomercials on TV.

I was about to write about the flaws in what they were saying.  Tax and tax foreclosure laws and rules verify from state to state and county by county, so what ever I wrote may not be accurate in all areas.

In most communities if you pay the back taxes, the owners have a period of time to bring the taxes current.  In Hawaii the chances of someone letting a property go for taxes are slim to none (more like none).  If the bank has a mortgage, they would most likely pay the taxes to protect the mortgage.  In Hawaii someone losing a home due to a tax foreclosure sale is unheard of.  If a home came up on a tax auction, just think how many folks have attended get rich quick classes or bought this system off TV?  There are probably hundreds of people ready to bid on it.  Not much chance for a $300 home is there?  Even if it the home got to auction and you won the bid at probably something closer to market value; the owner or the lender still has a reasonably long period of time to get it back, by bringing the taxes current.  The deed you would receive in Hawaii from a tax auction has little or no value.  In most cases it would be close to holding a Quit Claim Deed on the Brooklyn Bridge. 

If you attended one of the many seminars or bought a kit from TV, you do not want to hear this.  Unlike the get rich quick seminar folks or the infomercial slicksters, I am providing this at no charge and have no vested interest other than hoping to save you some time and money. 

I had one friend who paid back taxes on properties for many years.  He teamed up with an attorney.  He put up the money, the attorney did all the work and they split everything 50/50.  They paid back taxes on hundreds of properties over many years.  They were vacant parcels with no water rights in the Arizona dessert above Lake Mead.  The water rights in the area were sold off to another state for a period of years.  A few land owners would let the land go for back taxes, while most kept their land by paying him back with interest.  Many years later the area got water the rights returned and they began to sell them off, as development moved their way.  He is only person I know who has been successful chasing back taxes.  Even then he could have made much more money by buying property on the open market here in Hawaii and holding them for the same number of years.

So why did I write about that infomercial?  You may have already guessed.  I have gotten several calls in the last couple of months from folks asking me if I handle tax foreclosures.  You can guess where they got the idea from.

P.S.  Unlike those slick folks doing seminars and infomercials; if I knew about $300 houses for sale I would be buying them instead of trying to take your money.

Is that agent making their living selling real estate or is this something they do on the side?

This should be the first question you should ask an agent who is trying to get your business.  I am amazed how many folks will trust the most expensive purchase or sale in their life with someone who is doing this as a hobby.

If that person is not successful or dedicated enough to make a full time living at this, do you really want them handling your transaction?  If were a consumer, I would want the absolute best real estate agent and loan officer I could find.

Those part time agents, who are getting upset reading this, please step back and look at this from the eyes of a consumer.  I am sure you feel you are good at what you do and you have a great reason for doing this on the side.  The truth is there is no way you can do it as well as a top full time professional.  You have not made the investment of time, money, infrastructure and training as someone who does this as a career and a business.  I am not saying all full time agents are top professionals.  I am saying consumers should be looking for those who are.

In this changing market you need someone who is on the street and having success when most are crying and looking for work elsewhere.  If an agent had a fully developed business before the market changed they may have seen some slippage in volume and profit.  If they have a good business plan they will be picking up market share, while others are leaving to take jobs elsewhere.

Seeing the change in the market coming, I began investing in my business.  Improved services, increased marketing and regular education have been my formula.  That is correct, I began spending more time and resources seeing the change coming.  So far it has worked.  2008 is on track to be my best year.  I have been speaking to other top agents in the area and a few of them are also having big years.  Mos are easy to spot, they have designations after there names and they are the ones doing the most marketing of their properties and themselves.

Our industry has always been made up of many part time agents.  Since the change in the market, many full time agents have joined their ranks by taken on jobs in other areas while holding on to their license.

Here are some of the disadvantages to their clients, I am witnessing on a regular basis.

• Not available to return phone calls or show properties when needed.
• Cutting back on marketing to save money, including but not limited to:
  • Internet
  • Photos, (believe it our not)
  • News Ads
  • Open Houses
  • Virtual tours
  • Websites
  • Flyers
• Not taking regular training or attending REALTOR® meetings.
• They are not networking with the top producers in the area.
• Not keeping current with the lending industry.
• Cut corners during the transactions and blowing deadlines.

Can a part time agent do a good job for you?  Yes they can.  Can they do as good of a job as a full time profession?  It is theoretically possible, but rarely happens.

Rarely Available 3 bedroom Northbrook/ Melemanu Condo.  These units do not last long, 3 bedroom units under $300,000 are so hard to come by.  This one stands out from the crowd.  It is the closest to the pool and recreation area, has 3 lanais and 2 assigned parking stalls.

Convenient to shopping and transportation.  Schofield Barracks is just up the road.  Available for showing on short notice.

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 down slightly, mostly as a result of a dip in June.  Sales volume continues to drop with more than 12 months worth of inventory.  Buyers will find sellers that may be a little more negotiable.

Condo and townhouse sale are a little rosier.  Units for sale have climbed to 10 months worth of inventory in the Kaneohe area.   Prices although year to date have been stable, did see a dip in June from the 2007 levels.

Currently Active for Sale (as of 7/26/08): 

• 195 Single Family Homes
• 129 Condos/ Townhouses

Currently in Escrow (as of 7/26/08): 

•    36 Single Family Homes
•    15 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 June 2008 resales numbers are in.

Single Family Home Sales volume is down from the period last year, although median prices made a rebound in May they saw a dip in June.

Condominium Sales had a similar drop in volume while the median price which showed a modest increase in May saw a small dip in June.

With interest rates still holding, buyers should see it a good time to take advantage of the market conditions in most areas.

*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

I know we are all watching to see the membership meter turn over the 100,000 mark.  It looks like today is the day!  When I saw Active Rain, I said to myself this will be powerful.  I never imagined how powerful and how fast.

The folks that created this wonderful forum, made something really special.  It took real vision to create this and to keep it improving and growing.  To think only a couple of years ago this was just an idea on a napkin.

Since joining I have made many new friends, both in person and online.  Several great clients have found me by reading my blog posts.  I have learned and grown thanks to the knowledge we share here.

I just want to say THANK YOU for everyone responsible for creating this tremendous forum and for all of the members who have made it what it is.

I am looking forward to the new improvements and the many new members who will continue to come.

Good luck for the rest of 2008!

We have all seen it.  The home listed as "Excellent Condition" and the termite holding hands are the only thing holding up the roof.  What are they thinking?  No buyer who has been brought there under false pretenses will buy that home.

I showed a home last week that was owned by the listing real estate agent.  The home was listed as a 3 bedroom/ 2 bath in Excellent Condition.  It had only one bath.  Excellent, well that was a stretch, but not as bad as thinking no one would notice the missing bathroom.

I wrote an article about red flags.  REALTORS® Point Out Red Flags, They Don't Give All The Answers   It was stimulated by this listing.  You can draw your own conclusions on why it was probably not in Excellent Condition.

If your listing has 1 bath, say it in the listing.  If it is a tear down, price it correctly and let the public know.  There are buyers looking for rehabs.  Those looking for a 2 bath and in Excellent Condition aren't who you are trying to attract anyway.

Take good pictures, buyers won't even look at homes without pictures in most cases.  If it is ugly tell them.  I know several buyers who think those are steak.

The bottom line is no one likes to be lied to.  Do the right thing, attract the right buyers and gain their trust up front.  If they don't trust you, they won't buy.

As a REALTOR® my primary job is to protect my client's interest.  It is not to practice law, give tax advice our give engineering opinions.  I am licensed to sell homes; I am not a Lawyer, a CPA, a Contractor or an Engineer of any type.  I can loose my license for practicing law and giving professional advice for something other than what I am licensed to do.

This is the hardest thing for many agents to remember.  I constantly hear agents make comments like this home has settling issues or you can knock out that wall and move it there.  I cringe when I hear agents make comments like that.  I have even heard them giving tax advice or legal advice.

Last week I showed a home that appeared to have possible settling issues.  Let me repeat the important part of that sentence: possible.  I saw cracking in walls and ceilings and windows that were out of square.  I also saw deck and stair cases pulling away from the walls.  If you asked me to make a bet, I would law a few bucks down on settling.  What did I tell my clients?  There may be a possible settling issue. (I also pointed to what I was looking at).  I then stated if they wish to purchase this home they should have it inspected by the appropriate professional to determine if it is a problem and if so what the needed remedies are.

Our job is to point out red flags and point them to the appropriate type of professional to get it properly addressed, not to give advice on the problem.  If a client has a tax issue or a potential tax issue, I recommend they speak to their tax professional.  If they need legal advice, you guessed it I recommend they speak to an appropriate attorney.  The big one, if they ask if they can knock out walls or make extensions, I recommend they get in touch with a licensed contractor to determine the feasibility and costs.

I know it is tempting for agents to give legal and tax advice, especially when they think they know the answer.  After all we all want to be loved by our clients and we want to be helpful.  I can only say one thing.  Don't Do It!

If you truly want to be helpful, point out the red flags, document it and recommend they seek professional advice.

Condominiums were invented in Hawaii.  I bet you didn't know that.  The term condominium not only refers to apartments and townhouses, it can also refer to single family homes that the land was divided under the Condominium Property Regime (CPR), formerly known as Horizontal Property Regime (HPR). 

There are many properties in Hawaii that had multiple homes on them and they wanted to sell them individually.  The problem is the property may not have qualified to subdivide for one of several reasons.  Here are a few of them:

1. One shared driveway.
2. Lot is too small according to zoning to create individual lots.
3. A shared water meter or septic system for multiple homes.
4. Common area like a playground or pool.

When buying homes in Hawaii it is important to always get a full disclosure.  If the property you are purchasing falls under a CPR, the condo association will provide a series of disclosure documents.  You will be provided the declaration documents when they created the CPR, the budget, the bylaws, a reserve study, insurance summary, financial statement, minutes from the board and annual meetings and the house rules.  It is important to carefully review these documents in the specified period of time.  In most purchase contracts there is a contingency for the buyer's acceptance of these disclosures.

If you are shopping on the internet and you are looking at single family homes an easy way to spot CPRs is that the address ends with an apartment number.  That is a requirement in Hawaii.

The safest bet is to use a top professional REALTOR® who knows the neighborhood well.  They can help you navigate through the buying process and ensure you know what you are buying and what you need to look out for.

Good luck and good house hunting.