Hawaii Randy's Real Estate Opinions: May 2007

The Mililani High School Football Trojans, Coach Darnell Arceneaux, his staff and team parents are putting on a football camp for the community.

The event will be held on June 2, 2007.  The passing and agility clinic will help teach area youth some of the skills required to play the game of football.  Youngsters up to the age of 12 years old can participate for free.  Those 13 and older will pay $1.  The clinic starts at 3pm. 

The clinic will be followed by the Brown and Gold scrimmage game where the 2007 Trojan Football players take the field.  Admission to the game is $1.  The game starts at 6pm in Mililani HS stadium.

The concession stand will be open for both events.  You can purchase refreshments and  team T'shirts.

Mililani Links:

• Mililani Town Association: http://www.mililanitown.org/
• Mililani Drug Free: http://www.Mililanidrugfree.org/
• Mililani Chess Club: http://www.mililanichess.org/
• Mililani Real Estate: http://hawaiirandy.com/

Mililani Blog Posts:

• Welcome to Mililani - Part 1 the Shopping Centers
• Welcome to Mililani - Part 2 the Planned Community
• Welcome to Mililani - Part 3 the Surrounding Communities
• Mililani is Pet Friendly 
• Mililani, Hawaii Directory of Schools
•   
• 12 Great Reasons to Buy a Home in Mililani, Hawaii
• Mililani - Q1 2007 Real Estate Sales Activity of Existing Homes
• Real Estate Sales In Mililani Seems to be Picking Up
• Real Estate Sales Activity in Mililani
• Mililani Townhouse Sales are on Fire!
• Mililani, Hawaii - A changing market, many opportunities
•   
• Mililani Chess Kids are Still Flashing Their Stuff
• Mililani Middle School Brings Home State Chess Title
• Mililani High School Cheerleaders Take Their First State Title
• A Sunny Day of Chess and Real Estate in Hawaii
• Mililani HS Wins OIA Softball Title
• Are You Involved in Your Community? If Not, Get to It.

This Mililani sales report covers zip code 96789 which covers both the Mililani Area (which includes Mililani Town, Launani Valley) and Mililani Mauka.

The Mililani real estate market has flattened, but it is still moving strong.  We are still seeing good real estate activity in the Mililani area.  With low interest rates and a little more inventory, buyers are still able to buy the home of their dreams.

*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: http://www.hawaiirandy.com/

Or at: http://www.localism.com/

The company put out a press release this week announcing that they are continuing to undergo a rigorous U.S. Coastguard certification and inspection process of our new ship named the Alakai (Pictured above undergoing sea trials).  To complete that process before transporting the first ship to Hawaii they have delayed the start of service until the end of summer. Once the trials are complete the Alakai will leave Mobile Alabama and sail to the warm waters of Hawaii to her home port.

The Hawaii SuperFerry will begin taking reservations by early summer.  Once the company becomes fully operational they will have an estimated 200 employees and provide service to Oahu, Maui and Kauai.

The ship named the Alakai will make the trip from Oahu to Kauai and Oahu to Maui in an estimated 4 hours.

Links about the HawaiiSuper Ferry: 

• Press Release about start of service: http://www.hawaiisuperferry.com/images/gallery/HSF_DeparturePrepsRelease.pdf
• Photos of the Alakai on sea trials:  http://www.hawaiisuperferry.com/main/welcome/photos/default.aspx
• Hawaii Superferry website: http://www.hawaiisuperferry.com/
• Hawaii Super Ferry is Getting Closer
• Hawaii Super Ferry is Getting Closer to Reality
• The Good, the Bad and the Angry

I just posted a blog post:  Present All Offers Immediately

Many agents do not seem to get the importance of this.  It is required by law here in Hawaii.

In the previous post I wrote about what happened when I bought the home we live in.  Since re-entering the industry I have had several agents not show offers to their clients that I presented for buyers.

I am currently representing a seller and am seeing it from the other side.  I had a buyer's agent; also broker present an offer on one of my listings.  I received the offer early last week.  It was signed a days before and was expired by two days by the time they transmitted it to us.  I got a call from his assistant letting me know it was coming.  I never heard from the actual agent.

The assistant indicated that their buyer's loved the home and wanted it real bad.  Two problems with the offer:

• It was expired and not executable
• It was not complete:
•             Missing signatures
•             Missing addendums
•             No loan letter
•             No earnest money check

I let the assistant know about the deficiencies in the paperwork and also said the offer was extremely weak.  By just reading the offer I would have never guessed their client was serious.  She asked that I please recommend to my client to not reject but to counter.

I met with my client and we did come back with a counter offer.  We cleaned up all the deficiencies in the original offer, raised the price to something more reasonable and gave them two days to accept it.

I got a call from the agent's assistant on Friday.  The counter was about to expire.  She said her broker was meeting with the buyers and their response may be a bit late getting back to us.

That was three days ago.  I spoke to the assistant yesterday and let her know we still have seen no sign of their response and I have not heard from the agent.  She then told me that he called me and I spoke to him.  I have never spoken to him, only his assistant.  She did not know the status of the offer ad gave me his cell number.  I left him a voice message yesterday and yet to hear from him.

If his clients signed a contract on Friday it is probably already expired.  What is going on here?  Is this agent just not following up or is he trying to steer his client away from this property?  Either way he is breaking the law.  In Hawaii you are required to present all offers immediately.

For those of us who consider themselves professionals, this is quite a problem.  I am trying to best represent my client, yet agents on the other side can put the sale of their home at risk because of poor service or worse.

UPDATE:  I just received the counter offer at 9:42 am today Tuesday May 29th.  The counter offer had an expiration of May 28th at 5:00pm.  Kind of hard to get a contract executed under those terms.

I am not sure why some agents do not get this.  You must submit all offers immediately!

HAWAII ADMINISTRATIVE RULES - TITLE 16 /  DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS  - CHAPTER 99  /  REAL ESTATE BROKERS AND SALESPERSONS

• 16-99-3(j)  A licensee shall transmit immediately all written offers in any real estate transaction as defined in section 16-99-3.1 to the listing broker who has a written unexpired exclusive listing contract covering the property.  Each written offer, upon receipt by the listing broker, shall be transmitted to the seller immediately. In the event that more than one formal written offer on a specific property is made before the owner has accepted an offer, any other formal written offer presented to the broker, whether by a prospective purchaser or another broker, shall be immediately transmitted to the owner for decision. If an offer or counter offer is rejected, the rejection shall be noted on the offer or counter offer, or in the event of seller's or buyer's neglect or refusal to do so, the broker for the rejecting party shall note the rejection on the offer or counter offer and a copy shall be returned immediately to the originator of the offer or counter offer.

Why do I mention this?  The subject seems to be coming up more and more.

This issue actually was a cause of me entering back in the real estate industry a few years ago.  While purchasing the home I currently live in I submitted an offer and got a verbal rejection from the seller's Realtor, nothing in writing.  A couple of weeks later we submitted a full price offer on the property to not get so much as a return phone call back to my Realtor.  After a week of no response I took matters in my own hands.  Not being a Realtor at the time, I looked up the owner in the tax records and contracted them directly.  I found out that they were totally unaware of my two offers.  In the end I did buy the home. 

The escrow was messy.  Their agent, the Principal Broker of her company was a nightmare.  My loan officer, a personal friend was not much better.

After several delays caused by the seller's agent, my wife and I finally sat at the signing table.  There was no loan officer and no Realtor present.  The escrow documents were riddled with mistakes.  Fortunately for us, I was a Realtor many years before and understood what we were signing.  I am sure the escrow officer is still telling stories about that signing.  I pulled out my red pen and marked up almost every page for corrections.  It was so bad, that we had to come back the next day and try again.  Again came out the red pen.  This time they were able to make the last few corrections while we waiting.

Just a few of the mistakes on our documents:

• Listed us as the seller's instead of the buyers
• Misspelled our names
• Wrong address and tax map key on the property
• Wrong sale price
• Missing charges
• Seller charges charged to buyer
• Missing closing credit from seller to buyer

After the sale was over, I told myself a few things:

• The professionals seemed to be making a lot of money and not earning it.
• I would never allow a client to go through what we went through.
• It just doesn't need to be this hard to buy a home.
• The industry seems to have room for good agents and good service.

After many years in sales and marketing, being older, wiser and more established in my community, I decided that I re-enter the industry and make real estate my career.  Since getting my license, I have had no second thoughts.  My goal is to raise the level of service higher than what is considered normal or full service.  I strive daily to be sure that no client I ever work with will be able to tell stories like this one.

Also see my follow-up blog post: Present All Offers Immediately - Part 2

Beginning in June we will be seeing a new contract for the purchase of homes in Hawaii.  Our contract was called the DROA (Deposit, Receipt, Offer and Acceptance). 

It has been called a DROA for as long as any of us have been around.  When I first moved to Hawaii it was a single page that was two sided.  The front was the contract and the back was all the fine type.  Today the DROA is 12 pages long plus addendums.

What will be different about the new purchase contract?  I can sum it up in two words: THE NAME.

It was felt by many that the name DROA was confusing to clients, and those from other states and countries.  The traditionalist will have a hard time.  Many will probably still want to refer to it as the DROA for awhile.

Along with the name change the new contract will incorporate a few house keeping changes.

C-20 & C-21 the sections on remedies will be replaced by:

• C-28  Termination Due to Default
• C-29  Termination Due to Contingencies
• C-30  Termination Due to other Circumstances

These new sections better identify the ways and reasons for cancelling the contract when the other side does not perform.

Another major change is that under C-7 a buyer's failure to meet financing obligations is no longer grounds for an automatic extension. Buyer can no longer rely on funding delays as a reason to extend.

There were several other housekeeping changes to update the language to conform to already accepted practices.

• For example adding in language to include electronic (digital or fax) not just fax for transmitting documents.
• Under condo docs, a check box was added for planned community.
• A new dual agency consent was added, which will be followed by a new standard dual agency form.

The good news is the Purchase Contract will remain at 12 pages long.  It looks just like the old DROA and other than a few needed improvements will have a small learning curve for Realtors.

Have you ever wondered if your client really wants to sell their home?  Does you client make unreal demands on the marketing of their home?

• Showings only at extremely limited times.
• The home is always messy.
• Not respond on a timely basis to anything.
• No open houses.

There is also the one who thinks their home is worth a lot more than anything else in the neighborhood.  I had one potential client explain to me that her home was worth $125,000 more than the remodeled home I was selling down the street.  Here reason was she had the original kitchen and appliances.  The home was 45 years old.  I decided not to work with her.  She went one to list with three other agents one after the other who overpriced the home.  No showings, no sale.

Did those agents do her a favor by taking the listing? 

Did they do themselves a favor? 

What did that do for their reputations? 

When interviewing a potential client, you need to determine among other things:

• How motivated is my seller?
• Do they have realistic expectations?
• DO THEY REALLY WANT TO SELL?

Do you remember when to communicate with clients; you visited them or picked up the phone?  Business was done in a much more personal way back then.  Letters and notes were commonly hand written and if it was official we may have type written it.  Back then clients were loyal and your friend.

One day a new invention changed the way we do business.  The fax machine allowed us to communicate faster without leaving our office.  The ability to send copies of documents streamlined the process and saved time.  After the fax was around for awhile I would think to myself.  How did I ever get along without it?

About the same time as getting my first fax machine the personal computer hit the scene.  I was soon able to print out quotes and letters.  I found the computer to be a wonderful addition to business.  No more handwritten notes or cards.  I could print out letters or price lists and fax them to a client.  Wasn't technology so wonderful?  How did we ever do business before computers?

I did notice that clients seemed to be less loyal and shopping around more than in the past.  Customers are changing; what is wrong with people?

After a few more years the next big innovation came; the internet.  At first it was a novelty.  It became a place to sit and waste time in chat rooms and bulletin boards.  Soon we got e-mail.  How cool, we can do most of a transaction without leaving our desk.  My clients can shop on the internet and e-mail me if they find a home they like.  I did notice that more of the clients were slipping away.  Hmmm... no loyalty, what is wrong with people?

Is this how you feel?  Well let me suggest that the customers aren't changing, the way agents do business is.  How much loyalty have you earned if you sit behind a computer screen and e-mail everything to your clients without any personal contact?

You need to earn clients loyalty.  Let's start by picking up the phone a little more often.  Hand writing notes and thank you cards.  Hand delivering documents once in awhile.  When you meet a client for the first time; think about ways to create personal follow-ups.

The next time you think to yourself: how we ever got along without the internet?  The answer is quite well and in some ways much better.                               

This is a question that many gloss over when buying a house.  Too many times while in the course of buying a house for a primary residence the focus is on the price, the amenities and possible appreciation in value.  The decision is done through the eyes of an investor.

The problem with that is that many times it leaves out the most important question.  What Makes a House a Home?  Don't forget this is the place you will be living in.  You are not buying an investment you are buying lifestyle, you are buying your home.

Your children will be raised here.  A piece of everyone in your family will be part of this house. The sweat it took to make this place special and all of the memories and love that was shared here will help to create more than a bunch of sticks nailed together.  It will build a home.

Realtors can not sell you a home.  We can only sell you a house or a property.  A home is something special that you create from a house.  A home is a place that everyone in it feels loved and special.  A home is a sanctuary where no matter what kind of day you had you can retreat to your home and everything is all better.

If I could sell homes instead of houses, I would truly have the greatest job on earth.  I have to settle for the second greatest job.  I sell houses that become homes.

The Hawaiian word "Hale" means house, the word "Ohana" means family.

Here in our wonderful planned community of Mililani, Hawaii we have something really special.  Most everyone has a huge extended family.  The people of our community are so close and friendly.  Our families are so intertwined.  We know each other through church, our children's activities and the many community groups that we are involved with.

Our community is so special that we have created a town that is the closest thing to a home.

So if you are looking to have me sell you a home in Mililani, I regret to tell you I can only sell you a house in a very special place.  You and your Ohana will have to make it a home.

Mililani Links:

• Mililani Town Association: http://www.mililanitown.org/
• Mililani Drug Free: http://www.Mililanidrugfree.org/
• Mililani Chess Club: http://www.mililanichess.org/
• Mililani Real Estate: http://hawaiirandy.com/  

Mililani Blog Posts:

• Welcome to Mililani - Part 1 the Shopping Centers
• Welcome to Mililani - Part 2 the Planned Community
• Welcome to Mililani - Part 3 the Surrounding Communities
• Mililani is Pet Friendly 
• Mililani, Hawaii Directory of Schools
•   
• 12 Great Reasons to Buy a Home in Mililani, Hawaii
• Mililani - Q1 2007 Real Estate Sales Activity of Existing Homes
• Real Estate Sales In Mililani Seems to be Picking Up
• Real Estate Sales Activity in Mililani
• Mililani Townhouse Sales are on Fire!
• Mililani, Hawaii - A changing market, many opportunities
• Mililani Chess Kids are Still Flashing Their Stuff
• Mililani Middle School Brings Home State Chess Title
• Mililani High School Cheerleaders Take Their First State Title
• A Sunny Day of Chess and Real Estate in Hawaii
• Mililani HS Wins OIA Softball Title
• Are You Involved in Your Community? If Not, Get to It.

A list of other Realtors Blog Posts on this topic:  What Makes a House a Home

This is becoming a standard practice among many agents and buyers.  I have been seeing more and more of this practice.  Some think it is a panacea, is it really?

Let me describe what I am talking about.

The buyer offers more than asking price for the home and requests the seller give them a credit of up to $15,000 in credit. 

I have heard of much higher amounts from others in our business.  I have read here in the blogs that in some parts of the country their have been mortgage scams where they over inflate the sales price by a large sum and with the help of an appraiser and a loan officer get a huge credit back to the buyer.  That is fraud and highly illegal.  I am not talking about that.  I have not even seen or heard of it in the course of doing business. 

There are some pluses and minuses.  

On the plus side:

• The buyers can purchase with less cash
•             To utilize their money for moving, etc.
•             It may allow them to close on a home they wouldn't have been able to.
•             May allow them to qualify for a more attractive loan

On the minus side:

• The purchase price is being inflated.
•             The chances of the home appraising, gets much tougher
•             The buyer enters the home with equity burned up
•             The monthly mortgage payments will be increased
•             Some loans will not allow large credits
•             The chances of falling out of escrow are increased (making the offers much weaker to the seller).

I have seen a few offers that to me are pie in the sky at best.  Let's start with a premise.  I do not under price my listings.  There are not thousands of dollars laying around.  Secondly if the buyer makes a fair price offer and then wants a large credit back; you need to ask the question:  Why do you feel entitled to the seller's equity?

I have read and heard the phrase the greedy sellers.  Buyers and agents like to use this phrase for those sellers who are not willing to accept offers structured the way the buyers and their agent wants it.

The seller is entitled to exactly what someone is willing to pay for their home.  To want the most money possible for your home is natural. Why wouldn't they consider the buyer greedy if they want to collect some of the seller's earned equity?

There are sellers who do not price their home correctly.  Many of them believe their home is worth more than all others in the neighborhood.  They believe they own a palace.  Is this greedy? I am not so sure I would call it that.  It may be a little naive.  Sometimes it is because their agents inflate the value of their home: Overpricing is a Terrible Practice by Some Agents to Steal Listings?

I know everyone in our business deals with this on an almost daily basis.  What are you thoughts and experiences in this area?  Our market in Hawaii is still strong, so I am sure that those in other parts of the country are dealing with this on a much bigger scale.