Hawaii Randy's Real Estate Opinions: June 2007

Often underestimated by Realtors is importance of the relationships you build with other professionals.  Networking is not only something you do to get clients it is something you do to enhance what you do for your clients.

Let me give a couple examples of what I am talking about.

Example #1

During the peak of the market I submitted an offer on a single family home.  I got a call back from the seller's agent, who was broker for a large real estate firm.  She indicated they had multiple offers; a couple a little higher than ours.  They decided to go with us.  She did not know the other agents or their lenders.  She knew me and our loan officer and was confident the transaction would go smooth.  I thought, if the situation were reversed I would probably recommend my client consider taking her offer for the very same reason.

Example #2

In our town several townhouses had been on the market for a long time.  I had a client who was desperate to move his townhouse quick and could not afford to lower the price below market.  I got on the horn and notified all of my Realtor friends in the community about the unit coming available.  It was a nice unit with a convenient location.  The very first day we showed it, we had multiple offers in the first four hours.  We closed early and painless with an agent and loan officer on the other side that I know well.  My client has since sent me a few more referrals.

We all recognize this is a people business.  That does not end with clients.  It also includes the other Realtors we interact with.  Remember it takes two agents to make a contract.  You need to find Realtors just as much as you need to find clients.

The networking and relationship building does not end there.  Venders are just as important.  Without quality loan officers getting the mortgages, there are no sales.  Home inspectors, surveyors, cleaners, contractors, escrow officers and handymen and many others are all critical to your success and your ability to best serve your clients.

When you think about where to spend your time and energy, just remember to not overlook those relationships.

Royal Kunia is a planned community in Waipahu, Hawaii (makes up part of tax map key 194).

Single Family homes average prices have softened.  Sales volume of single family homes has remained consistent with 2006 levels.  Average sales prices have gone down a little.  Inventory levels are still holding between 4-5 months worth.  Buyers may find sellers a little negotiable.

Condos and townhouses:  Sales volume of condos is small, due to the limited number of condo complexes in Royal Kunia.  There is currently more than a years worth of inventory, causing prices to drop and making it a good time for buyers to find a good deal.  

Currently (June 23, 2007) under the "Active for Sale Category" there are: 

• 30 Single Family Homes
• 18  Condos/ Townhouses

Currently in (June 23) Escrow:

• 15 Single Family Homes
•   1 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: http://www.hawaiirandy.com/

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

Kapolei is a planned community known as the Second City (makes up part of tax map key 191).

Single Family homes sales have softened.  Average sales prices of single family homes have continued to seen some decreases.  While sales volume was down early in the year, we have seen an increase in May.  Inventory levels are also beginning to drop.  If this trend continues we may see prices begin to climb again.

Condo and townhouse sales are another story.  Inventory has gone down since early in the year.  Sales activity has remained consistent with 2006 levels, while average sales price is down a little.  With reduced inventory and consistent demand prices may begin to climb a little if conditions continue.

Currently (June 29, 2007) under the "Active for Sale Category" there are: 

• 38 Single Family Homes
• 11 Condos/ Townhouses

Currently in Escrow:

• 20 Single Family Homes
•  6 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: http://www.hawaiirandy.com/

Or at: www.localism.com

I have seen several of these listings in the past and it gets under my skin.  A townhouse listed as a single family home.  What is the agent thinking?

If a buyer is looking for a townhouse he may never see it.  When it all said and done it will negatively affect the sales numbers for the area.  The average sales price for the neighborhood will be lowered.  The number of town home sales will be reduced.

In the last two years I have reported several of these to our MLS system to only see the practice continue.

If you are the seller of a townhouse and you are not getting showings or offers, how would you feel to find your agent listing your property under the wrong category?

While writing this post I went on to the MLS and caught another such listing.  It is a 1-bedroom condo 461 sq/ft living space, 0 sq/ft land, listed as a single family home.  It is more than $200,000 less than the lowest priced single family in the town.  Of course there were no pictures, not even a camera phone shot.  If I were the seller I would be furious.

The discussion on designations came up on a few of my blog posts on professionalism.  My last post: MY GRI Designation talked about my experience in getting the GRI designation.  The post will focus on what I consider an extremely important designation and the one I that is the most meaningful to me the CRS designation.

My experience in getting the CRS designation was positive experience.  I learned a lot, met many top agents, made friends and now belong to an organization that continues to help me in my career.

I selected the CRS (Certified Residential Specialist) designation as a goal for a few of reasons:

1. It is the most respected designation in our industry
2. I was told it had the best classes
3. The organization is referral based
4. Most of the top agents in my community that I respect have the CRS Designation
5. The average agent with a CRS designation earns about 4 times the industry average.
6. Only about 4% of all agents have a CRS making it somewhat special.

The CRS designation requires not only taking a series of two day classes, but having transactional experience.

The first 2-day class I took was on real estate investment.  The instructor was Tina Daniels from Arkansas.  The class was excellent!  I learned so much.  There was a CPA and a lawyer in my group from other states.  They learned also indicated that some of the material was new to them also.  At that point I was hooked on CRS.

My next class was in Maui.  The instructor was Ed Hatch, he taught a class on building a referral based business and also covered how to build your business beyond what you can handle yourself.  He put together a business plan on hiring and working with assistants. He has been my inspiration.  I bought his CDs on several other topics and am now in the process of hiring my first assistant and building a team.

Since Ed's class I have taken several others.  The last two day course I took was in Columbia Missouri.  You read that right.  I flew from Hawaii the Branson and drove up with my brother Russ Prothero who attended a great class with me.  That was the last one I needed to earn my designation.

Now that I have gotten my designation, most would think I would move on; not true.  I have taken several other classes since.  I also attended our local Sell-a-bration and the National CRS Sell-a-bration in Las Vegas.  The only complaint I have heard came from a couple of new agents in Las Vegas that felt the classes were a little too advanced for them.

Next year our Hawaii Chapter will be hosting the 2008 CRS Sell-a-bration at the Hilton Hawaiian Village in Waikiki.  I am planning an Active Rain gathering during the same time as the event do to the large number of Active Rain members who will be in town.

Without question the CRS classes and designation is something that has helped my business.  I highly recommend joining the CRS Council, especially to all agents who are planning to make a full time career out of selling real estate.

Before closing I want to mention one more benefit of the CRS designation besides the wonderful training is the referral network.  CRS has a directory of agents across the country, which has their CRS designation.  When looking for an agent in another state I start with the directory.

I will be going after my ABR and e-PRO later this month.  I will write a similar report on each of them as I go through the process.

On several of my past posts on professional behavior I brought up designations.  A majority of responses agreed in the wisdom of getting them.  There were also more than a couple of folks, some brand new and some seasoned veterans who disagreed with the need to get them.

I thought I would write about my personal experience with the two designations I have starting with the lesser one the GRI (Graduate Realtor Institute).  Later this month I will right about the two I am working on.

When I get back into the business I made as part of my business plan that a percentage of my budget of time and money would go towards professional development.  I decided almost immediately that in my first three years I would have a goal of getting the GRI designation, the CRS designation and as close to my third anniversary as possible my broker's license.  I made a goal of getting my license to teach pre-licensing and continuing education at some future time and felt it important to get all the training and credentials I could.

Back to the GRI designation. 

I selected this designation first for a few of reasons:

1. Once you earn it you do not have to join an organization pay any annual fees and it is for life.
2. It gives you a broad range of basics in real estate.
3. It had no requirements of time in the business or number of transactions to start.

It would take a minimum of a year to complete, so I wanted to start on it as soon as possible.

The first class or two were OK at best.  By the 3^rd and 4^th I came to realize this was going to be an endurance test.  One class was so bad, that about 50 of the 100 students did not return from lunch.  I and several others that stuck it out complained to the Association of Realtors, that this was not a good use of our time and money.

To their credit the quality of the classes seemed to improve. (a monitor from the Association of Realtors took attendance to be sure no one bailed out) A few of the classes them were quite excellent.  Two of the classes were taught by the attorney from the Board of Realtors.  He was really good at teaching us about the most common things that get agents in trouble ad how to avoid them.  Even if someone is not trying for their GRI, I recommend they take those classes.

One of my favorites was a class taught by a major commercial broker who taught real estate investment.  The timing for me was perfect the week before I took a similar CRS class with an instructor from Arkansas and this one allowed me to analyze local properties utilizing the skills taught in both classes. 

Another class that I thought was both educational and entertaining was the class on property management.  The instructor is an extremely well known property manager who owns either the largest or one of the largest property management companies in the state.  In the end he reinforced my original decision to sell them and not manage them. About 20 years ago I did some property management and still remember some of the hassles with bad tenants.  I don't miss it.

I almost forgot the class on new construction.  The instructor was in the development business for many years with a major developer.  He was able to give us a perspective from their side of the fence.

So today I have my GRI designation.  If you were to ask me should you get it this is what my response would be.  If you are new to real estate I would say absolutely yes.  Even though some of the classes were too basic for me, for most new agents they would be helpful.  It also gives you a well rounded view of the business and gives much needed skills.  If you have been in the business a long time, you may look at other designations and training.  GRI at least the classes I took were probably a little too basic.  I would still recommend a couple of the classes, especially the ones taught by attorneys, if that is who is teaching in your area.

Also see my post: My CRS Designation It is about my experience with the CRS designation. 

In the July I will be working on my ABR and e-PRO.  I will write about my experiences with those courses at that time.

In a few recent blog posts I have gotten a few responses challenging my ideas about professionalism.

Those who challenged my opinions in most cases are those who do not practice what I preach.  I personally try to follow all of the items on the below list and firmly believe that even though this may not be a complete list, but it is a good list of what makes up a pattern of professional behavior.

This is a list of some of things I feel make up a pattern of professional behavior for a real estate agent:

1. Become a member of the Board of Realtors and the NAR.
2. Obey and embrace the Code of Ethics
3. Get all the training and professional development possible.
4. Work towards getting designations.
5. Work towards getting higher licenses, like a broker's license or instructors license. (Optional for those looking to do more than sell with their career)
6. Work as a full time agent. (This is not a hobby)
7. Communicate with your clients on a regular basis.
8. Place your clients need's ahead of your own.
9. Keep good records.
10. Provide a top level of service at all times.
11. Consistently strive to improve what you do.
12. Be accessible through phone and e-mail and return messages timely.
13. Properly market all listings.
14. Know your inventory and markets.
15. Build relationships with other agents in your community.
16. Give back to the community you work in.
17. Master what you do and do not try things you are not proficient in.
18. Avoid conflicts of interest whenever possible.
19. Write clean contracts.
20. Have a good business plan
21. Be prepared to work hard and work smart.

These are the few that came to me off the top of my head and are in no particular order.  Please feel free to add more to this list.

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I apologize to all who are following this blog post for the poor behavior of another member.  I deleted all of his posts this morning for the following reasons.

1. He started by making a snide remark then followed if up with a long message that was filled with insults to both me and all agents with in my franchise.
2. I deleted the insulting post. To have him come back later calling me a liar and and continuing his snide remarks and insults to other members.
3. The blog is about professional behavior. Apparently this member is incapable of that or even just being civil.

If someone feels the need to behave that way, they should do it on their own blog post and let the public read that stuff with their name on top of it, not with mine on it.  Again I apologize to the members who have been following this blog and I completely understand if you wish to delete are edit your comments in regards to the negative remarks that he left.  I also apologize if you had a legitimate comment that got accidentally deleted.

Royal Kunia is a planned community in Waipahu, Hawaii (makes up part of tax map key 194).

Single Family homes average prices have softened.  The good news for sellers is the inventory has come down a some since earlier in the year.  Will that translate in prices rebounding back?  I think it is too soon to tell.  Buyers may find the market becoming a little more balanced over the buyers market in early 2007.

Condos and townhouses:  There is currently a little over 6 months worth of inventory and prices have slipped a little over last last year.  Buyers may find sellers a little more negotiable over earlier in the year.  

Currently (June 23, 2007) under the "Active for Sale Category" there are: 

• 31 Single Family Homes
•   3 Condos/ Townhouses

Currently in (June 23) Escrow:

• 13 Single Family Homes
•   1 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: http://www.hawaiirandy.com/

Or at: www.localism.com

This Westloch sales report covers both Westloch Estates and Westloch Fairway (part of zip code of 96706) have seen the real estate market slow a little. Both volume and prices year to date have dropped a little from the 2006 figures.  The averages sales prices in May did see a slight increase over 2006.

Interest rates are still low and there is a good selection of inventory making it a good market for buyers.

Currently under the "Active for Sale Category" there are: 

• 24 Single Family Homes as of 6/23/07

Currently in Escrow:

•  6 Single Family Homes as of 6/23/07

*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: www.localism.com

Let me start by saying that I know there are many good loan officers and lenders in other states who may be able to do a quality job on a mortgage.  Unfortunately I have not seen a single loan generated through an out of state loan officer go smoothly.

That is a terrible batting average.  The story gets worse.  In a previous blog post The Lending Industry Needs to Step Up to the Plate I stated that a major problem in the lending industry is there is no easy recourse for a buyer who is treated unfairly by a lender.  For out of state lenders it is even harder.

This Wednesday we had as our main speaker for our regional Realtors meeting a representative for Regulated Industries Complaint Office (RICO) from the department of Commerce and Consumer Affairs for the State of Hawaii.  She made a presentation on the most common complaints against real estate agents and how to avoid them.  That will be another interesting post.  But the important part was the Q&A session at the end of her presentation.

One of the top agents in our area asked the big question. What is the procedure for filing a complaint against an out of state loan officer who violates the law or creates harm to one of our clients?  Her response was that they have no authority and do not regulate out of state loan officers or lenders.  They can only regulate loan officers who have a Hawaii license.  Did you hear that?  A loan officer does business over the phone or the internet, makes a big mess and we have no recourse short of taking it to the Federal level. Now she did say we can file a complaint with them or the Better Business Bureau, so if anyone checks on them in the future they will be made aware there have been complaints, but that is the end of their authority.  In other words you can yell, but nobody can respond.

If in Hawaii and thinking of financing the purchase of your home, get references.  There are many terrific local loan officers and lenders who can do a great job for you.  There are also many others who may fall in another category.  They also fall under local licensing laws and you have some recourse through the State of Hawaii if they do you harm.

Ask your Realtor for the names a few loan officers they have had good experiences.

Good luck and happy house hunting.