Hawaii Randy's Real Estate Opinions: July 2007

Laurie Manny has kept us updated from the start line.

I apologize for not getting an update from the finish line of the 44th Transpacific Race posted sooner.  I have been extremely busy this week with work and ABR classes the last few days.  Here are some pictures from the Ala Wai Boat Harbor where the finishers are gathering.  There is a party atmosphere at the yacht clubs.  I will be posting later with the final results and some more pictures.

This is becoming a big problem in my market as I am sure it is in all markets. 

Here is a common scenario:

You receive an offer on one of your listings and it has an attached loan approval letter.  The loan is for 100% financing, the contract is messy, not complete and may have a unusual request or two.  You have never heard of the REALTOR® , their company and more importantly the loan officer or their company.

• The loan approval letter came from Bob's Mortgage and Hair Cutting Emporium.
• It is unsigned
• It is in Microsoft Word format, meaning there is a good chance the real estate agent typed in the buyers name and numbers and sent it to you. (yes I have received more than a couple of them).
• The terms of the loan are something that your best lender can not even provide.

RED FLAG TIME!

So what do you do next? 

• I first call the loan officer and find out who is Bob?
• I ask the loan officer, how fast can you provide us a loan approval letter from the funding lender?
• I present the offer to my client right away and report what I learned about the loan letter.

Even after doing all that I have had two escrows recently fall out of escrow late in the process, because the buyers were not credit worthy.

The lending side of the business seems to be getting worse as the market cools and some of the hard money is drying up.  There are so many desperate loan officers and real estate agents running around that will say or do anything to get the contract in escrow and then try to make it work later.  The sad part is after they have cost you and you client lost time, which means money they walk away as though nothing happened to go do it again to another seller.

A few agents in my area put in their listings that they require a loan approval letter from the funding lender.  You can see why they are getting strict.

When working with buyers, I ask all of my clients to work with a funding lender whenever possible and to get a full pre-approval with documents.  That will do two things for them.

1. Their loan letter will be so much stronger to the seller, possibly making them more negotiable if they know they are dealing with a solid buyer.
2. It will take away stress for the buyer.  When we get in escrow, their loan process has already been jump started, shortening the timeline to complete the loan.

• Is the Letter From the Lender any Good?
• Why I do Not Recommend Out of State Lenders
• A New Loan Officer, You Should Be Scared
• Credit Back From Sellers, is it a Panacea?

It is official; the Honolulu Board of REALTORS ® announced that beginning 2008, our members will have the option of upgrading to the newest state of the art electronic lock boxes.

The product and system selected by the Board is the SentriLock, REALTOR Electronic Lockbox.  The company is developing a new product to meet our needs in Hawaii.  With our many condos and gated areas there is a need for a box that can hold the various types of keys and cards for elevators, gates etc., along with the standard door keys.

Yesterday at a broker's forum held at the Hilton Hawaiian Village (the location of the 2008 CRS Sell-a-bration), our members were introduced to the SentriLock and what the basic implementation plan would be.

It was made clear that electronic lock boxes would not be mandatory.  This is a National Association of REALTORS ® directive.  The reason we will be able to implement them without requiring everyone to participate is that the box has the ability to operate in a manual mode also.

Honolulu implemented electronic boxes many years ago and it was a failure.  This time the lessons were learned and the product is far superior to the previous product.  I for one am excited about the new boxes. 

Some of their features that I am looking forward to are:

• Ability to take manual codes along with electronic smart card
• Up to 9 different 1-day codes
• Contractor codes
• IR port that will work with Treo phone
• Illuminated key pad
• Agent showing statistics
• Metal non-rusting case
• Durable replaceable cover
• Removable battery
• Replaceable battery and low battery warning
• Internet based administration

The number of features was mind boggling. I was so impressed I wanted to make the switch yesterday.  I guess I will have to wait with everyone else.

I know that we are one of the few major markets to make the switch.  What has been you experience with electronic boxes?  Do you use SentriLocks?

Yesterday I met a new Active Rain member.  Karla Timon from Bloom Again Homes Staging.  

As many of you know I have made comments on Active rain about how difficult it has been in Hawaii to find a real professional in the home staging business that I can work with and depend on.  In the past I have spoken to a few people in the business and found it like trying to grab smoke.  I can never get a handle on how they charge and what specific services they provide for the charge.

Speaking to Karla, an ASP Home Stager yesterday was like a breath of fresh air.  She was extremely knowledgeable and was able to clearly articulate what I and my clients would expect if dealing with her.

As I build my team and develop the new premium listing package, home staging will be an important component of that.  I am looking forward to working with Karla to help build that new segment of my business.

• Premium Service Listings - Would You Pay More?
• The Whole World is a Stage - Do You Stage Your Listings?

This is a question that comes up in conversation among REALTORS ® and the public regularly.  Why is this hard to answer?  It is because everyone has a different idea of what is full service or even service for that matter.

I turned on the morning radio and listened to local real estate agent talk about how he charges a lot less and saves clients money while providing them the very same services.  I thought that sounds like something the consumers would be looking for; the very same service for less money.

Later that day I heard a commercial for another company advertising basically the same thing.

That statement caused me to ask myself a few questions:

1. Save money over who's prices.  I know companies that traditionally charge even less than them.  I thought all commissions were negotiated.
2. Does the 1^st guy save money over the 2^nd guy or the other way around, which one is lying?
3. Whose services are they comparing to?  If they are comparing to me they do not provide what I consider full service.  At a minimum it is not even close to the same service.  In the one case I do not believe they agent ever even see the homes he is selling.

One of the companies who made this claim has printed right on the sale signs: "For Sale Buy Owner," the other company makes the home owner show the property and hold the open houses.  Not the very same service I provide.

I do not have a problem with someone deciding that their business model is to lower their rates and cut services.  Just be honest about it.  There is a segment of the market that will still come to your door.  I do have a problem with dishonest advertising.  To say you give the same service as me is not even remotely true.

As  I right this post I am sitting with my laptop on a Friday evening waiting to show one of my listings to a couple of agents and their clients.  I am willing to bet those other agents have their phones turned off for the weekend.

Village Park is a community in Waipahu, Hawaii (makes up part of tax map key 194).

Single family home sales volume has remained consistent with 2006 numbers, while average sales prices have seen increases over 2006.

Here are numbers for single family homes in Village Park:

Currently Active for Sale (July 16, 2007): 

• 16 Single Family Homes

Currently in Escrow (July 16, 2007):

•   4 Single Family Homes

*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/

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 picked up in June.  Inventory levels decreased in June to slightly over 3 months worth.  Sellers may find the market becoming a little more balanced in Royal Kunia for single family homes.

Condos and townhouses:  Sales volume of condos is small, due to the limited number of condo complexes in Royal Kunia.  The inventory level for condos also dropped to 3 months worth of inventory.     

Currently Active for Sale (July 16, 2007): 

• 26 Single Family Homes
•   5 Condos/ Townhouses

Currently in Escrow (July 16, 2007):

• 12 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/

I think the answer is both.  Shows that talk about flipping properties seem to ever simplify the process.  I find clients, who think they will buy a home, slap a few thousand in it and flip it for giant profits, all in 10 days.  That is where some of the shows on television have hurt us a bit.

In our real estate market on Oahu in almost every case there is one reason someone may be in trouble of losing their home.  It is usually because they made some real bad decisions or some catastrophic happened.  Our market hit a record median price high last month.  Homes should have equity in them unless the lenders loaned more than they are worth or the buyers put a ton of cash in them to fix and flip and ran out of money, etc.

Now there are some areas that have seen price softening, but they are the exception.

The type of real estate show that has made my job easier as an agent is the home staging shows.  They have helped me in two ways.

• They have given me a lot of tips about preparing homes.
• They have given my clients a more realistic view of what they need to do to prepare their home
•             Remove clutter
•             Paint
•             Carpet
•             Staging

When I meet with listing clients they are much more receptive to my suggestions to get their home ready. They are now more and more asking for me to go room by room and give them a list of things to do to get it ready.

So the home staging shows have been a winner for me and my clients. 

The flipping shows have been a bit of a problem for some of my clients.  With that said I still enjoy watching them.

Maili, Hawaii is located on the Leeward (west) side of Oahu. (tax map key 187).

Maili Single family homes sales volume has slowed from the 2006 numbers. Average sales prices year to date have continued to climb.  Inventory levels are continuing to climb with over 24 months worth of inventory.  Expect prices to cool with that many homes available.

Maili condos and townhouses have seen a drop in sales volume from the 2006 levels.  Average sales prices have shown an increase year to date.  There were no closings in June.  Inventory levels are quite low, so if the sales levels pick back up prices may continue to show increases.

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

Currently Active for Sale there are (July 15, 2007): 

• 104 Single Family Homes
•   13 Condos/ Townhouses

Currently in Escrow (July 15, 2007):

•   20 Single Family Homes
•     5 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/

Las Brisas is a development within the planned community of Ewa Gentry in Ewa Beach, Hawaii (makes up part of tax map key 191).

Single Family homes: The numbers in Las Brisas.  Sales activity ion Las Brisas has softened from 2006.  There is a lot of new homes development in the area competing with the resale market, along with a large amount of resale inventory in the neighboring communities.  It is a good time for buyers to find good deals in a time where Oahu median prices have been climbing and hit a record high island wide.

Currently Active for Sale (July 15, 2007): 

•  10 Single Family Homes

Currently in Escrow (July 15, 2007):

•  2 Single Family Homes

*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/