Foreclosure Alert – Hawi Oceanfront Mansion at Auction Again

Six months ago, I reported on three foreclosure auctions set for Hawi properties, including a luxury-class oceanfront estate. That property reverted to the lender, as so often happens at foreclosure auctions…I’ve been keeping my eyes open, but was taken by surprise to see it released in the MLS yesterday with fine print describing the auction process.

It looks like the bank’s asset manager listed it directly with auction.com rather than giving the listing agent a shot at a regular sale first. More on the auction in a moment, but first, let’s take a look at the property.

Absolute oceanfront luxury (MLS# 244454) could sell at auction for a fraction of replacement cost

The preferred terminology these days for properties at the top of the market is “luxury residence” or “estate home.” I deliberately used the “M” word (mansion) to describe this distinctive oceanfront residence of 13,143 sq. ft., six bedrooms, 7-1/2 bathrooms on 21 acres. The Hawi oceanfront mansion was built for an owner whose taste is more Venetian-crystal chandelier than tiki torch.

We often find with properties sold in the $10-$17 million price range (previous listing price for the home), the new owner will completely remodel, but this two-story granite-clad home has a massive presence and old-world interior elegance that is not exactly the fashionable “resort style,” and remodeling will run to more than just cosmetics.

If you are looking for the mid-century modern architectural stamp of Vladimir Ossipoff, or the Big Island aesthetic of Lucky Bennett, this isn’t the house for you, but if you want an imposing statement house that is an oceanfront retreat, at once completely private and yet bicycle distance from the restaurants, galleries, and small town charm of Hawi—and for a foreclosure price—this is it.

A prospective buyer from Hollywood or Bollywood? Someone whose other “second” home is in the Hamptons or Buzios? A corporate retreat or healing center? The mansion’s views are protected by an adjacent gulch and I swear that the closest I’ve ever seen a whale breach from shore was when I was standing next to this home’s hot tub.

There are also two 20-acre parcels of vacant land from the subdivision listed for sale (technically these are not oceanfront, as the entire oceanfront was assigned to the lot on which the house stands). So, although the available parcels do not include the lot closest to the home site, they are contiguous with the home’s lot across the oceanfront. They would provide an option for extensive equestrian facilities, or to create a family compound.

As mentioned, previous listings on this property ranged from $10-$17 million. The current asking price is $4,999,995 and according to auction.com, online bidding begins at only $2,900,000. There are similar Hawi, North Kohala oceanfront parcels that would cost more just for the raw land (for example (MLS# 206562) at Ranch at Puakea).

Here’s where it gets silly. You may want to read my earlier articles about real estate auctions (listed below) as background to my comments. The previous owners told me that before the bank foreclosed, they had actually recommended listing with Concierge Auctions, and that the Concierge people had flown to New York and Florida to present their credentials after successful auctions at Hualalai and Kukio. The bank declined. Now the bank has chosen auction.com.

Go ahead and register. Search for upcoming auctions on the Big Island. You will find eight properties listed. Seven of those properties have starting bids of $19,000—$89,000. The eighth has a starting bid of $2,900,000.

Maybe that’s why the bidding instructions say that along with your bid you must give a credit card, so they can authorize a deposit of 5% of the total purchase price (total purchase price being your bid plus the 5% buyers premium). So, let’s say I bid $3 million even. Total purchase price is $3,150,000 and so my credit card will be charged $157,500. Forget about proof of funds if you are considering this property, you’d better call your bank about your credit card limit first!

Alternatively, if you are seriously interested, you have until Friday, April 22nd to submit an offer through your real estate broker. Assuming you work with a broker knowledgeable about the property that would also give you the inside scoop on the property’s history, explanation of zoning codes, oceanfront access requirements pertinent to the property, the ability to look at alternative properties, and research comps before making your offer.

You would certainly want to make your offer contingent upon due diligence including a thorough home inspection. This is a foreclosure sold as is after all! I have a list of open house dates and times, and would be happy to accompany prospective buyers…

Several of us at Hawai’i Life know a great deal more about this listing than the REO agent who will be at the property. Short notice is okay, as I live a short distance away.