Although deals were scarce in my reviews of the condo market at Mauna Kea Resort and Mauna Lani Resort, I feel like I should have titled this report on Waikoloa Beach Resort, “the deals that got away.”
Two weeks ago I started with Mauna Kea and while I’ve been working my way south along the Kohala Coast, two best buys at Kolea have gone into escrow. One was a REO (bank-owned property for sale after foreclosure); the other was an unfortunate situation where the owner listed at a fire sale price for health reasons.
Looking for the next great deal at beachfront Kolea? The only penthouse under $2 million is currently 2F listed at $1,799,000 (MLS# 248442)
How to be Successful at Buying a Scarce “Deal” in Hawaii Real Estate
If you are interested in buying a short sale or REO/foreclosure, we’ve covered the basics in other blog posts. In a market like the Kohala Coast where real estate deals have become scarce, you want to give your offer the greatest chance of success. Our team is having terrific success this year at coaching our buyers to the winning bid on hot listings…whether REO or just “priced to sell”.
Here are some of our tips:
1. Write a clean offer. Know in advance the selling bank will not pay for any repairs, termite inspection, the cost of condo or subdivision docs (and if it is a single family home or lot and you want it staked, you should plan to pay for that as well). Even if you are dealing with a non-bank seller, if you want a deal on price, waive as many contingencies as you feel comfortable in the offer.
2. Jump through their hoops. For example, on the Kolea REO the selling bank required financed offers be submitted with a prequal letter from Bank of America, even though BofA will not actually finance a purchase at Kolea. If you plan to get a mortgage, be prequalified with the right lender for your purchase…and if you have to duplicate effort to comply with requirements of the seller, don’t hesitate. If the seller is not a bank but they have specific terms they’ve given their agent with respect to closing date, furnishings, escrow company or anything else…concede the small things.
3. Be prepared for a bidding war. The second Kolea new listing mentioned above hit the market late on a Wednesday afternoon. There were no photos of the condo for sale, and remarks said it could not be shown until the following Monday. By Sunday the listing agent had received 5 offers, of which four were at or above list price. So study the comps, know in advance what the upper limit of your comfort zone is…and don’t hesitate to go there. If your agent is experienced with these situations they can help you make sense of the comps, and should have a good feel for what the premium is running in a “highest and best offer” competition.
The Shores at Waikoloa Beach Resort has tennis courts in addition to a pool and exercise room
The Best Buys are Not Always Visible to the Naked Eye
When there were lots of foreclosures and short sales on the market in Hawaii, it was easy to feel confident about getting a deal. In a market where inventory has dropped, you may have to dig a bit for that golden nugget.
(Skeptical reader, I know you’ve read all the articles about the big shadow inventory that lenders are about to dump on the market. I spend a lot of time looking for it, and I’m pretty sure it doesn’t exist at the Kohala Coast resort condo complexes. My sources are several.
For example, every time we sell, our buyers get a chance to review the minutes of the association board meetings, and we’ve seen a steep decline in delinquent dues. It’s a big deal when we see even one condo on the lis pendens our favorite escrow officer provides. But if waiting for a foreclosure opportunity is your strategy, don’t forget you’re not alone! Please see tips above.)
Where I’m looking for deals to appear – or sellers to accept offers well below their offer price – would be the two older condo complexes at Waikoloa Beach Resort. The Shores and Vista Waikoloa are solidly built, have ample lanai space, and are convenient to the beach at A-Bay and the Kings Shops.
Because many of the units have not been renovated and they do not have the granite counter tops today’s buyer expects…and many of the owners have no urgency about selling so prices have not screamed “deal”…the inventory levels are higher at the Vista and Shores than at competing condo communities in the $250,000 – $500,000 price range. For example, there have been only 5 sales in the past 12 months at the Shores…and there are 15 active listings. Officially three years of inventory = a buyer’s market!
Some units at the Shores have remodeled kitchens, such as this short sale listing
I have two picks at the Shores. The first is a new 2-bedroom short sale listing, asking price $279,000 (MLS# 255489). The most recent 2-bedroom short sale just closed for $255,500 and like this one, actually has the granite counter tops!
I also have a fondness for the ground floor 1,484 sq. ft. oversized two bedrooms units on the golf course with the 450 sq. ft. wrap-around lanai. There are three of these listed, at asking prices from $419,000 to $749,000. My pick, of course, is the lowest priced among the three, Shores #11 (MLS# 249556)…although you may want to remodel both bathrooms, the seller has already taken two price reductions and the location is sweet.
The Only Active Bank-Owned Listing at Waikoloa Beach Resort: Vista Waikoloa
The Vista Waikoloa is located right across the street from Kolea and adjacent to Buzz’s Steakhouse. Probably were called “Vista Waikoloa” because prior to Kolea being built they had an ocean view.
There are only five active listings, and there were four sales over the past 12 months. The deal here is both obvious and not. A 2-bedroom 1,417 sq. ft. REO (foreclosure) is listed for $339,900 (MLS# 253704). Obvious – it’s a foreclosure!
Two things are not obvious…first, the right price to offer. The most recent sold comp in a first-floor unit was at $350,000, fully furnished. The foreclosed condo has been for sale for over 100 days with only one price reduction, so this is a situation where if you want this larger Vista floorplan, you wait patiently for the next price reduction…or sneak in just before with an offer below asking price.
The second thing about this pick is also not visible to the naked eye…because no one clicks through to read the description of the “ocean view” from this unit…and it certainly is not visible in the photos. Distant, yes…across the driveway and through the trees, yes…but there. The listing agent is off-island, so we took some better photos…email if you’d like to see them.
A hui hou,
Beth Thoma Robinson, R(B)