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Visiting the Islands? Check out our Hawaii vacation rentals.

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It’s time to “…give those banks that were rescued by taxpayers a chance to repay a deficit of trust.”

If you didn’t watch Obama’s 2012 State of the Union Address it was powerful. By the end of the address, Obama had the majority of the Republican party giving a standing ovation—I think that says a lot. It even had this hybrid Democrat/Republican feeling like I should be paying more taxes…ouch.

As it pertains to the real estate industry here in Hawaii, I’d like to share an excerpt from Obama speaking on the housing crisis:

“…millions of innocent Americans who’ve seen their home values decline. And while government can’t fix the problem on its own, responsible homeowners shouldn’t have to sit and wait for the housing market to hit bottom to get some relief.

And that’s why I’m sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low rates. No more red tape. No more runaround from the banks. A small fee on the largest financial institutions will ensure that it won’t add to the deficit and will give those banks that were rescued by taxpayers a chance to repay a deficit of trust.”

Decoding what Obama is Saying?

• Does this mean the cost of the refi will fall on the banks, not the government or the homeowners?
• How much easier will this make it for homeowners to refinance?

If you have any insight, or thoughts, please comment below. Personally, I agree with Obama that the banks owe the taxpayers for bailing them out—and the time to repay the favor is now.

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Differentiating between social media vs. inbound marketing and leveraging social media to grow brand.

Want the short version? Download the Inman Slide Presentation

The inside joke for social networking at Hawaii Life is “social not working.” That’s because our agents get lost in Facebook and Google +, not because social media doesn’t work. Social media does work, just not how we at Hawaii Life traditionally think about marketing. Maybe that’s because what is traditional at Hawaii Life is not traditional at all—and why, when we try to explain our business model, people look at us confused…like we’re from the future.

Hawaii Life is largely built on an inbound marketing platform, which we see as the norm. Inbound marketing, as defined by Hubspot, is “where you help yourself ‘get found’ by people already learning about and shopping in your industry.” If you’re not familiar with inbound marketing, I highly recommend Hubspot’s article. When reading the article, you’ll notice that Hubspot includes social media as a form of inbound marketing. We’ve tested this theory extensively and found that this is not the case, at least when it comes to integrating social media in real estate search. Our research shows that social media is more inline with traditional outbound marketing (a.k.a interruption marketing) like a television commercial or email blast to a large mailing list. Let’s see why:

Note: Want the short and sweet version? Here’s the PDF used to present this information at Inman Connect NY, 2012.

1) Search engine traffic has the potential to drive more traffic, but social media is growing more rapidly.

Insight: Search engine traffic (SE) = 225,592 visits vs Facebook (FB) = 6,111 visits. Year over year traffic growth for FB is more than 10x greater than SE. However, a majority of this growth can be attributed to integrating FB into search, so we can’t expect this rate of growth to continue. We can expect FB growth to outpace SE, but even at this rate FB traffic is nowhere near catching up to Google, but we expect it to surpass Bing and Yahoo in roughly 2-3 years (maybe sooner).

Another thing to note is that bounce rate is considerably higher for FB traffic. We’ll talk about why later.

2) Search engine traffic is driving the growth of our social media.

Insight: What’s interesting about this strategy is that search engines are driving the growth of Facebook traffic. Here’s how: When somebody finds HawaiiLife.com through Google and does a real estate search on our website, we make it easy for them to share property detail pages through FB, Twitter and Google +1. When a user “shares” the property, that property goes out to that person’s “friends.” The majority of traffic we see from Facebook is when one of those “friends” sees that property on their wall and comes to Hawaii Life to view the page the original person shared. Looking at HawaiiLife.com’s Facebook Insights, we know we get roughly 1,200 impressions per comment, share or like (tip: the more responses and likes a comment gets, the more chance it has at being placed on their friend’s walls). So, if 3 people share a property detail page it has the potential to be seen by 3,600 people.

3) This type of marketing is more inline with traditional advertising and should be used to grow awareness of the brand—NOT drive leads.

Insight: Remember when we talked about bounce rate earlier? The reason why Facebook’s traffic bounce rate is so high is because people are not engaging with the website once they get there. Instead, they’re checking out the property their friend is interested in. These visitors are not “already learning about and shopping in your industry,” as Hubspot defines inbound marketing. Instead they are being “interrupted” by what their friend is doing. What’s great is that Hawai Life is not interrupting them, their friend is. So, it’s much more acceptable and does not bring the negative connotation that an email blast does.

It is important to note that this type of outbound marketing traffic will not generate leads or sales like search engine inbound marketing traffic. That’s because the user is not actively looking for your product or services. However, like a television commercial, it is growing brand awareness.

4) Effectively handling social communication with Facebook leads.

Insight: We’re not saying that Facebook traffic doesn’t create sales. We know it can because it happens at Hawaii Life. However, you cannot treat a Facebook lead like a standard website lead. We’ve tried this approach and failed miserably. Every time we’ve asked for the sale on a Facebook lead, communication stops abruptly. What we’ve found to be most effective is to provide the information the consumer is asking for freely. When the person is ready to buy, they will contact you directly.

Another important thing to note is that the 6,111 visits from Facebook does not clearly communicate the effectiveness of this brand marketing. Just in the month of December 2011 Hawaii Life had 267 shares from its detail pages. With an average 1,200 impressions per engagement, Hawaii Life’s brand has potentially reached 323,828 people in one month. By providing, good, timely, free information, the user’s Facebook friends will see these communications, creating buyers and sellers down the road if these friends ever decide to buy real estate in our market.

5) Another benefit to integrating social in search is that social shares are becoming a stronger ranking factor in search engine algorithms.

Insight: Google’s algorithm is clearly showing the importance of social media in ranking results, which seems to be getting stronger daily. So, by integrating social into search, you are also improving search engine rankings and driving more traffic through Google, Bing and Yahoo.

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Looking past the cool new design and social media integration, what I’m most proud of is our “Value Score” which is still in beta.

What’s a Value Score?

HawaiiLife’s Value Score is a grade given to a property’s asking price. Our score differs from a valuation like a Zillow Zestimate in that we do not try and assess a property’s price. We made this decision not to provide a valuation because Zillow already does an excellent job of this, and we will be adding their Zestimate to our detail pages in the coming weeks through their API.

In this example property that we’re looking at, the grade given to this Anini beachfront home is a 93/100. To the right of the Value Score we provide some other useful data, including:

• Price/assessed ratio
• Living area price/sq ft
• Land area price/sq ft
• Year built
• Days on market

In each case, we provide the average of the homes we are comparing as well as a percentage, up or down, as to how the property in question compares to that average. In the coming months we will be providing the ability for:

• Consumers to create value scores based on a set of comparable properties of their choice.
• Agents to verify value scores by setting the comparable properties manually.

We’ve tried to emulate much of the data a local expert would provide you during your home search. Of course it’s not as good as working directly with a Realtor, but we feel that it’s great info for both buyers and sellers. Enjoy.

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1. Storm Brewing Over Hawaii Property Valuations
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Hawaii Life: Aloha Michael, thank you for taking the time to share your insight on Hawaii real estate investment.

Michael: Aloha! I want to thank Hawaii Life for inviting me to contribute on their fantastic corner of ‘digital real estate’ here at HawaiiLife.com.

Hawaii Life: Please tell us a little about yourself.

Michael: My name’s Michael Borger. I’m a real estate investor and the guy behind Big Rock Investments in Honolulu.

Hawaii Life: What are you here to speak about?

Michael: I hope in this brief post to explain what it is that I do, and in this and future posts to shed some light on what a ‘real estate investor’ in general does here in Hawaii.

My focus as a real estate investor depends on your perspective. From a business standpoint, I try to weave through all the activity out there to find properties that can be acquired at a sufficient discount below today’s market value. Single family, multi-family, condos, vacant land–it doesn’t matter. From preforeclosure to free & clear–I’m interested. And if the numbers work, then everyone’s as happy as a honu munching limu at Turtle Beach. But that’s from my eyes and that’s not what I really want to talk about.

Let’s look at the seller’s perspective and I’ll use the case of an elderly gentleman I helped just a couple weeks ago. He owned a 2nd property here on Oahu away from his primary residence that had unfortunately been trashed by some lousy tenants who took advantage of his age and distance. The house was in a good area but was in need of some major repairs. I met the seller at the property and we had a very nice conversation about his current needs. It turns out he owned the house free & clear but wanted some funds for another project. However, the condition of the house meant that it would likely sit on the MLS for months if listed. So knowing his immediate concerns, we agreed on a direct purchase amount between the two of us, all handled by escrow. The property recently closed and the seller is smiling ear to ear as he can now focus his energy, emotions and financial resources on more productive endeavors. Really, he’s one of the nicest guys you could ever meet and I’m very happy to have provided him the solution he needed.

That’s just one side of my business and there are many others that I’ll discuss in future posts, but it’s very important to get that out there. Being a true real estate investor in our Hawaii community is not about looking at every property thinking “what’s the lowest I can get it for?” Unfortunately this is all too common and gives the term “real estate investor” a bad name. Real estate investing is about finding a solution to someone’s problem, yet still making sense for the investor as a smart acquisition. Yes, we all want to get paid well for our efforts, but in my mind each transaction is a partnership and everyone has to leave a winner.

So that’s what I have for you today – I’ll be back again soon with more perspective on the Hawaii real estate investment market. Until then, thanks again to HawaiiLife.com for having me. Aloha!

Who is Mike Borger?
Mike says, “I’m originally a Philadelphia guy with an 8-year stopover in Washington DC. That means I root for Shane Victorino (go Phillies!), don’t consider “snow” a four-letter word and still expect the leaves to turn red in October. After five great years in Hawaii, I think I’m finally starting to turn the corner.

Big Rock Investments (888) 545-0003

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It saddens me to hear this news. To the point that instead of working, or surfing, I’m hanging out with my wife and daughter today…because Andy’s death has reminded me how valuable life is.

Andy’s wife is due with their first child soon. To me, this is darkness and light. See, I understand what it means to lose a Father, I just lost mine (well, I guess it was over 3 years ago, but it feels like it was yesterday). Though the experience is all still very dark to me, the positive thing that comes from my Father’s death is his children. We are my Father’s light, carrying on a piece of him in us, as Andy’s child will carry on a piece of Mr. Irons.

I also know what it is to be a Father, I had my first child almost 3 months ago. When my daughter’s crying, and I pick her up, and she calms down and smiles at me, I know that I am one person on a very short list that makes her happy. To know that Andy’s child will never experience a Father’s embrace makes my eyes well up.

I also know what it is to be a brother, a son, an uncle, a nephew, a cousin, and for all these things my heart goes out to Andy’s family and friends. He will be dearly missed.

I remember the last time I saw Andy, at a poker tournament several years ago. He wasn’t playing, but he stopped by to say, “Aloha” to the boys. During the game Andy smiled at me from across the poker table and began singing a Bob Marley song:

“Keep your culture
Don’t be afraid of the vulture
Grow your dread lock
Don’t be afraid of the wolfpack”

Andy was referring to an incident back in the day, when we were on a bus ride to Haena from Hanalei School. Our bus driver was high as a kite, and he was singing these lyrics to all the students on the bus. It was a moment in time that stood out in my mind, and obviously stood out in Andy’s too.

Later on that night I got heads up (one other person and I battling to win the tournament), and Andy was there rooting me on…in his own way.

“Come on, Justin,” Andy scolded, “You gotta smoke this guy.”

For those of you who knew Andy, then you knew his competitive spirit. Losing was not a part of Andy’s vocabulary, making me extremely nervous that night, I didn’t want to let the champ down.

Fortunately, Andy’s pep talks gave me the advantage and I won the poker tournament. But more importantly, I was reminded how a strong will can overcome any obstacle, and Andy had a very strong will. Determined, Andy accomplished his goal and became surfing’s World Champ…on multiple occasions.

I know I won’t see Andy out surfing anymore, but I look forward to the day I see his child out in the water. With competitive juices running through the child’s blood, I’m sure the grom will burn me for every wave, and I’ll just smile, because that was Andy.

R.I.P. A.I.

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This video shows archival photographs from the Bishop Museum depicting Hawaiian homes of our island’s Ali’i (royalty). Modest by today’s standards, these were the luxury homes of Hawaii in the not to distant past.

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We just updated the best deals in Hawaii over at TopTenRealEstateDeals.com.

Kula view home with attached Ohana to assist with affordability (MLS# 343327)

It was pretty tough choosing the top 10 home deals this month because most everything I had on my list had gone under contract. It feels like the good deals are being sold in just a few days.

The list starts with a couple of Maui homes, one REO and another short sale. Both are 1 day on the market and probably won’t last very long.

Then you’ll find the lowest priced Kona oceanfront home on the market, a 40 room Honolulu mansion for 30% off, and a Frank Lloyd Wright property for $1.5M below the original list price.

All in all, there are 10 smokin’ deals. Check them out →

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Source = The Notorious R.O.B., read their article on Dual Agency by clicking on the image above.

Avoiding Dual Agency

For those of you who have worked with Hawaii Life Real Estate Services before, you are probably aware of our stance on dual agency. If not, here is what we have to say on the matter (taken from our Sellers Services page):

“You’re our client, and we take that very seriously. We actively avoid representing both buyer and seller in the same transaction. We’re committed to our fiduciary responsibilities of loyalty and obedience to you, so we avoid what’s called a “Dual Agency” transaction in which we “represent” both parties.

We learned from experience that people don’t want a “neutral” party handling their real estate transaction, they want a full-service real estate broker working to advance their best interests. Our customers and clients, whether buying or selling, have responded extremely well to our commitment.”

Just to show you how serious we are about avoiding Dual Agency, here’s an article that our Principal Broker, Matt Beall, has been circulating as required reading material to our agents. The article was written by The Notorious R.O.B. (an informative real estate blog):

Random Thoughts on Dual Agency →

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