The intent was to try to give owner occupants of Hawaii properties an opportunity to sit down with the lender in a non-judicial foreclosure to attempt to negotiate the terms of the loan. It also allows either the borrower or lender to convert the non-judicial foreclosure to the judicial process. For details read Maui News article from Associated Press on Act 48.

Temporary rules on how this process is to be implemented were put into place May 18, 2011 by the Hawaii Supreme Court. The process, the forms, and the filing rules are contained in the following, Hawaii Supreme Courts Rules for Act 48.

The problem really is that the courts are already buried with work, understaffed, underfunded, and Act 48 will just bring the circuit court system to a stop. Act 48 created no additional funding for the court system to be able to handle the additional work load that they will now be faced with. Furloughs and budget cuts negatively affect the court system.

Presently, it takes about a year for a lender in a judicial foreclosure in Hawaii to complete the process. The Stice Team has been working with several Hawaii banks that do only judicial foreclosures and we have seen through the experiences that the courts are already clogged up. Getting the hearing date for the foreclosure takes 4 or 5 months and the confirmation hearing that is supposed to follow 30 days later is taking over 60 days most of the time.

The following data comes from Realty Trac for May 21, 2011. By zip code, these are the numbers of either bank owned, or pending foreclosures on Maui:

• 96732 Kahului: 195 properties
• 96793 Wailuku: 332 properties
• 96761 Lahaina: 450 properties
• 96779 Paia: 17 properties
• 96753 Kihei: 581 properties
• 96708 Haiku: 75 properties
• 96790 Kula: 54 properties
• 96713 Hana: 8 properties

For a total of 1,712 properties.

Of these 1,712 properties, more than 80% represent non-judicial foreclosures that could possibly be added to the court docket under Act 48. Realtors Association of Maui April, 2011 Statistics show that for the entire past calendar year 832 homes have sold, 1,121 condos, and 121 vacant land parcels have sold for a total of 2,074 properties. Presently on the market are 3,068 properties, or a little more than a 10 month supply.

While well intended, this bill is going to have a detrimental long term effect on the real estate market. Considering the present backlog of 1,712 unsold properties (many of them presently not even on the market) stopping the process of non-judicial foreclosures, and throwing all of that inventory into an under-funded and under-staffed court system is a disaster. More and more owners are going to quit paying their mortgage, hoping that the judicial system will bail them out and that will just not happen.

The HAMP program has been a disaster for most homeowners because it was just not a logical program. The amount of paperwork and requirements buried most homeowners expecting to get a loan modification despite declining values. It gave them false hope, in most cases, and unrealistic expectations. Most homeowners applying owned a lot more than their homes are worth.

More programs and moratoriums is not what Hawaii, or the United States needs. We need lenders to sit down at the table, help work short sales with all borrowers, homeowners, or investors and expedite getting the properties sold. We need lenders to cooperate with people who want to keep paying, even if they are upside on their loans. Personal pride is huge in our community and many people just don’t want to lose their homes, at any price, if they can possibly hang on.

Social engineering may seem great and our democratic legislature certainly has given us a great taste of it with this bill, but obviously, we don’t have a whole lot of economists or business people in the legislature. Look out, because the train is just picking up steam.

Should you have any questions, contested points, or opinions, I welcome you to comment on this blog, or contact me for a private conversation.

Here are a couple of galleries with the Stice Team’s pics of the best bank owned/REO/foreclosed properties on the market right now:

• Our Week of May 16, 2011 Maui Best Buys
• Our Top Maui Foreclosure Picks
• All Maui Foreclosed Homes
• All Maui Foreclosed Condos
• All Maui Foreclosed Vacant Land

Related posts:

1. Act 48 – Will this Foreclosure Law Ruin the Hawaii Market?
2. Hawaii Foreclosure Law Passes – Will it Help the Consumer?
3. Act 48 From the Trenches – Fannie Mae Going Judicial

Real Estate Newsflash – Washington D.C. to Maui

Fortunately, I did get to enjoy a little recreation time in D.C.; here I am posing with FDR (President Roosevelt) on one of my bike rides around town

A sense of urgency that I have not seen in over ten visits to Washington D.C. prevailed this week within our membership at the National Association of REALTORS® (NAR) in our annual meetings with Hawaii legislators.

The week ended with a large dues increase for all members of our association to help our organization be competitive with interests that could be in line with our values of promoting real estate and home ownership in the United States. The urgency comes in the form of five main issues that were presented to Congress members Colleen Hanabusa and Maize Hirono, and Senators Daniel Akaka and Daniel Inouye.

Our Hawaii Association of REALTORS® members presented key points on the following issues:

1. Affordable and Available Flood Insurance

Last year, after the expiration of the short term extension of the National Flood Insurance Program (NFIP), 47,000 transactions were not able to close. The present program expires Sept. 30, 2011. House Bill H.R. 1309 has been introduced that will extend the program for five years. NAR supports this program that has been self-sustaining and does not cost tax payers money. With more accurate flood maps, more properties now require flood insurance to obtain financing. Without flood insurance available, more properties in flood areas will become further distressed, and these areas will decline in value and they may not be able to be sold for lack of financing.

National awareness of floods and the affects on home ownership exists, especially with the devastating tsunamis that we have seen in the recent past. Here are two blogs that I wrote about my personal experiences with the most recent Maui tsunamis; Maui Tsunami Warning at Maliko Bay and later that day I experienced this Maui Tsunami Update – Kahului Harbor Gets a Wash Down

2. The Future of the Secondary Mortgage Market

Presently, Fannie Mae and Freddie Mac (The GSEs) constitute about 65% of the secondary mortgage market in the United States. Two bills presently in the House H.R. 1182 and the Senate S.693 both propose shutting down support by the federal government of these two entities without offering a replacement, or phasing in of alternative secondary market options. Private money has all but evaporated from the secondary markets and without the GSEs, FHA, and VA loans, there would be almost no loans available to buyers.

With no loans, inventory will not move and we will see further declines in value across the country to an already distressed market. NAR opposes both of the proposed bills, and seeks extension of the present programs and incentives to promote development of a private secondary mortgage market to keep money available for mortgages. Because of the stringent regulations on mortgages, we are seeing a lot more cash buyers in the Maui marketplace. Read one of Jeremy’s recent blogs on this subject, Cash is King in Maui Real Estate Market

3. Access to Affordable Mortgage Products

Presently, there is a proposal in the Senate S.693 and House H.R. 1182 that would drop the GSE loan limits to $417,000. A proposed rule would require a 20% down payment for a Qualified Residential Mortgage (QRM). NAR message to our legislators is to keep the present loan limits due to the high average sales prices in Hawaii and to keep affordable, lower down payment programs available to qualified buyers. The higher loan limits expire Sept. 30, 2011.

It is important for us to have affordable loan products like this, so our hard working citizens, like my daughter Brianna Stice, who is a first year Maui police officer in Kihei, can purchase their first homes. The Stice Team is in the process of assisting Brianna with a purchase of a REO/bank owned/foreclosed condo in Kihei and she is utilizing a Homepath loan that allows her to purchase the property with 3% down payment, and her closing costs are lower because there is no appraisal fee.

4. Preserving Home Ownership Tax Benefits

Although no specific bills have been introduced that would change the current tax deductions for mortgage interest deductions, this is an area of great scrutiny, particularly for mortgages over $500,000 and second homes. NAR will continue to remind Congress that any change in the tax rules that apply to home ownership would disrupt the market and cause home values to plummet further.

5. Short Sales

A bill has been introduced in the House H.R. 1498 - Prompt Decision for Qualification for Short Sale Act of 2011, that would require a lender to reply to a short sale request within 45 days of submittal. This bill has yet to be heard. If this bill comes to a hearing, it will allow NAR to testify on the present problems presented to most buyers and sellers with short sales.

As it is now, huge amounts of time are being spent on short sales that ultimately end up in foreclosure, or the seller filing bankruptcy. Buyers shy away from short sales as a result because there is no process to ensure that their commitment to the process will bring forth the result the desire – the purchase of the property.

On a local note here in Maui, we have seen some financial institutions vastly improve the short sale process and recently, my son and business partner Jeremy, just closed his first short sale transaction and has another set to close in 2 weeks. Read about his client’s success story, Deal – Kahana Ridge Short Sale Success Story.

The Stice Team has a renewed sense of confidence in short sales and is now starting to promote them as some of our best buys. Read about one of these short sale best buys, Deal – Fantastic Kaanapali Foreclosure and Short Sale.

What does this mean to Hawaii and Maui buyers?

It is extremely important that we keep our Hawaii loan limits where they are at. It is vital that the secondary loan market remain in place, and it is imperative that the government continue to allow mortgage deductions on both primary residences and second homes. Although the short sale process has greatly improved, it still needs a lot of work and I firmly believe that this is the best interest of the homeowner, the banks, and market as a whole.

Please feel free to contact me if you would like more detailed information on this, and/or if you have any questions.

Report by Tracy S. Stice, Realtor
NAR Director for Hawaii 2011
President, Hawaii Association of Realtors 2010

Related posts:

1. A Message from the President of the Hawaii Association of Realtors
2. Hawaii Life Real Estate Brokers Katie Minkus is New Vice President of Hawaii Association of Realtors
3. Act 48 – Hawaii Real Estate Values to Decline

Hawaii Life had quite the year in 2010. If you read the Chinese horoscope for the “Year of the Tiger”, it’s a fairly accurate description of our past year…the Year of the Tiger is often characterized as a courageous and fiery fighter who wards off tragedy. Tigers are gracious, independent, active and self-assured. Sounds like Hawaii Life to me. (It couldn’t hurt that I was born in a Tiger year, too.)

Reflecting on 2010, I read through my calendar, looking at all the appointments and commitments I made. I looked at my previous blog posts, my Facebook account and other social media. It was quite the exercise. It’s amazing what we’ve accomplished this year…

In 2010, Hawaii Life more than tripled in size. Our sales went from $58M in 2009 to $155M in 2010, we did 84 transactions in 2009 compared to 311 in 2010. We brought on 58 new brokers and agents around the State, and we converted 4 of our sales associates into licensed Brokers. Incredible.

At the beginning of the year, we hired Tracy Stice R(B) to be our Broker-In-Charge of Maui. Even while he was acting as the President of the Hawaii Association of Realtors for 2010 (a very demanding position), Tracy managed to open our Kahului office and bring on board the 22 associates we currently have on Maui. Big kudos are also due to Tobi Fisher R(S), our Director of Sales on Maui, for her continued support in that process.

To say that Tracy brought Leadership to Hawaii Life would be a gross understatement. One of his first acts of business was to (basically) mandate that we hire Beth Holiday of Inner Dynamics as our business coach. Working with Beth continues to be one of the smartest decisions we’ve ever made. Working with Tracy and Beth led to both Katie Minkus, R(B) and I applying to the Hawaii Association of Realtors Leadership Academy. It was an absolutely transforming curriculum (four intensive 3-day sessions over the course of 8 months).

On the technology front, 2010 brought a few major milestones (I can share most of them ;-)):

• We were able to get our entire company onto the same CRM (Client Relationship Manager) platform. Now, we all use the same software to keep track of our clients, customers, and prospects. Getting our custom-made software to work with this new platform, and getting almost 100 agents to use it, was an incredible accomplishment. We now have a reliable way to keep track of the 9600 user accounts on our website, and the ability to interact with them in a way that’s meaningful and effective.
• Our Creative Director, Winston Welborn, and his team built our Direct Marketing System from scratch. Synced with all three of Hawaii’s MLS providers, the system allows agents to Gather, Create, and Send quality print and e-mail marketing materials easily and for free. Agents can spend more time with their clients and less time formatting brochures, printing labels or (god forbid) sending out irrelevant spam.

• We turned on the RETS feeds for the islands of Maui and Oahu. RETS allows our clients and customers to have the most current information possible about the real estate market, since we can update the market information regularly throughout the day. Having market information first has proven hugely valuable for home buyers, especially if they’re interested in REOs or particularly good values. We’re hoping that Kauai and the Big Island’s MLS offers RETs in the near future.
• Our Brokers-In-Charge have taken the initiative and continue to host regular webinars for our entire staff, offering training on everything from technology to transactions. It’s been a brilliant resource for Hawaii Life agents and brokers.

In June, we were nominated by Inman News as one of the country’s most Innovative Brokerages which, especially considering the other nominees, was an incredible honor.

On the “brick & mortar” front, we opened five new offices in 2010. The first was in Kahului, Maui, in the former corporate headquarters of Maui Land & Pineapple. It’s quite the setting. I can’t say that we’ll be there forever, but the central location in Kahului was a great jumping off spot for us to get started on Maui. Next up was our (anti)corporate headquarters in Princeville here on Kauai.

Hawaii Life's Headquarters, North Shore Kauai

Just a month later, in July, we formed a business relationship with Hawaii Vacation Rentals and remodeled and opened our first office on the Big Island, in Puako. By the fall, we were back to Maui to open our second office in Wailea, shortly after Dano Sayles R(B) and his team joined Hawaii Life. Then, in October, we hired Charlie Parry R(B) as our second Broker-In-Charge in Kona on the Big Island, and opened his office in Kona as a Hawaii Life office. Then, after all that, we seriously upgraded our presence in Kapaa on Kauai by opening a new office downtown. Wow… that’s a lot of “brick & mortar” for a “boutique internet company.” ;-)

A few big events from 2010 also warrant mention… our commitment to Leadership has led to a lot of volunteer work for our local and State Realtor Associations. The Kona Board of Realtors nominated three Hawaii Life agents for various awards, and Erik Hinshaw R(S) won ‘Rookie of the Year’. Our management team includes an HAR President in Tracy Stice, a (2011) President of the West Hawaii Association of Realtors in Katie Minkus, a (2010) of the Kona Board of Realtors in Charlie Parry, and just a few weeks ago, I became the President-Elect of the Kauai Board of Realtors. Getting our management team together for Hawaii Life’s annual broker summit in October was quite the experience. We set the pace for quite a year in 2011…

• We’ll open an office in one of Oahu’s finest neighborhoods, Kahala! We’ve just signed our lease, and David Buck, our Broker-In-Charge on Oahu is spearheading that operation.
• We plan to take our Property Management Services statewide. We’re changing the game in property management, vacation rentals, and guest services in Hawaii. We’re using Kauai as a model, and then we plan to offer our services to homeowner’s and guests throughout the State.
• We’re changing our name to Hawaii Life Real Estate Brokers, a name that we feel more accurately reflects who we are, our commitment to teamwork, and service to our clients.
• We’re looking to improve our “brick & mortar” presence on Maui & the Big Island… negotiations for new offices are in the works.

I’m sure I’ve left things out, feel free to add them.

Big Mahalos to everyone who contributed to such a fantastic year. To all of our clients, customers, friends and family… MAHALO! See you next year…

Related posts:

1. I Can Only Sell What I Believe In
2. Hawaii Life Partners with Hawaii Vacation Rentals in Puako, Hawaii
3. Captain’s Blog, June of 2011

The Hawaii Association of Realtors’ President, Tracy Stice, has joined Hawaii Life Real Estate Services as the Broker-In-Charge of Hawaii Life’s new Maui branch office, located in the former corporate headquarters of Maui Land & Pineapple in Kahului.

Tracy Stice, R Hawaii Association of Realtors President 2010 and Broker-In-Charge of Hawaii Life Real Estate Services on Maui

Hawaii Life’s commitment to education and technology appealed to Mr. Stice. In his recent interview as HAR President, he told the Hawaii Realtor Journal:

“The market is permanently changed. Sitting in offices and waiting for people to walk through the door is obsolete. You need more internet contacts and you have to constantly educate yourself to acquire new skills. Those who don’t adapt to new technologies won’t make it.”

Mr. Stice has been a licensed Realtor on Maui for more than 30 years, and his reputation as a professional and community volunteer is well known throughout Hawaii. He has served as the President of the Realtors Association of Maui, and has chaired the Hawaii Association of Realtors Political Action Committee and the Legislative Committee. In 2004, he was named Realtor Broker of the Year by the Realtors Association of Maui.

As Broker-In-Charge for Hawaii Life on Maui, Mr. Stice is the perfect leader to share the business model with buyers and sellers on the island of Maui. He is a member of the Certified Residential Specialists, a Certified Real Estate Brokerage Manager, a Graduate of the Realtor Institute, an Accredited Buyer Representative, a Resort and Second Home Property Specialist, and one of the first Realtors in Hawaii to earn the National Association of Realtor’s GREEN Designation.

The leadership, service, and experience that Tracy Stice brings to Hawaii Life is unparalleled. The County of Maui now has a wonderful option in real estate services, to work with Hawaii Life under the leadership of the Hawaii Association of Realtors’ President.

Related posts:

1. Katie Minkus, BIC is President-Elect of the Kona Board of Realtors!
2. Hawaii Real Estate Continuing Education Going to 20 Hours
3. Hawaii Life Real Estate Brokers Katie Minkus is New Vice President of Hawaii Association of Realtors

Our Hawaii Life Principal Broker, Matt Beall, has written an excellent article about whether real estate agents provide value, especially given how technology has changed the real estate industry to the benefit of the consumer.

As Matt has previous explained, before the advent of the Internet, your local MLS (multiple listing service) compiled listings into a fat book which it sold to participating agents. You the consumer could only get access to the information via an agent. Was that providing value? In a sense it was, but there was a strong element of control, as there was in most consumer markets.

Remember the Clue Train Manifesto? When that website (and subsequent bestselling book) appeared in 1999, the authors reminded us that markets are fundamentally conversations about value. Markets were getting smarter and faster thanks to real people entering into conversation with one another via the Internet. And consumers were getting smarter about using online networks to obtain real information real fast; the companies that served them were slow in waking up to the new reality as an opportunity rather than a threat.

Ten years later, real estate is still struggling to catch on. Most real estate company websites are essentially monologues, blatant advertising, anything but a vehicle for conversations. They push information and their sales pitch at the consumer. No wonder consumers turn to Zillow, Trulia, and other websites that give them information AND a chance to participate in market conversation. No wonder smart agents are out having genuine conversations with consumers on Zillow, Trulia, ActiveRain, their blogs, Facebook and Twitter!

Of course, one problem with MLS data, whether you are searching it via an individual real estate company’s website or on the official MLS site or Trulia or Realtor.com, is that each listing agent is responsible for the descriptive and photographic content associated with their listing. And many have not figured out that their audience is no longer another local agent! Maybe you’ve seen listings where agents pitch other agents in the public remarks (“Bonus to selling agent!”) which I would think is a pretty big red flag to a prospective buyer.

Many listing agents haven’t figured out that the better the information they provide, the better they are marketing their Seller’s property (marketing means assisting the right prospective buyer to identify him or herself). How often have you seen a listing where the description just repeats property data (“Beautiful 3BR/2BA home with over 1,400 sq. ft. of living area…”) or where it says the property has “wonderful ocean views” and fails to include even one photo of the view?

Did you know that the state of Hawaii does not even have an integrated MLS? How user-friendly is that, when often a prospective buyer is sitting on the Mainland planning a trip to answer the question “Which island is the best fit for my lifestyle and budget?” When you use our Hawaii Life website to search the MLS for properties, we are integrating feeds from the various MLS services serving our state. That is just one example of how Hawaii Life has done an excellent job of thinking through what a potential buyer of real estate wants a real estate website to do.

We can’t compensate for the quality of the data directly. Technology can’t edit what the listing agent submitted to the MLS in the first place. And that’s where the high tech/high touch approach adds value. We are also making it easier for a Hawaii Life agent to enter into a genuine conversation with you as a prospective buyer. You can jump into the conversation on these blog posts…or inquire about a particular property and begin an ongoing dialogue with a knowledgeable agent. Your agent can help you sort out how properties compare, or preview them for you in advance of your visit. Their job is to add value to the conversation because raw information is everywhere.

Let me give you an example of what it means to me to add value. Big Island broker Katie Minkus and I have been working with a local couple who see current market conditions as a once-in-a-lifetime opportunity to buy an oceanfront acreage. (Note that they could have walked in the door at any local real estate office, but instead they began searching late at night from the comfort of their home! 

On our first excursion, we went to look at the North Kohala parcel they initially inquired about, as it is one Katie and I both knew and thought would be a good fit for them. They then continued their research using our website, thinking there might also be something interesting on the Hamakua Coast. One of the properties they came up with was unfamiliar to us. Since they live here on the Island, rather than previewing it for them we all piled in the car to look together.

The photo in the listing showed something like this:

Hamakua oceanfront lot

If you swivel in place 180 degrees, your view is something like this:

Hamakua oceanfront rear view

OOPS! But on our drive back to Waimea, Katie remembered another property, not yet on the market because it is still in the subdivision approval process. We set up an appointment to see that property, which our clients could not have found on any website since it is not yet on the MLS. Here is a portion of the 180-degree ocean views from those oceanfront land parcels, looking towards Waipio Valley:

View towards Waipio Valley

Yummy! And to top it off, we ended our day at a second parcel near Hawi that is a great alternative to the one they initially inquired about. This one has great photos on the listing; they probably missed it in their research because the asking price is somewhat higher than they were looking at. What they didn’t know is that the listing agent has repeatedly told us the seller is “motivated”, in which case it would likely fall right into our client’s target price point.

Sellers: You’ve heard that all real estate is local and that’s true, but the Internet is global and that’s where the buyers start, even if they live next door to you. Which means today’s Hawaii real estate seller needs a local agent with a global technology advantage. High tech, high touch adds value for sellers as well.

Related posts:

1. The Negotiating Edge in a Hawaii Real Estate Transaction
2. Hawaii Real Estate Agency Laws
3. Hawaii Real Estate Continuing Education Going to 20 Hours

Along with Katie, we’d like to welcome 3 other agents joining the team:

• Pamela Deery (Realtor-Broker)
• Lucy Clark (Realtor-Salesperson)
• Janis Nores (Realtor-Salesperson)

This marks an important day for Hawaii Life Real Estate Services, LLC as we make our push state wide. We are looking to have Brokers on Maui and Oahu by the end of Summer.

Again, welcome and a big Mahalo to our new Brokers and agents.

Related posts:

1. Hawaii Life Partners with Hawaii Vacation Rentals in Puako, Hawaii
2. Mahalo Nui Loa to 2009, From Hawaii Life on the Big Island
3. Dynamic Ease – How a Team Approach Lets us Cater to Clients