There hasn’t been a lot of new project sales worth mentioning in the past year, but I have to say, this Realtor believes this is the project to buy. The last project in the prestigious “Nauru” development area of Kakaako, Waihonua (which literally means “waters of the earth”) has all the makings and potential to become the “it” building.

Waihonua boasts 345 brand new pet-friendly units, energy efficient lighting and water heating, plus fabulous windows—expansive insulated, low-E glass window systems to suppress heat. Basically, it’s the first new project to start to have a hand in being energy efficient from the start.

The most recent developments, Hokua (built 2006) and Koolani (built 2006), either tripled in the past five years or increased in value by $200,000 to $300,000 respectively. I’m not saying that Waihonua will follow suit, but I would be amazed if it doesn’t. It’s the only spot left in the highly desirable Nauru skyline. It’s economics—supply is low and demand is high.

The craziness begins; vying for numbered tickets, these home buyers hope to get their number one picks

I was there the day the doors broke open to start the craziness that would be the sale of Waihonua 1, 2, and 3-bedroom condo units. Most people seemed to be interested in the 2-3 bedroom condo units, but my client and I were all set on our one-bedroom high hopes and were able to score the exact unit that he wanted. We were number 29 (remember, there are 345 units available). 

It was exciting to see such excitement over a brand new condominium building, a sight we haven’t seen for a very long time. Let’s hope there are good things to come. The building isn’t sold out yet. Check out the availability and price list and see if one could work for you: Waihonua Price and Availability List.

Some Tips When Preparing for the Purchase of a New Project

1. Do some recon: Ask your Realtor to contact the sales office to find out the specs, when to be there, how they will be running their sale, will it be first come first serve, etc.

2. Be prepared for anything: Even armed with this information, everything will not go exactly according as planned. Get there a little early, scope out the new rules, and grab a number if available.

3. Be patient: Make sure you bring your stamina because you’ll need it. It took 2-2.5 hours for most people to get through the contract process.

Brand new Waihonua Condominium promises new infusion of real estate breath in the Honolululu-Kakaako area; new things are on the horizon.

If you would like to take a look, or have any questions regarding Waihonua, please call Caron at 808.753.7464.

Related posts:

1. Waihonua – Changing Kakaako’s Skyline
2. Talk Story #32 – New High Rise (Waihonua) Offered in Kaka’ako Has Eager Buyers
3. If You Think Kakaako is a Happening Place Now, There’s More to Come

Choice Excerpts

• Average age of vacation home buyers is 49.
• Mark Zandi, chief economist with Moody’s Analytics, predicts that housing prices will drop another 5% this year before hitting bottom at year’s end.
• Nearly 40% of vacation home buyers paid cash in 2010.
• “This is the greatest time ever for the cash buyer,” crows real estate attorney Adam Leitman Bailey…”My clients figure they’re not making money in the bond market. They don’t trust the stock market, and the interest is so low on their bank accounts it’s not worth keeping cash there, so they are floating money into real estate.”

Looking for the a vacation rental on Maui? Here’s a condo at Kihei Sands (MLS# 350211), a beachfront best buy with an ocean view and solid rental history.

Related posts:

1. Buying a Vacation Home in Kauai, and Subsidize Your Mortgage by Vacation Renting
2. Lahaina Shores Condo Sold on Maui – Buyer Testimonial
3. Huge Differences in Comparably Priced Maui Vacation Rental Condos

The first property auction sponsored by Hawaii Life is less than a week away. In between showing my auction listing and answering questions about it and other auctions properties for prospective buyers, I seem to find myself spending a lot of time explaining how the auction works.

An auction is not the most familiar purchase method for real estate buyers; an auction is also a relatively new concept for most real estate agents. Here is my attempt to make “how to bid at the Hawaii Property Auction” simple to understand.

Practice the Auction Process With Places Like eBay

A good place to start might be with eBay—you could even practice as a warm-up to bidding on a property! Look at this auction of Old Hawaiian Tiki Coasters that is set to expire at roughly the same time our auction of Hawaiian real estate takes place:

Old Hawaiian TIKI COASTER (c) 1999 Accoutrements Orig Package Recycled Paper Current price: $9.99 Buy It Now price: $11.99 End time: 11-26-11 15:48:24 PST

Note that eBay has evolved from a pure auction-style marketplace to have several styles of buying and selling. You have some sellers listing only at “buy it now” fixed prices and you have some sellers listing at absolute auction…which means that any bid price will take the item when the auction closes.

Then, you have our Tiki Coasters, which are offered as an auction item…with a starting bid price of $9.99 and a reserve price of $11.99, roughly 20% higher than the opening bid price. This seller will also allow you to make a preemptive bid at his reserve price, which he has disclosed.

This seller also says “FREE shipping and handling.” Of course, shipping and handling isn’t FREE…pretty sure the seller has to buy packaging and pay USPS or UPS to deliver the item, but in this case, the seller’s costs are pretty high compared with the cost of the item, so he’s chosen to price it into the listed price of the item rather than tell the buyer they have to pay 50% S&H on top of an $8 item.

29 ocean view acres plus new Hawai’ian style cottage. Opening Bid: $775,000 (MLS# 241049)

Understanding The Auction Format

Let’s take those concepts back to our Hawaii property auction to explain why the auction format confuses us as real estate agents and buyers. In a regular MLS listing, it’s like the Tiki Coaster Seller offering FREE shipping and handling. We all know the seller has to pay a commission to their agent, probably 6%, conveyance tax, and a few other closing costs. It is not of direct concern to us as buyers because that was true of all the comparable sales we’ll review as we decide what the property is worth. It’s “FREE shipping and handling” in other words.

The “shipping and handling” is transparent in the upcoming real estate auction, however. As the winning buyer, you add 8% to your winning bid price to determine your total purchase price for the property. When you are figuring out the top price you’re willing to bid, remember the comparables relate to the total purchase price including the 8% auction premium.

Oceanfront home on 1.7 acres. Opening bid: $850,000 (MLS# 245061)

Opening Bid Price Versus Reserve Price

Now let’s take on the second confusing concept: opening bid price versus reserve price. Normally, when you see a property priced at $8 (mentally add 5 zeros) in the MLS, you figure in today’s market you can offer 10-15-20% less. I believe that confusion is why we’re getting in bids less than the MLS listed price/opening bid price in advance of the auction, but if you look at eBay, there is literally no way to enter a bid amount that is less than the $9.99 opening bid (or current bid if the item already has other bids on it).

With prospective buyers who understand this, the question I get asked most often is, “Do you think there’s any chance that Kohala Waterfront lot will sell for close to the $100,000 opening price?” When I laugh and say no, the next question will be, “How do I figure out what the reserve price is going to be?” Let’s just say it might be the same or less than the net the seller would have accepted if we’d kept the regular listing in the MLS.

Kohala Waterfront gated community has 3 lots in the auction. Opening bid: from $100,000 (MLS# 248580)

It is rare that a seller really knows what their bottom line is until the offer is on the table…and that might end up being true with this auction as well. In other words, for a seller, a well-attended auction is a great way to get information: what the market thinks your property is worth. For a well-prepared buyer, it is a chance to get lucky.

If you’re still confused, but are interested in one of the auction properties, remember that your buyer premium is the same whether or not you use an agent to assist and represent you in the auction. And…you can register at the door. For more details, or to download registration forms, click on the link: Hawaii Life Auction Process.

See you on Saturday, November 26th!

Beth Thoma Robinson, R(B)
Direct: 808.443.4588  
Email: beth@hawaiilife.com

Related posts:

1. Hawaii Residential Real Estate Auction Tips
2. First Hawaii Life Auction Property Closes Escrow
3. Hawaii Property Auction November 26th – Terms & Conditions

Shortly after writing that both REO (foreclosure) homes at beachfront Kolea were in escrow, I had a conversation with an agent looking for an oceanfront foreclosure situation at Hali’i Kai, the other luxury condo complex at Waikoloa Beach Resort.

Her buyers were hungry for oceanfront and she was insisting she had on good authority that there were new REOs coming on in Buildings 13 and 15…which are two of the three oceanfront buildings at Hali’i Kai. Since Pam Deery and I dominate in Hali’i Kai oceanfront listings and sales, we have a good sense of the inventory, and I could not think of a single oceanfront owner in distress.

It wasn’t until our second conversation that the light bulb went off in my head. The new REOs will not be at Hali’i Kai; I’ve been waiting and watching for a very long time for two bank-owned Kolea properties to finally appear on the market…and they happen to be in Kolea buildings 13 and 15!

Kolea owners have a small amenity area with a private path to the beach

I won’t tell you exactly which units they are, but here’s the scoop:

Remember, there are two sets of buildings at Kolea. The front row are six-plex, which means larger, 3-bedroom villas with all of them being outside units and all having garages. Behind those are twelve-plex buildings, mostly 2-bedroom floor plans and carports rather than garages.

The upcoming REO in Kolea Building 15 is an example of an inside, two-bedroom, 1,270 sq. ft. plus lanai. Recent sales of that floor plan have been mostly REO and short sale. The lowest sale of a comparable floor plan in 2010 bottomed out at $367,500; this year, a ground floor, inside, 2-bedroom sold once as a short sale for $425,000 and was resold two months later for $479,000 (remember my blog post on flipping?).

The large 3-bedroom Kolea villas have pocket doors for indoor-outdoor living like short sale 10E (MLS# 241405)

The upcoming REO in Kolea Building 13 completed foreclosure and became bank-owned at the beginning of this year. It is an example of the largest of the Kolea floor plans at 2,147 sq. ft. plus lanai. Again, trying to predict where the selling bank will choose to list it leaves me with the sense I’m walking into a casino.

A second-floor, non-distress sale, vacant, and never occupied unit sold for $1,425,000 in August of this year. The same floor plan is offered as a short sale in Building 8 for $1,299,000 with no offers…and over in Building 3 is a short sale at $899,000.

If you are serious about taking a shot at one of these two Kolea foreclosure opportunities, here’s what you need to do:

• Choose an agent to be your buyer’s representative. You want someone to call you the moment it hits the MLS. I recommend signing a Buyers Representation Agreement if you really want to be their first call!
• Get pre-qualified if you will be financing; have your proof-of-funds ready to send if you will be an all-cash buyer.
• Ask your agent to discuss the comps with you, so you know what your top price will be. In recent REO and short sale releases, we’ve seen bidding wars; you may or may not be given the opportunity to resubmit a “highest and best offer” if there are multiple offers on the table.
• REOs are sold “As Is.” These have been vacant for a while, so figure into your budget some deferred maintenance as well as furnishings.
• Banks like to see clean offers. An agent who has sold at Kolea previously should be able to provide you with condo docs, so you can study them in advance. An agent who has helped clients with REOs will walk you through how to write an offer that has a chance of easy acceptance.

Good luck!

A hui hou,
Beth Thoma Robinson, R(B)
Direct: 808.443.4588    
Email: Beth@HawaiiLife.com

Related posts:

1. Update on Kolea Condo Foreclosures and Short Sales
2. Will the New Kolea Foreclosure Affect the Kolea Auction?
3. Beachfront Kolea Market Update – July, 2011 (Big Island)

That is the excruciating question many homeowners ask themselves these days as they struggle to fight against shooting adjustable arm mortgages borrowed during the sub-prime era. When I was growing up, the “B” word was taboo and people who filed bankruptcy were looked down upon. 

How about those pay option arms? The key is paying interest only. If you have been paying just the minimum all these years and nothing to your principal or interest, your negative amortization continues to mount, but with no extra money and resources, how can you pay? Contact a loan officer to see if you qualify for President Obama’s debt relief mortgage program called HARP just released in November.

Bankruptcy Serves as a Surgical Tool to End Financial Bleeding

After being involved in one of the most intriguing conversations on finance, Bankruptcy Attorney, Rick Abelmann, shed some light on the subject. He believes that bankruptcy is designed as a financial surgical tool that is aimed at giving second chances to those who are bleeding from a cancerous illness. I have seen that illness snowball into bills piling sky high and homes taken right from under people by mortgage lien holders. Meantime, their interest rates continue to rise due to late payments and their inability to pay creditors. If you are at this point, seek professional help and relief.

Abelmann talked numbers and chapters with me that we only hear about in the daily news, such as 7, 11, 13, and 20. What I got out of the enlightening financial session is that contrary to what I was taught as a child, bankruptcy is aimed at helping those who can no longer help themselves, providing they have gone through all their ethical and moral obligations.

Personal Bankruptcy is equivalent to major surgery. You don’t want to go under the knife for open heart surgery if you are only suffering from heartburn. In other words, don’t file for bankruptcy unless you have been diagnosed with a deadly financial disease that is affecting your relationships, self-esteem, ability to fight foreclosure proceedings, about to lose your home due to an acceleration clause on your note, or you no longer have food or money and you are now in survival mode.

So many in this market take advantage by running up their credit bills knowing that they can clean things up with a bankruptcy. But, there are also those who are suffering legitimately with upside mortgages after years of diligence and dedication to their work places. The world economy is out of your control and you are not to blame.

How Do You Know if and When it is Right to File Bankruptcy? Is it Ethical to Do So?

I once had a co-anchor at KGMB-9 News tell me that people who file for bankruptcy are unethical. I agree that some financial or real estate gurus who take advantage of this financial management tool have abused the system because they deliberately run up their bills before going bankrupt, but there are genuine hard-working people who have lost their jobs, families, or are undergoing serious illnesses, therefore, they are down on their luck. Others have gone through ALL their hard-earned savings, can’t find work and are truly destitute.

Personal bankruptcy is known as the debt management tool of last resort, it may be the only thing to do after you have depleted your finances and resources. However, if you decide bankruptcy is the way to go, you should do things properly and be educated on the subject. The following links may help you do just that.

Helpful Links When Filing For Bankruptcy

• Hib.uscourts.gov: Here you will find bankruptcy forms, local rules, and district guidelines, opinions, and reference materials. You can browse the internet and look for bankruptcy attorneys. However, through my research, I found that this firm had no hidden fees and takes the time to explain the different chapters for FREE. His clients say there are no hidden costs either when they decided to file. The most reasonable fees that I have heard of.
• TotalBankruptcy.com: This Website explains Chapter 13 and how to prevent foreclosure, and helps those who are behind on payments.
• ConsumerAffairs.com: Consumer Affairs has a great article on the pros and cons of bankruptcy.
• Greenpath.com and Abacuscc.com: are websites you can go to for online credit counseling. Before filing, you need to present your attorney with a credit counseling certificate.

If all else fails, you may need a Realtor to help you short sale your home. Sometimes, the banks take years before they foreclose on a home, and you may need a good attorney to negotiate a prepayment plan and an experienced short sale Realtor to assist in selling your home.

Contact me if you need a free analysis of your home, I would be happy to help.

Related posts:

1. Tips for Lowering Your Debt and Fixing Your Debt Woes
2. How Bankruptcy Affects the Foreclosure Process in Hawaii
3. Applying For A Hawaii Home Loan

Well, now we all know what happened, and this time it wasn’t necessarily “corporate greed,” it was the best educated guess reflecting market sales of the time and what the location seemed to produce.

What actually happens when a house hits the market and is overpriced?

You may end up, years later, selling it for a fraction of the cost you paid to build it. I hate it when that happens. All of us are programmed to want to make a profit in real estate. Yes, if possible, let’s try to do it, however, the reality is more about timing.

Tips on Selling Your Hawaii Home

1. Real estate is all about timing—the best time to buy and the best time to sell—and it takes a lot to convince someone to take a loss. The bravest sellers out there can swallow that pill and move on. It doesn’t mean the time won’t come around again for the diligent investor, who may be facing the issue that they missed the best time to sell.

2. Most sellers should get a licensed appraisal. The seller in this market is really killed by low comps, even if they have great land value and high-end construction integrity. By and large, right now, the beautiful product they worked hard to build cannot simply be replaced for the price most of them have had to reduce their homes to.

3. Good pricing drives showings and the more exposure, the more chances a buyer will recognize the value and engage in contract. If you want to check out a once “overpriced custom house” that is now a steal (and I am not kidding), check out this property (MLS# 249232) for the always desirable “location” and now price.

Conclusion

As a seller’s agent, I want to get the most for the seller in this market. This is the “buyer’s” marketplace and sellers are extracting their last breaths while they tighten their proverbial belt. It is tricky though…how can you generate showings if you are not perceived as a value? It’s no activity at all that hurts. What about “missing the market?” Well, chances are if you are in this market trying to sell, you missed it (like I did), and the market is just not that predictable.

There is good news in the end for buyers; despite the high “old prices,” some sellers just have come to the Maverick decision to price the house within the top four houses most likely to sell within the next month. What a concept! We are not talking about making the most profit anymore, but instead focusing on the goal of the sale.

I am an Accredited Buyer Representative who works in the Waimea, Honokaa, Kohala and Waikoloa marketplace on the Big Island of Hawaii. I can help you sort through the inventory and help you pick the best value, or help you find the pricing that will bring buyers to your door if you are a motivated seller. Call me for an appointment.

Diane Chavez
808.987.8294    
diane@hawaiilife.com

Related posts:

1. Seller Savvy – First Impressions Count in Selling Your Home
2. Tips for the Hawaii Real Estate Seller
3. Property Sellers in Hawaii Still Under Pressure In Buyer’s Market

1. Determine How Much You Can Afford To Spend: Searching for a property can be fun and exciting when you think about getting a new place and maybe remodeling. However, before you get too carried away, it is vitally important to do the numbers first. There is no need to spend time looking at property that is not within your price range. Talk to a lender and find out financially what you pre-qualify for. This gives you a ballpark price range to work with during your real estate search.

2. Find a Location That’s Right for You: One of your most important decisions is…location, location, location! There are many factors to take into consideration when making this decision, so spend some time, do some research, and think it through. Also, make sure to get familiar with the neighborhoods and towns you are considering. One final note on this: any home can be remodeled, or even torn down and rebuilt, but location is not easily changed.

3.  Get a CMA (Comparative Market Analysis): Once you have zeroed in on a property, it’s time to have your Realtor do a CMA. By understanding how a home compares to recently sold property in the surrounding area you will be able to come to a conclusion on what to offer. Learn more about using CMA’s to find good deals in Hawaii.

If you have thought about purchasing property in Hawaii and would like a CMA, I am happy to help.

Kelly A. Lee, (R) e-PRO, CHMS
kelly.lee@hawaiilife.com
(808)-225-0349

Related posts:

1. Hawaii Home Foreclosures – Making the Offer, Part 3
2. Hawaii Ocean View Homes – Protecting Your House From The Sun
3. Time to Flip that House in Hawaii?

Relocating to beautiful Kauai is both exciting and challenging! One question I’m always asked is, “what do I need to bring that I can’t buy on Kauai?” There is only one answer that I give and that is, “if you can’t buy it on Kauai, you don’t need it.” Life is much simpler here and you will find you need a lot less than you think!

Once you have decided to move, it will help save you time and frustration if you begin early making all the necessary preparations—particularly important if you are planning to move to Kauai with a pet. Hawaii has strict guidelines on the types of animals that are allowed (not all are) and the quarantine requirements for relocating pets.

Pet Quarantines

In 2006, the Kauai Humane Society was awarded the contract with the State Department of Agriculture to provide receiving, inspection, and release services at Lihue Airport for pets arriving from the mainland.

Now, you can fly direct into Lihue and not have to travel through Honolulu when bringing your pets with you. It does, of course, require that you do all your homework beforehand in order to qualify your pet for the state rabies quarantine requirements. You may view these in detail here.

If you are planning to build or remodel your Kauai property, here are the things you will need to know about the County of Kauai Permit Process:

Obtaining building permits for a home on Kauai may take you to 6 county departments and one state agency. Here are the phone numbers for each, in case you need to reach them for more information:

1. County of Kauai Building Division at Dept. of Public Works: (808)-241-4854. In most cases, the building department controls actual construction issues such as framing, electrical, plumbing, heating, and ventilation.
2. County of Kauai Planning Department: (808)-241-4050. In most cases, the planning department manages zoning: minimum lot size, how much of the lot can be covered by a building, whether dwellings can be single or multi-family, clearances between the building and the street, side yards and rear yard, etc.
3. County of Kauai Department of Water: (808)-245-5400.
4. County of Kauai Engineering Division, Dept. of Public Works: (808)-241-4883. In most cases, the engineering department takes care of things like streets and roads, flood zones, sidewalk and curb and gutter, storm drainage, lot drainage, and other lot and street issues.
5. County of Kauai Division of Waste Water Management, Dept. of Public Works: (808)-241-6610.
6. County of Kauai Fire Department: (808)-241-4980.
7. State of Hawaii Environmental Health Services, Dept. of Health: (808)-241-3323.

(Source: Kauai Data Book, H&S Publishing, LLC. 1995-2003. Carey, M. and J. “Getting a building permit—a scary proposition?” The Garden Island, May 15, 2005.)

Once you arrive on Kauai, I’ve made a list of the phone numbers that you will find helpful. Tuck this list away as it will save you time locating all of these.

Turning on your Utilities:

• Cable/Satelite Services: Oceanic Time Warner Cable (808)-643-2100
• Cell Phone Carriers: We have many, so you have choices!
• Electric: Kauai Island Utilities Coop (808)-246-4300
• Gas: The Gas Company (808)-245-3301
• Telephone Land Line: Hawaiian Telcom (808)-643-3456
• County Water: Department of Water (808)-245-5430
• Princeville Water: Princeville Utilities (808)-826-3040

Other State and County Services that you may need:

• Bus Services: The County Kauai Bus (808)-241-6410
• Hawaii Drivers License: County Driver’s License Office (808)-241-4242
• Kauai County: County Offices (808)-241-4903
• Marriage Licenses:  (808)-241-3498
• Newspaper: Garden Island News (808)-245-3681
• Passport Services: (877)-487-2778
• Pet Registration: Pet License Tags (808)-332-7315
• Social Security Office: (800)-772-1212
• State of Hawaii: Government Offices (808)-586-2211
• SunShine Markets: Market Days and Places (808)-241-4946
• Vehicle Registration: County Vehicle Registration (808)-241-6577
• Visitor Information: Kauai Visitors Bureau (800)-262-1400
• Voter Registration: (808)-241-6350

You have chosen one of the most beautiful places in the world to call home. My sister and I work as a team committed to helping our clients with their real estate needs. Should you have questions or need assistance, you can reach Ilona at (808)-635-1495 or Lucy at (808)-651-5676. We look forward to helping when you need real estate services.

Aloha and Welcome to Kauai! 

Related posts:

1. Buy a Home on Kauai Now or Wait?
2. Relocating Your Pet to Kauai
3. New West Hawaii County Offices Have New Phone Numbers

Not all short sales close, and the ones that do close can be frustrating experiences. You need to know up front, that at most times, you will have no control, and the bank will have all control. The bank will dictate rules for you to follow, and then do whatever it so pleases whenever it pleases.

If you have to have a home in a specific time, DO NOT do a short sale. There is no way to tell when you will close on a short sale. Some loans require a home be in good condition and many short sale homes don’t pass the test, but there are some great deals to be found in short sales. Most of my business today is either short sales or REOs (the bank owned properties after foreclosures) and I have learned how to negotiate with the banks throughout the entire process. You just have to know it’s really the bank’s game and be willing to play in their ballpark.

A short sale happens when a sale price is not enough to pay off a mortgage and the seller is in financial hardship and can’t make up the difference. This sale would be short of paying off the mortgage and is called a short sale.

A short sale is anything BUT short when it comes to the time it takes to close one. When it comes to the time to close on a short sale, they should actually be called a long sale…or maybe even an endurance sale! You need patience and you also need to know that not all short sales close successfully. Knowing the steps in a short sale and understanding how they work will help you on the road to closing on a short sale.

Here are the steps in a short sale:

1.  Meet with a lender first—you usually need to submit a pre-qual or pre-approval letter with your offer. If paying cash, you will need to submit proof of funds, so have that ready.
2.  In viewing properties, don’t exclude homes that aren’t distressed properties. Sometimes, the best deals are found with a seller that has equity in the property and is motivated to sell. The closing process is way easier also.
3. But, if you are going for a short sale, remember that you will be taking this property “as is” and if you are getting a loan, it must be able to qualify for the loan. Some homes will only be able to be bought with cash. Finally, some homes are stripped of appliances, so you may need a budget for replacing these.
4. When you have found a property, consult with your agent and make your best offer first. A good agent will talk with the listing agent and find out details on the seller (taxes due, liens) before writing the offer. The offer will first go to the seller, who will usually accept the offer unless it seems impossible for the bank to accept. After the seller accepts the offer, the contract goes to the bank.
5. Now the wait begins. Your agent should pull up a title report at this time to see what liens and taxes are pending as you will be responsible for these. If it is a condo, you will also need to know about any HOA’s due. Bank response time can be one week to several months. When you do hear from the bank, you may get an email from the listing agent saying the bank would like to counter your offer, or may even say they are accepting it. Don’t get too excited yet. Until you have the bank’s written approval letter, you have nothing. I had one short sale where the bank countered my buyers in emails twice after they had accepted each previous counter, and if the seller has a 2nd lein holder, you will have to wait for approval from that bank also.
6. Banks written approval starts the clock on closing. Usually, you have 30 days to close and your contract has all dates referenced to the bank approval date. Now you need your loan approval to FLY! Please don’t try this with a mainland lender. This is the time for a local lender.
7. Even though you are buying as is, now that you have approval, you will want to do a home inspection, termite inspection, document review, and maybe staking/survey. These will all be at your cost and need to be done quickly. You do have these in your contract as contingencies to cancel if you find something of concern.
8. You will receive from the seller a standard Hawaii seller’s disclosure statement detailing any known problems with the property. This is one major advantage of buying a short sale vs. a REO because a bank does not provide a disclosure to you.
9. When it is time to sign your closing documents, you will receive a HUD 1 that will show any payments you pay that the seller was behind on or other liens. You should have seen all of these previously in the title report. This is the one major area of buying a short sale that you need to consider.
10. Now it’s time for the seller to sign off on seller paperwork. Sometimes, the bank will ask the seller to pay in and the seller will refuse, or be unable to pay, and the sale ends there.
11. If all goes well after signing, the sale will record. What could go wrong at this point? Believe it or not, there have been stories of large banks foreclosing on homes just prior to them closing on a short sale. One department not knowing what the other was doing. But, you have played the bank’s game …and you are a winner! Congratulations on the successful closing on your short sale! When’s the housewarming party?

I love the Big Island! Aloha.

Related posts:

1. The HAFA Short Sale Advantage in Hawaii
2. Negotiations to Remove Deficiencies on Hawaii Short Sales
3. Avoid Delay in Short Sales By Understanding Multiple Offers

This is a continuation on my blog series on selecting a buyer’s agent and purchasing Hawaii real estate. Many times, people start their search for a home before they know if they can buy a home, or how much house they can afford. It is important to know what you want and how to get it. 

Life is too short to waste time going down a path that leads nowhere. If you set the path, or have your agent help set up the path, you are much more likely to get where you want to go. We went over these questions on my last blogs on the subject.

Here are the links to my previous blogs on this subject, part 1 and 2:

• Why Should I Use a Hawaii Buyer’s Agent?
• Why Should I Use a Hawaii Buyer’s Agent? – Part 2

These are the rest of the questions and answers:

• How do I navigate through the process with inspectors, escrow, agents, loan officers, appraisers, and all the other professionals involved in the transaction?
• What is HUD and why do I hear people talk about that?
• What kind of fees will I have to pay?
• What are the differences between escrow fees and loan fees?
• Why do I have to pay these fees?
• How much down payment do I need?
• Who do I talk to about all this stuff?

8. How do I navigate through the process with inspectors, escrow, agents, loan officers, appraisers, and all the other professionals involved in the transaction?

The best way to navigate the process is to have a buyer’s agent assist you in the entire process from finding the property, getting pre-qualified, and finding the necessary inspectors to closing. An agent can help you keep it all on schedule since this is what they do everyday, all day.

9. What is HUD and why do I hear people talk about that?

The HUD statement is a closing statement that is given to both buyer and seller at closing, which reveals in detail what the costs are associated with purchasing property. This document must be prepared and provided to all buyers and sellers of Hawaii real estate. This document helps protect consumers from any “hidden fees,” or surprising costs at the closing table.  

Your real estate agent should get a copy of this report as well, so that he or she can make sure that it is compliant with the purchase contract. The HUD is created by the settlement company (Title and Escrow) involved in the transaction. Make sure you keep a copy of this form for your tax preparer at the end of the year.

10. What kind of fees will I have to pay?  

There are many fees that need to be paid during and at the closing table of a real estate purchase. You don’t want to be blindsided by a request for thousands of dollars for closing costs. You can use a mortgage payment calculator to give you an estimate of the loan payment, but the loan payment is only what you pay after closing and usually does not include all the fees that you will be responsible for. Here is just a partial list and you can ask your agent or loan officer to see a sample HUD, which can show what to expect.

Points: you hear 4% and 2 points. The 2 points are fees for the loan expected to be paid at closing and each point is one percentage point. $100,000 mortgage—2 points is $2,000. Appraisals, property inspection, taxes, transfer fees, insurance, escrow fees, attorney’s fees, settlement fees, prorated association or maintenance fees, the list goes on. Be sure that prior to starting your home search, you have an estimated idea of how much money you will need to bring to the closing table. It is best to have this all figured before you start your search for a home.

11. What are the differences between escrow fees and loan fees?

There are 3 professionals that work with you from the beginning of your search until the keys are in your hands. There are many other professionals that advise and assist along the way, but these three are there every hour of everyday of your home buying journey:

1. Your real estate agent who helps you locate the home, negotiate purchase contract and contingencies, manages the process, and assists in analyzing the property and terms.
2. Your loan officer who will pre-qualify you for a loan, take your application, and assist in getting the money needed for the purchase.
3. Your escrow officer will hold deposits and monitors compliance by both buyer and seller in adhering to the agreed upon written contract.

Numbers 2 & 3 are two separate entities with two separate jobs, so they each have their own fees for services. They will gladly give you an estimate for those fees once they know which property you will be pursuing.

12. Why do I have to pay these fees?

The plain truth is that in a real estate transaction, there are often dozens of people who handle each part of one real estate transaction. There are many reasons for these fees, but plainly, it is for profit and salary. Everyone who has a hand in your transaction has a family and earns a living by being a part of the real estate transaction. Each company has a responsibility to their owners or shareholders to provide a service and earn a profit.

These are professionals that often deal with hundreds of transactions a year and this is how they earn a living and provide a service. Buying a home is complex and involved. There are many facets of the transfer of property. At closing, as a buyer, you are usually looking at a cost of 3%-4% of the sales price as your costs associated with having all these people contribute to the successful purchase of your investment.

13. How much down payment do I need?  

This is an excellent question when buying a home. It would be heartbreaking to search for a house, find the house, and then find out that you do not have enough money to get it. This is why it is important to talk to a loan officer prior to starting your search. Sure, you can browse for houses, but if you really want to start on that road to home ownership, you want to know how much money you need and how much house you can afford.  

Although, the easy 100% financing loans for anyone with a pulse are a thing of the past, it is likely that you will need to have some money saved up for a down payment. There are exceptions to the 20% down standard. There are USDA loans, VA loans, and several others that fit into a program that may allow low to no money down. Your Realtor or loan officer can help you find out which loan and property best fits your current situation, both financially and with your housing needs in mind.

14. Who do I talk to about all this stuff?

That one is easy. Call your Realtor. They will guide you through the entire process and assist you from beginning to end. If you do not have a Realtor, I can assist you on the island of Oahu. If you need an agent on another island—I know some very good ones on every island. Call or email me and I will point you in the right direction.

Those are the most common questions we get when a client is starting their search for a home. The process of buying a home is completely different for everyone, but the tools and professionals are available to assist you.

To ask me your real estate questions, email me. To continue browsing for Hawaii Real Estate, click here.

Kelly A. Lee, (R) e-PRO, CHMS
Realtor-Broker
Hawaii Life Real Estate
4614 Kilauea Avenue, Ste. 206
Honolulu, HI. 96816
Phone: 808-225-0349
Fax: 866-590-3144
www.hawaiilife.com

Related posts:

1. Why Should I Use a Hawaii Buyer’s Agent? – Part 2
2. Why Should I Use a Hawaii Buyer’s Agent?
3. Hawaii Real Estate Buyer Tips