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MLS Listing Descriptions – A Super Grain of Salt

February 3, 2013 by Michael Borger

We Buy Houses in Hawaii

Reminder: If you need to sell your Hawaii house for cash, then know that Oahu Home Buyers buys houses for cash in Hawaii statewide – condo or house, talk to us today. Visit the link above or call 808-333-3677.

Now to the blog post….

My Real Estate Listing, My Choice

I noticed something last week as I was helping teach a FortuneBuilders class for new real estate investors who want to get into flipping houses in Hawaii. We were running some comps on recent MLS listings and sold single family houses on Oahu. We went over all the basic info that both homeowners and real estate agents use when running comps, such as:

  • Size of the house (living sqft)
  • Lot size (sqft)
  • # of bedrooms / bathrooms
  • Sold date
  • Proximity to target property
  • Condition

Of course, there are other factors, but these are commonly considered the most important ones when calculating the value of a house. I remember one property in particular — I believe it was in Kaneohe or Kailua — with the condition noted as “Above Average“. For those who aren’t aware, there are predefined categories of house condition from Excellent to Tear Down from which the listing agent is supposed to choose and assign to her listing. This “Above Average” house had a kitchen that needed at least $15,000 in renovations — unless you think red is all the rage and the 1970s are about to make a comeback and take over Better Homes and Garden magazine.

The room had a laugh but it brings up an important point — so much of real estate is subjective, from home value to the actual information on an MLS listing, ex. condition and agent remarks. Sometimes you really need to take it all with a super grain of salt.

Now, in my experience, most condition category choices are usually on the mark, but there’s a lot of liberty one can take when choosing between “Above Average” and simply “Average”. I’ve seen some homes listed as Above Average that were, in my opinion, well deserving of an Excellent rating.

What is Above Average?

After all, what does “Above Average” mean? It ought to mean better than most of the homes on the market, but instead it’s commonly used to refer to any house that’s been recently modeled or needs few, if any, further upgrades. Sometimes these definitions match up, but not always and that’s where one can be misled.

I’ve learned to take the extra step when running comps to look at all the photos (knowing that itself doesn’t beat visiting the house) instead of just scanning the stat sheet for the condition label. I go back to the red kitchen — without looking at the photos I would have assumed, via the Above Average label, it to be a recently upgraded or built home. Instead, the photos clearly indicate some money’s going to have to be sunk in the property to bring it up to modern Hawaii housing market condition (unless it’s going to be featured in the next Austin Powers flick).

So take it from me — nothing beats doing plenty of homework and legwork before buying a house in Hawaii or anywhere else. Seeing with your own two eyes and trusting your own instinct and inner judgment are the best methods for both making your home search efficient and, ultimately, successful.

Filed Under: Buying & Selling Tagged With: comparative market analysis, Hawaii real estate, MLS

NEW Short Sale Guidelines in Effect TODAY

November 1, 2012 by Michael Borger

Do you need a short sale but don’t think you’re eligible? THINK AGAIN! Starting today, November 1 2012, NEW guidelines go into effect to allow homeowners to start a short sale — even if they’re current on their mortgage!

The traditional criteria for short sale included a hardship and having missed a certain number of mortgage payments. This is not unknown to Hawaii. Well before the 2011 moratorium on non-judicial foreclosures, Hawaii was ranked 11th in the state in foreclosure rates. No doubt this is welcome news for many underwater homeowners here in the islands.

Now, let’s be clear as to new guidelines. After all, you still need to qualify. This is not a free pass for anyone to rocket a short sale through the system and come out the other side all sayonara, never to be seen again.

NEW Short Sale Guidelines

1. This is ONLY for Fannie Mae and Freddie Mac issued loans. If you’re not sure, talk to your mortgage servicer. This will constitute a large percentage of borrowers, but I wanted to make sure you understood this first and foremost. Fannie and Freddie only.

2. You still must have an eligible hardship. Just because your payments are high isn’t going to cut if if you have the income to still comfortably make the payments. However, “eligible hardship” is a loosely-defined term. You might be able to…uh…. get creative on this one. Death, divorce, etc. If you have to relocate 50 miles away for work, you’re in like Flynn.

3. Reduced paperwork. Short sale realtors rejoice.

4. Fannie and Freddie will, in some cases, waive deficiency judgments in lieu of a cash contribution at closing or promissory note. Case by case basis.

5. If you’re in our military (salute, salute) and get a Permanent Change of Station (PCS), this works for you.

6. Up to $6,000 to cover junior lienholders (second mortgages). Believe me, this is huge for some of the short sales I’ve seen here in Hawaii. Your junior lienholder can be a real stick in the mud and completely sabotage your short sale if they don’t want to play ball. This helps feed them a bit at closing.

Click here for the official guideline document.

If YOU need a short sale on your property, then I want to earn the opportunity to help you. When you sell your house as a short sale, you’ll need a buyer. Guess what? That’s me. Let me put one of my top realtors on it (the bank will pay your realtor and closing costs) and let’s get this done to help you move forward.

Just CLICK HERE to get started on your FREE short sale.

Filed Under: Buying & Selling, Foreclosures Tagged With: short sales

Top 5 Criteria to Choosing the Right Real Estate Agent

July 9, 2012 by Michael Borger

How to Choose a Good Realtor

Even in today’s version of the real estate industry of FSBOs and technology out the wazoo, most home sales and purchases are done the traditional way — by utilizing the services of a licensed real estate agent. Is it necessary or legally required to use a realtor to buy or sell a house in Hawaii? No, you can sell your house on your own (FSBO) or you can sell direct if you wanted to avoid paying 3-6% commissions and/or potentially lengthy listing times.

However, most people who buy and sell aren’t ‘motivated’ beyond normal levels or in a hurry to close a transaction. These folks generally operate in the retail pricing space and are content to act accordingly. This usually means working with an agent as their representation.

Let’s look at the Top 5 Reasons Why a Homebuyer or Seller Would Opt to Use a Realtor:

  1. Access to listed properties and historical data on MLS
  2. Familiarity with local contracts and other paperwork
  3. Familiarity with local specific housing or industry knowledge and trends
  4. Leveraging an agent’s time, mobility and other resources to maximize buying/selling efficiency
  5. Having someone else negotiate your purchase or sale

These are all solid reasons why using an agent might serve you well. Let’s now dig deeper…

Top 5 Criteria to Choosing the RIGHT Agent

James Bond agent

Not this type of agent....

It’s not just enough to decide that you want realtor representation. If you weren’t aware, there is no shortage of licensed agents in Hawaii, no matter which island you reside on. In fact, you probably walk by a dozen licensed agents everyday just going about your business. The young 20-something girl sitting next to you at the bus stop? Agent. The chatty guy at Starbucks ordering up a green tea latte? Agent. However, this is not to say they’re all the same.

Here’s a quick list of criteria to look for when choosing which real estate agent to hire. This is not a complete list but covers most of the big ticket items:

  1. Profession vs. Hobby. Some agents make their entire living helping others buy or sell real estate, while others use it as a supplemental source of income. Either is fine and respectable, but you’ll of course be dealing with different levels of experience. Speaking of which….
  2. Experience. Experience is important, HOWEVER it is not everything. Too much experience could actually make an agent complacent or unwilling to embrace new trends and/or technologies. Experience is great as long as it doesn’t also mean one has a closed mind (this goes for any profession).
  3. Get Geeky. There’s no way around it — technology rules the day. Can your potential agent pull up listings on their smartphone? Have documents ready to sign in the field on their new iPad? Pocket protectors aren’t required, but staying ahead of the tech curve today is a fantastic way for agents to set themselves apart from the crowd — and to provide you added value.
  4. Telling It Like It Is. How many times have you seen a house listed for sale $50,000 or even more above what you know its market value to be? Then you watch as week by week the list price is reduced until, incredibly enough (insert sarcasm), the price is dropped to market value and gets sold. Rocket science, I tell ya. Who on earth does this help? Certainly not the seller. But unless the inflated asking price was requested by the seller (which happens), then it just seems like a ploy to garner a higher commission. Don’t fall for that trap. Ask the tough questions and get someone who will tell you directly what your home is really worth.
  5. Like Me. This may sound trivial, but you should actually like the person you’re working with. After all, if you’re shopping for a new home, then you’re going to be seeing a lot of your agent, may even being driven around island. If you’re selling your house, then plan on communicating frequently with this person. You don’t need to share milk and cookies at the end of the day, but if you don’t like the realtor you hired — and no one likes everyone — then, believe me, it will just sour the entire experience.

There you have it. Have your own thoughts on the subject? Share below!

Filed Under: Buying & Selling, Hawaii Tagged With: broker, realtor

So Much for Facebook…

June 4, 2012 by Michael Borger

Mark Zuckerberg

Sad Mark Zuckerberg...

For those looking for an investing shot in the arm, the Facebook IPO wasn’t quite the financial rocketship it was billed to be. Many people lost money within minutes of the opening bell. In fact, it’s already considered one of the biggest duds in the history of the stock market. Not quite the press it wanted – sorry, Mark Zuckerberg!

That being said, what’s an honest investor to do when the market itself has become no better than a weekend trip to Las Vegas and betting it all on 28 black? Well, I’m no fan of the stock market for many reasons (no equity, no collateral, no insurance, to name a few). It should be no surprise, that real estate offers many investment opportunities that the market simply can’t compete with, but there’s one in particular that I feel needs specific mentioning: the ability to say YES or NO at a ‘unit level’.

What do I mean ‘unit level’? I mean being able to say YES or NO as to whether to invest in or buy a particular house, i.e the ‘unit’ is a house (or townhouse, condo, etc.). With the market, you’re buying shares of stocks or mutual funds but are you actually directing the board of a company to make certain decision? Of course, not. You’re investing in a ticker symbol that represents a company (or mix of companies) that has its board of people you’ll likely never meet that make critical decisions every single day — without any input from you. How dare they! But it’s the truth.

However, in real estate, unless you’re investing in a hui or REIT, then you are the ‘board’ of your own personal investing firm and YOU’re the one calling the shots. Not everyone’s comfortable in that scenario, but I LOVE IT.

Now we’re in June, here in Hawaii. Summer is traditionally a good time for real estate — the grass is greener, kids are out of school, love is in the air, yada yada. And while no Hawaiian city made a recent Top Ten list by my friends at FortuneBuilders, there are bound to be some fantastic deals around the corner.

Why? Well, the banks are primed to start releasing more distressed properties, of which there are plenty in Hawaii. Some might say it’s actually started. That means if you have cash to invest or are pre-approved for a mortgage and can thrown down a sizable down payment, then start looking NOW for properties where you can get yourself 15% or more upfront equity. Maybe you can rent it out to cover the mortgage while you watch it appreciate over the next decade (btw, never buy a house at retail — just don’t do it). This goes for here in Hawaii as well as on the mainland. My colleague Scot Stafford of Landmark Properties is finding amazing real estate deals in NW Washington!

Combined with the upcoming glut of more distressed mortgages on the market is the expiry of the non-judicial foreclosure moratorium, which I’ve mentioned many times before and won’t go into again here. In summary, get prepared for more DEALS here in the Hawaii market. If you’re aggressive or get on an investor’s buyers list, you should be able to get a nice deal that suits your criteria and budget.

Bottom Line: The Facebooks of the world can promise the moon and have all the razzle dazzle, but in the end even the biggest firework can be a dud. Real estate, if done properly, can offer all kinds of rewards that a ticker symbol can never compete with.

Filed Under: Buying & Selling, Hawaii, Market Analysis

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