Hawaii Housing News

News, Tips and Opinions About Hawaii Real Estate and Housing

How to Make a Strong Offer to Buy Property

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There are a lot of people out there right now looking to buy real estate in Hawaii — it’s a buyer’s market with low prices and low interest rates. Yes, interest rates are rising somewhat but they are still at historically low levels and are projected to stay low for the next year at least according to most sources. But just because the market is ripe for qualified buyers doesn’t mean that it’s easy to get that dream house. Here are a few quick tips to snag that beautiful 3br/2ba Honolulu single family house with the ocean view:

  1. Get pre-qualified. This is a no-brainer. Get this handled or have other sources of funding that match the price of range of houses you’re interested in. Remember, in a buyer’s market you have competition — you have to assume others will be putting in offers on the same properties that you are. Getting pre-qualified for a mortgage from a Hawaii regional lender or national lender or having funds ready and visible for a full cash offer shows the seller that you mean business and won’t be wasting their time.
  2. Shorten your contingency period. If you’ve already seen the property inside and out, do you need a full 14 days? Can you get a handyman or general contractor in that Manoa house the next 7-10 days instead? Again, this shows the seller you’re serious. Adjust your purchase offer accordingly — but only if you’re comfortable.
  3. Don’t ask for repairs. Take that Kapolei townhouse in its current condition, the “As Is” condition. Include an “As Is” addendum with your contract and reduce the stress of the homeowner. By doing so, you’re making the selling process easier for them and they may thank you by taking your offer over another.
  4. Waive cleaning, termite inspection and other fees. You have to see how these costs figure in to the overall structure of your particular property, but this might be another bargaining chip you could use in your favor to secure that Kailua vacation rental. Similarly, you could offer to pay a higher portion of the title and escrow fees that are normally paid by the seller.
  5. Be flexible with your closing time. If the seller is underwater, needs cash or is being transferred from Hawaii to the mainland, they might want a quick closing. Can you close in under 30 days? Conversely, they may need a full two months until their new house in Mililani is ready. Can you wait that long? Being flexible where others are not will make your offer more appealing than others.
  6. BE NICE AND SINCERE. Sounds simple, huh? It is and it isn’t. Real estate is a people-driven industry, especially here in Hawaii. Many sellers have accepted offers that maybe weren’t as strong as others but were delivered by pleasant, courteous buyers who understood the seller’s needs or merely imparted a warm, cheery feeling about the process. That warm, fuzzy feeling can go a long way so work on that smile!

Aloha!

Want to add more to this list? Comment here and share your wisdom!

Networking for Real Estate in Hawaii

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Networking for real estate can be more powerful than you think. They say “no man is an island”. And that holds true, especially on this island or any other in Hawaii. A lot of people, when going into business for themselves, want full control over everything. I fully admit that I fall into that lot. But only the most foolish among us would think that we know all we need and that there are no true benefits to engaging with others in the business (or even outside of it). There’s a synergy that only comes with combining forces with others. Or, to use a standard cliche, the whole is greater than the sum of its parts.

I write this post today because this evening at Oceans808 in the Restaurant Row area of downtown Honolulu, I’ll be joining a group we’ve dubbed The Action Takers, a real estate investor and entrepreneur Meetup group started in early 2010 by my friend Jon Kutsmeda and that’s been “rebooted” this past fall. Jon and I are now the co-organizers of this group which includes real estate investors, attorneys, contractors and handymen, realtors, financial asset managers and more. Furthermore, no ‘experience’ is needed. We’ve had quite a few beginner investors join our group and they often have just as much energy to contribute as people who’ve been investing for years.

Learn how to invest in Hawaii real estate with The Action Takers

The Action Takers Bi-Weekly Happy Hour at Oceans808!

So why are we meeting at Oceans808? Isn’t that a bar? Yes it is! Ok, it’s technically a club, not a bar. Hey, I like my evening Miller Lites and kalbi pupu plate. The real reason we meet there is that Jon and I are trying to do something different than what people get at other events. Our idea of a bi-weekly “investor happy hour” stems from the idea that people will really only do business together if they know each other at a deeper level. That means understanding someone’s demeanor, their take on the local market, their background, their energy, their objectives, get to know about their past, their family, etc. Basically, everything that goes into developing TRUST. After all, partnering on a deal in Hawaii could involve each person raising or being responsible for easily over $100,000 — would you do that with a stranger? I wouldn’t. So we’re making this a totally social event to encourage nothing but pure networking beyond the typical swap of business cards. Plus, Oceans808 has free validated parking, plenty of room to mingle and the food is good. 🙂

Networking is about not just synergy but also about filling in our gaps. No one can know all there is to rehabbing, foreclosure and contract laws, trusts, wholesaling, marketing, etc. Just the rate at which social media and all things ‘tech’ today are moving prohibits anyone from really knowing everything out there. But if you truly believe in the abundance mentality, that there are profitable ventures for everyone, then by sharing your knowledge and, in return, receiving as well, then coming to an event like this is a no-brainer.

And did I mention they have a good happy hour? I did? Ok, well just making sure.

TheActionTakers.com — meeting every other Wednesday at Oceans808 in Restaurant Row, Honolulu HI from 5:30 to 8:00 (more or less).

Maui Home Sales for 2010 – Up or Down?

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...but can residents find work, too?

Aloha, everyone. I just read this brief article (and its misleading title “Maui home sales are up”) in the Pacific Business News about the recent real estate sales figures for Maui. The overall picture is that while volume is up, median prices are way down. Let’s quickly look at the numbers. Sales of single family homes (SFH) this past December dropped 22% compared to December of 2009. However, total sales of 2010 beat 2009 figures by a sizable 17% – not bad. For condos? The December 2010 to 2009 comparison shows an increase of 14% while the yearly increase is a whopping 39% jump.

Now before people start jumping for joy, let’s dig further. Honestly, I’m not a big fan of comparing the numbers between the same month of different years. It makes for nice copy and may capture some important seasonal factors of some markets, but let’s just look at the yearly numbers for median sales price, shall we? The median price of a SFH in Maui dropped over $38,000 per unit or 8% from 2009 to 2010. Condos dropped 16% – over $72,000 per unit!

So sales volume is up while prices are way down (again, the misleading title but I’ll let that go). Why? Same story. Lots of properties are discounted or distressed because of all the foreclosures and short sales — really, this is not news anymore. Now while this does present good opportunities for Hawaii’s real estate investors, it’s not so rosy for the locals.

It was plainly obvious to me when I was in Maui for a week this past December. My parents were out on their first visit to the Aloha State. We flew into Kahului on a late Saturday morning after a few days on Oahu and promptly headed to Lahaina for lunch. Now this was a beautiful, sunny Saturday afternoon yet Lahaina was a GHOST TOWN. I was stunned. Where were all the people wandering around, visiting the local galleries, strolling along the seawall enjoying the views of Lanai? Later that evening we headed to our rental in Kihei where we would base ourselves for the next few days. Talking to the locals, everybody was down about the local housing market — short sales were everywhere. So be careful of the news you hear about market rebounds because we have a long way to go yet and the neighbor islands are going to feel it harder than Oahu (if they aren’t already) until we all get this thing figured out.

Don't hit the Kipahulu cows!

So I want to give some love here to our beautiful neighbor island to the east (and it really is stunning, if you haven’t visited; my tip: drive to Hana then keep going around Kipahulu – just don’t hit any cows). Hawaii is more than just Oahu and we need to be concerned about all our islands here. Maui residents, what’s your take on your market? Is it showing signs of life or what’s it going to take? Did I just have an off day in Lahaina or is that the state of affairs right now as we kick off 2011?

Share your comments below….gripe, moan, cheer, complain, rejoice……

Oahu Real Estate Market Rebounding – Don’t Believe the Hype!

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So I just had a quick glance at this brief report on real estate in Hawaii. It basically states that the average median price on sold houses and condos on Oahu climbed from July to August. The jump for SFH (single family homes) was over $40K — that’s quite an increase. Of course, it follows that someone is quoted in the article as saying that the increase in median price is a sign of a strengthening market.

I think it’s extremely premature to come to that conclusion. Anyone who has a basic understanding of statistics can tell you that a one-month spike of over $40K can at least partly, if not largely, be attributed to the decrease in the number of homes sold (each home sold then contributes a larger percentage to the change). Maybe a few more higher-end / luxury homes sold that month than normal which account for the climb by skewing the numbers. I know for certain that a few expensive homes sold in Hawaii Kai – that would most definitely bring up the average. Further inquiry would need to be done before coming to a clear conclusion. Forty thousand in one month seems to be more of an anomaly to me than a sign of a rebounding market.

I may be more conservative than other folks, but I believe in looking at the bigger picture. The real estate market on Oahu may indeed be somewhat of a different landscape from that of the mainland, but we are in the same “system” nonetheless. We still have problems with our economy and unemployment. We have countless foreclosures and short sales happening this very minute, despite some of the lowest interest rates in history. People ought to be flooding into the market, yet they’re not.

So while the news coming out of this article may still be considered positive by some, I’m going to temper my enthusiasm for the time being until a few more of these come across my desk. I’d advise you to do the same.