Archive for the 'Honolulu Real Estate 101' Category
Bitter Sweet Hawaii Solar Law
July 1st, 2008 categories: Honolulu Real Estate 101, Rants & Riffs
“Gov. Linda Lingle signed the measure, Senate Bill 644, SD 3, HD 3, CD 1, into law yesterday to reduce Hawaii’s dependence on imported oil. It requires all building permits for single-family homes issued after Jan. 1, 2010, to include solar water heaters.
Exceptions will be allowed where homes have poor sunlight; if it is cost-prohibitive after 15 years; when the dwelling has a substitute renewable energy source; or if there is an approved tankless water heater and another appliance, both powered by gas.”
READ THE HONOLULU STAR BULLETIN ARTICLE.
Solar makes sense in Hawaii. I am for voluntary use of Solar and I don’t like government mandates. Mandated safety belts, then bicycle helmets and now solar, all things that are good, but what price are our freedoms paying for this “Nanny” Government?
Today’s picture is taken from the water off of Waimanalo Beach. Note the Koolau mountains in the back ground.
Other Reading
What Price Should You Offer On A Honolulu Home?
Lower Property Taxes On Historic Homes
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Watch Your Honolulu Property Rights
June 27th, 2008 categories: Honolulu Real Estate 101, Rants & Riffs
I am a Honolulu Realtor because I have seen how home ownership changes the lives of those who own them. Certainly, the financial aspect of potential long-term appreciation is enticing, but property rights are fundamental to the freedoms we enjoy as Americans. One of our great founders, James Madison, writes about our property rights.
“In a word, as a man is said to have a right to his property, he may be equally said to have a property in his rights. Where an excess of power prevails, property of no sort is duly respected. No man is safe in his opinions, his person, his faculties, or his possessions. . . . Government is instituted to protect property of every sort; as well that which lies in the various rights of individuals, as that which the term particularly expresses. This being the end of government, that alone is a just government, which impartially secures to every man, whatever is his own.”
June 23 is the 3-year anniversary of a Supreme Court decision that should raise a cry from all of us. Traditionally, government can “take” your property if there is a “public use” for which your property is needed (i.e. roads, sewers, parks, etc.). However, in 2005, a decision known as KELO, the Supreme Court allowed the City of New London to take a property for development by a private developer for private use. The logic behind the decision was that the area was blighted and that the “public” would benefit from the renewal of the area. Since I am not a lawyer, let alone a constitutional scholar visit a post by Hugh Hewitt. He does a great job explaining how our constitutional rights have been trampled.
Today’s picture was taken from the lanai of a Tahitienne Cooperative unit for sale on the Gold Coast.
More Posts to Read
Determining An Offering Price For Honolulu Property
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Buying Property Through the Bankruptcy Court
June 19th, 2008 categories: Buying Honolulu Real Estate, Honolulu Real Estate 101
I have been fortunate to represent a number of U.S. Bankruptcy Trustees in the sale of Honolulu real estate. I find that many people think that the bankruptcy sales process is the same as a foreclosure. In some ways it is similar and in other ways it is totally different. Rather than comparing and contrasting the two processes, I am going to walk you through an outline of the bankruptcy (Chapter 7) sales process.
1. An owner of a property files Chapter 7 Bankruptcy and becomes known as the debtor. This will “stay” creditors from taking action to exercise their rights. Read the rest of this entry »
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Honolulu Real Estate and Inflation?
June 17th, 2008 categories: Honolulu Real Estate 101, Rants & Riffs
More and more reports are coming out pondering significant economic inflation. As much as I don’t want to see the inflation of the late 70’s and early 80’s, I would be remiss to turn a blind eye to its possibility. Two recent articles at the Wall Street Journal’s website talk about signs that inflation may be on its way.
“Still, the Fed chief said, the runup in oil prices “has added to the upside risks to inflation and inflation expectations.” Timothy Geithner, Federal Reserve Bank of New York president, echoed those remarks in a separate appearance Monday.”
CLICK HERE TO READ THE ARTICLE.
“On Tuesday, China’s stock market was the latest to feel the blow, with the benchmark Shanghai Composite Index tumbling by 7.7%, to its lowest close this year. The drop came after the government announced steps to remove cash from the financial system in an attempt to tamp down inflation.”
CLICK HERE TO READ THE ARTICLE.
How does this tie into Honolulu real estate ownership? If inflation does happen, the price of everything will begin to rise. During our last inflationary period, real estate was a great hedge. Therefore, specifically purchasing more core Honolulu real estate could be a great place to be if inflation should come.
Today’s picture was taken from the a valley across from Makiki Heights and it shows some of the great homes located in Makiki Heights.
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Off Island Lender…Or Not?
June 16th, 2008 categories: Honolulu Real Estate 101
A blog by Cynthia Hoskins, of Clark Realty on the Big Island, inspired me to write about off island lenders. Cynthia writes the following.
“ Local lenders understand the Hawaii Purchase Contract and its contingencies and have established relationships with underwriters who are familiar with the unique aspects of the Hawaii real estate market–there are many!”
CLICK HERE TO READ HER ENTIRE POST.
Over the last several years, I have seen a proliferation of lenders from the mainland that are trying to make loans in Hawaii. I am sure you have seen them on local T.V. If you Google “hawaii mortgage lender”, it seems many of the lenders that come up on the first page turn out to be from the mainland.
Here’s my two cents, if at all possible use a local lender! Hawaii is not the mainland and because there are many unique aspects to our real estate law an off island lender can have difficulties. The recent revisions to the Hawaii Purchase Contract, gives a seller the right to cancel the sale if the buyer fails to meet the dates set forth in the financing section (paragraph C-25). I know of at least one case where the dates weren’t met and the sale was canceled. The buyer wasn’t happy, but the seller was within their rights to cancel so the buyer was out of luck.
From what I can tell, a buyer from Hawaii considering an off island lender is trying to get the lowest interest rate and cost associated with getting the loan. At the end of the day, I don’t see buyers getting great deals by going off island. If anything they end up getting poor service and a nightmarish loan process. Once a buyer finds a property they like enough to make an offer and go through the stress of a purchase, it’s a shame to possibly loose it as a result of the lender. Think about it.
Today’s picture is of the University of Hawaii and it was taken from the Round Top lookout.
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Should A Honolulu Seller Give Occupancy To A Buyer Before Closing?
June 12th, 2008 categories: Honolulu Real Estate 101
So you sold your house and now you’re a couple of weeks away from the close of escrow. The buyer’s lease has run out and they have to move. You get a call asking that the buyer be allowed to move in prior to the close of escrow. What to do? What to do?
Here is the short answer…run for the hills! Don’t let it happen! Squash the idea like a bug! Just say “No”! Am I clear? Any questions? Now for the long answer.
Other than feeling like a nice guy or gal, as I see it, there is no upside for a seller granting occupancy before the new owner owns the home. What follows is a list of the potential negatives.
1. If the buyer can’t close (loses loan, doesn’t have the down payment, or dies), you may now have a hold over tenant. Their things will be in the home and now, in the best-case scenario, they will need time to move out. In the worst-case scenario, it is possible you would have to evict the buyer from the home.
2. If the buyer can’t close, your once pristine home may now need cleaning and repairs to make it market ready again.
3. Given the additional time the buyer may need to move, you could be losing valuable marketing time.
4. Think of an early occupancy as month long inspection of your property. I advise that you disclose anything and everything you know about the property, but is it possible that the buyer could find issues of which you were unaware? If they found something, do you think they might try to renegotiate the deal?
5. Under Hawaii Law, if a material issue is discovered during the escrow process a buyer earns an additional 15 days to investigate the problem. If during this 15-day period the buyer decides they cannot get comfortable with the issue, they will have the right to terminate the sale no matter what document they may have signed. Wouldn’t that be nice, especially since they are now living there.
6. Once the buyer is in the home, is it possible they could start painting and remodeling? Of course it is. If this happened and the closing didn’t occur, you could end up having to finish what the started. This is getting better with every point!
I am sure this is not a complete list, but I wanted to help seller’s understand their exposure to giving the buyer early occupancy.
Today’s picture was taken from Lower Makiki Heights looking toward Roung Top.
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Honolulu Flood Insurance Questions?
June 11th, 2008 categories: Honolulu Real Estate 101
Flood insurance can increase the cost of owning your Honolulu home, so here is a new website that will allow you to determine your exposure. Be sure to check a property out BEFORE you buy.
“A new tool offered by the State Department of Land and Natural Resources offers residents a chance to evaluate their flood hazard risks based on FEMA’s Flood Insurance Rate Maps. The Hawai’i Flood Hazard Assessment Tool was designed to assist Hawai’i residents. The public can access this tool by going to www.hawaiinfip.org.”
CLICK HERE TO READ THE ENTIRE HONOLULU ADVERTISER ARTICLE.
Today’s picture was taken from the Lanikai Pillbox trail and it is Mid Pacific Country Club.
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Can A School Have An Impact on Honolulu Real Estate Values?
June 5th, 2008 categories: Honolulu Real Estate 101
I attended the oldest High School west of the Rocky Mountains, Lahainaluna, on Maui. It was founded in 1831, but this is not the institution of which I write today. Punahou school, in Honolulu, was founded in 1841 and is considered one of the best schools in the country. It’s graduates include Barack Obama (if you live under a rock…the presidential candidate), Steve Case (founder of AOL), Michelle Wie (golfer), professional football players Mark Tuinei and Mose Tatupu to name a few. For much of Hawaii’s history, Punahou has provided many of the community and business leaders of Hawaii. So how does this impact the value of Honolulu real estate?
1. The pebble on the pond. Kindergarten through 12th grade has an enrollment of 3750 students. Assume that the families of its students would like to be as close as they can to the school and you can see that Punahou creates demand for homes in the Honolulu.
2. Jobs. Punahou is one of the largest private schools in the country. Imagine all of the teachers, support staff and maintenance people necessary to keep this giant running. Another huge supply of demand for homes in the immediate area.
3. Alumni. I am sure somewhere in the world there are alumni more loyal and engaged than Punahou’s. Maybe football fans in the SEC. If there are, I have yet to meet them. Punahou grads want there kids to attend the school. Many work or volunteer on campus and, again, here is another supply of ready buyers.
I find it interesting that Punahou is the oldest school on Oahu and that many other fine schools have chosen to establish their bases within two miles of it. Maryknoll, Mid Pacific Institute, Hana Hauoli School, Our Redeemer Lutheran School, the UH Lab School and Noelani Elementary School to name a few. Combine the demand created by Punahou with that created by these schools and you can understand that there is a supply of tremendous demand for Honolulu housing.
Today’s picture is of the heart and soul of Punahou. Known as Ka Punahou this is the spring that provides much of the water used at the school.
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Honolulu’s Twin Brothers of Different Mothers!
June 4th, 2008 categories: Honolulu Real Estate 101
To be politically correct, I need to say “Twin Sisters of Different Fathers.” I know what you’re thinking, where is Keahi going today. During yesterday’s workout, I began pondering the differences between buyers and sellers of real estate and I came to the conclusion that, though they are on opposite sides of the negotiating table, in many ways they are the same. The more I thought, the more I understood that sellers who price their homes to high are like buyers who make “low ball” offers.
Both of them have the following characteristics.
1. They ignore the facts. In most cases, recent comparable sales will set the value of a property within a certain range of value, yet they try to get a price well above or below this range. If gold is generally priced at $800 an ounce, what makes a buyer think they can buy it for $700 an ounce, a seller think that they can sell at $900 an ounce.
2. They ignore professional advice. If a client works with an experienced real estate agent or broker, that professional most likely has many years of experience and has sold hundreds of homes. Yet when a price is suggested, the client ignores that experience and wants to come in with an offer outside the current market. Attorneys have a saying, and I paraphrase, “An attorney that represents themselves has a client for a fool.”
3. They don’t trust their agent. I have seen situations where the agent/client agent client relationship is very adversarial. Both parties seem literally at one another’s throat. I don’t work in abusive relationships, so I haven’t experienced this bizarre happening, but why would the agent and/or client put themselves in that position. A word of advice for both of you, there are too many fish in the ocean to work with someone you don’t trust.
4. They are unrealistic. In any Honolulu real estate market, there is a price range for every property that will be widely supported by the majority of the buying community. If a seller is too far above that price they won’t sell, if a buyer tries to buy too far below that price, they won’t be able to buy. Go back to my previous post on offering prices (both buyers and sellers) and you will have a clear road map to arriving at a fair offering price.
In summary, the market is the market. If you are a buyer and prices are above your budget, than you are not a buyer in that market. If you are a seller and prices are too far below your expect price, than wait and on the next up cycle you might get there. The one difference between these two parties is that the seller can wait, because over time the market most likely will catch up to the desired price. However, by waiting, the buyer will become that much further priced out of the market. As my father says, “Choose wisely!”
Today’s picture is of great vintage home that can be found on Sierra Drive.
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To Add Or Not To Add to Your Honolulu Contract?
June 4th, 2008 categories: Honolulu Real Estate 101
Here is another part of your Honolulu contract quiver. Coldwell Banker Pacific Properties uses an Addendum to the Purchase Contract and many firms mirror this document. CLICK HERE TO GET A COPY. For me, one needs to ask whether or not this is necessary and if it brings some additional language that justifies its addition to the contract. I say no!
The Hawaii Association of Realtors Purchase Contract is well written and it already addresses any additional issue which may be included in the Coldwell Banker Addendum. Read on and learn.
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