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September, 2009 - Newsletter for the Maui Market
Aloha! Here is your eNewsletter for the Maui Market from Jim Foster
Hot Buys for September 6, 2009 – For a complete list of REOs and Short Sales in West Maui or the entire island send email request to Jim@JamesBFoster.com
Lahaina - Oceanfront Home on Front Street Going to Foreclosure on October 16th Current owner purchased in 2007 for $3,400,000.
Wailea – Large (6,359 s.f.) home on one acre in private gated community and originally listed for $7,900,000 and now a Short Sale and priced at $3,900,000 Make an Offer!!!!!
Hale Kai – One Bedroom Going to Foreclosure on September 11th
Hoyochi Nikko Two Bedroom Going to Foreclosure on September 11th
Kaanapali Shores Two Bedroom Going to Foreclosure on September 18th
Kahana Sunset One Bedroom Going to Foreclosure on September 11th
Kapalua Golf Villas One Bedroom Remodeled Gold Standard $625,000
Kapalua Ridge One Bedroom Two Bath REO $899,900 Make an Offer!
Lahaina Roads One Bedroom Going to Foreclosure on October 9th
Lahaina Roads One Bedroom REO $425,000 Make an Offer!
Lahaina Road Two Bedroom Short Sale $553,651
Lahaina Shores One Bedroom Short Sale $599,000
Masters – 2 Bedroom 2 Bathroom priced at $685,000 and is a Short Sale
Masters Two Bedroom Going to Foreclosure on September 11th
Papakea Three Bedroom Short Sale $655,000
Puamana Two Bedroom 1.5 Baths $675,000 Short Sale
Whaler Unit 410 One Bedroom Went to Foreclosure on 9/4/09
There are a substantial number of Short Sales and REO properties for sale in the Maui Realtors Association Multiple Listing Service (MLS) and the number is increasing and if you would like to have a list or are interested in these types of properties send an email to Jim@JamesBFoster.com
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Make sure you check out the Useful Internet Sites and Real Estate Tips at the end of this newsletter.
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Maui Real Estate - The real estate inventory is gradually decreasing with a high of 805 condominiums for sale in April and we have now worked our way down to 682 condominiums. We anticipate the real estate market will continue to soften on Maui for the next few months and gradually stabilize and reverse its trend. This is a Buyer’s Market now after having been a very strong Seller’s Market and this will eventually even out. Prices are low and financing is still attractive and interest rates will continue increase so buyers should not wait too long. If a buyer is a first-time home buyer (not owned a home for the past three years) tax credit of up to $8,000. Every dollar of a tax credit reduces your federal income taxes by one dollar. Inventory is plentiful. There are currently over 75 single-family homes priced at or below $425,000 with at least two bedrooms and one bath available in West, Central and South Maui. That is a considerable amount of affordable inventory compared to a year ago and interest rates have remained low.
To view the 2007 & 2008 Year End Statistics go to http://www.jamesbfoster.com/condosales.php and click on Maui MLS Statistics 2007 & 2008.
The West Maui real estate market continues to favor Buyers with Sellers willing to negotiate their prices. The current inventory of West Maui condominiums for sale is now at 662 (at 9/3/09) and on the same month in 2007 it was 475. Properties are requiring more time to sell such as five to six months and Buyers have a much larger inventory of properties for sale to choose from. If you’re curious about current trends in Maui real estate and where the market is headed, the answer is - it depends on Location - it depends on if it is condominium or single-family residential - it depends on whether you look at volume, average or median prices. In the current Maui real estate market, the for sale inventory continues to increase and prices are typically flat or have decreased.
Condominiums for Sale
2007 - In the West Maui real estate market, at the beginning of January, 2007 there were 410 condominiums listed for sale with the total value of $372,238,031.00; February, 2007 - 431 condos with the total value of $393,681,669.00; March, 2007 - 458 condos with the total value of $420,941,268.00; April, 2007 - 479 condos with the total value of $429,708,159.00; May, 2007 - 472 condos with the total value of $424,095,260.00; June, 2007 - 455 condos with the total value of $415,187,129.00; July, 2007 - 475 condos with the total value of $432,797,008.00; August, 2007 - 469 condos with the total value of $420,479,301.00; September, 2007 - 474 condos with the total value of $430,914,408.00; October, 2007 - 471 condos with the total value of $423,631,002.00; November, 2007 - 466 condos with the total value of $416,008,907.00; and December, 2007 - 485 condos with the total value of $421,080,117.00. The average number of condominiums for sale on West Maui for 2007 was 462 and the average total value was $416,730,118.25.
2008 - At the beginning of January, 2008 there were 511 condominiums listed for sale with the total value of $445,656,447.00; February, 2008 there were 559 condos with the total value of $500,946,603.00; March, 2008 - 595 condos with the total value of $529,779,322.00; April, 2008 - 647 condos with the total value of $606,635,687.00; May, 2008 - 634 condos with the total value of $583,391,821.00; June, 2008 - 644 condos with the total value of $590,736,279.00; July, 2008 - 680 condos with the total value of $662,919,268.00; August, 2008 - 703 condos with the total value of $693,069,348.00; September, 2008 - 693 condos with the total value of $654,411,079.00; October, 2008 - 673 condos with the total value of $620,032,454.00; November, 2008 - 715 condos with the total value of $652,379,032.00; and December, 2008 - 729 condos with the total value of $660,335,998.00. The average number of condominiums for sale on West Maui for 2008 was 648 and the average total value was $604,191,111.50.
2009 - At the beginning of January, 2009 there were 742 condominiums listed for sale with the total value of $693,143,047.00; February, 2009 there were 757 Condos with the total value of $709,234,346; March, 2009 there were 787 Condos with the total value of $681,864,289; April, 2009 there were 805 Condos with the total value of $693,368,793; May, 2009 there were 717 Condos with the total value of $629,812,465; June, 2009 there were 691 Condos with the total value of $591,075,527; July, 2009 there were 692 Condos with the total value of $588,385,017; August, 2009 there were 682 Condos with the total value of $575,359,815; and in September, 2009 there are 662 Condos with the total value of $540,291,317. The average number of condominiums for sale on West Maui from January 2009 to September 2009 is 726 and the average total value is $633,614,957.33.
The condominium for sale inventory since July, 2005 has been as low as 165 and is up to 662 for September 3, 2009. The “for sale” inventory on West Maui is reaching its peak.
Condominium Sales
2006 - The total condominium sales on West Maui during the month of January, 2006 there were 42 sales and the total value was $28,574,643.00; February, 2006, there were 48 sales with total value of $32,995,078.00; March, 2006 - 40 sales with total value of $32,199,584.00; April, 2006 - 43 sales with total value of $41,898,525.00; May, 2006 - 51 sales with total value of $39,644,886.00; June, 2006 - 40 sales with total value of $32,533,500.00; July, 2006 - 30 sales with total value of $26,212,000.00; August, 2006 - 28 sales with total value of $31,885,500.00; September, 2006 - 30 sales with total value of $24,770,000.00; October, 2006 - 29 sales with total value of $23,359,299.00; November, 2006 - 22 sales with total value of $13,414,600.00; and December, 2006 there were 30 sales with total value of $23,169,999.00. For 2006, the monthly average sales were 36 sales per month with the average sales value of $29,221,467.83 per month.
2007 - The total condominium sales for West Maui during the month of January, 2007 there were 37 sales and the total value was $33,091,000.00; February, 2007 there were 26 sales with total value of $16,330,000.00; March, 2007 - 32 sales with total value of $24,121,000.00; April, 2007 - 27 sales with total value of $16,766,000.00; May, 2007 - 28 sales with total value of $30,774,929.00; June, 2007 - 28 sales with total value of $18,917,000.00; July, 2007 - 21 sales with total value of $13,314,200.00; August, 2007 - 32 sales with total value of $33,258,999.00; September, 2007 - 23 sales with total value of $24,701,900.00; October, 2007 - 42 sales with total value of $28,159,900.00, however this included a packaged sale of 19 units at Aina Nalu in Lahaina; November, 2007 - 15 sales with total value of $15,930,000.00; and December, 2007 there were 13 sales with total value of $13,335,500.00. For 2007, the Month of December saw the lowest number of sales in 2007. The monthly average sales were 27 sales per month with the average sales value of $22,391,702.33 per month.
2008 - The total condominium sales for West Maui during the month of January, 2008 there were 20 sales and the total value was $16,184,800.00; February, 2008 there were 20 sales and the total value was $14,414,584.00; March, 2008 - 26 sales and the total value was $20,079,000.00; April 2008 - 28 sales and the total value was $20,488,500.00; May 2008 - 22 sales and the total value was $20,055,000; June 2008 - 14 sales and the total value was $11,957,000; July 2008 - 10 sales and the total value was $6,955,999; August 2008 - 13 sales and the total value was $8,055,000; September 2008 - 12 sales and the total value was $6,707,122; October 2008 - 12 sales and the total value was $8,042,500; November 2008 - 10 sales and the total value was $8,444,000; and December 2008 there were 6 sales and the total value was $6,265,000. For 2008, the average monthly sales were 16 sales per month with the average sales value of $12,304,042.08 per month.
Condominium Sales in 2009 - The total condominium sales for West Maui during the month of January, 2009 there were 76 sales and the total value was $95,573,286.00; February, 2009 there were 53 sales and the total value was $68,331,841.00; March, 2009 there were 34 sales and the total value was $31,681,595.00; April, 2009 there were 21 sales and the total value was $12,344,872.00; May, 2009 there were 9 sales and the total value was $8,070,500.00; June, 2009 there were 13 sales and the total value was $10,221,000.00; July, 2009 there were 20 sales and the total value was $11,754,762.00; and August, 2009 there were 21 sales and the total value was $16,180,500.00. From January 1, 2009 to September 1, 2009, the average monthly sales were 31 sales per month with the average sales value of $31,769,794.50 per month.
The West Maui Condominium sales in 2009, has been adjusted to accommodate the reported sales at the Honua Kai Beach Resort located in Kaanapali, which were recorded late in to the Maui MLS.
We have gone in to the Maui MLS database and pulled information for 2000 through 2008. In 2000 - 654 condominium units sold in the West Maui area for a total value of $209,064,010; in 2001 - 605 condominium units sold for a total value of $271,681,337; in 2002 - 730 condominiums sold for a total value of $240,178,915; in 2003 - 737 condominiums sold for a total value of $319,748,466; In 2004 - 700 condominiums sold for a total value of $375,033,467; in 2005 - 682 condominiums for a total value of $408,582,315; in 2006 - 435 condominiums for a total value of $351,782,614; in 2007 - 327 condominiums for a total value of $271,290,428; in 2008, - 193 condominium units sold for a total value of $147,648,505; and from January 1, 2009 to September 1, 2009, - 247 condominium units sold in the West Maui area for a total sales value of $254,158,356.00.
For previous condo sale details, go to our web site, http://www.jamesbfoster.com/condosales.php then scroll down to your choice and click to open the ADOBE pdf. For the time period of 1/1/2009 to 7/31/2009 the average price for a home on Maui was $741,097 which is down 17% for the time period of 1/1/08 to 7/31/08 when the average price was $891,812. For the same time period the average price for a Fee Simple condo on Maui was $750,556 which is down 25% for the same time period when the average price was $996,636 according to the RAM (Realtor Assoc. of Maui) statistics. Condo sales in Wailea, Makena, Kapalua and Kaanapali are having an impact on the Fee Simple Condo average price by increasing it.
Mortgage Rates for week of September 1, 2009 - from First Hawaiian Mortgage - Rates: Houses & Condos Full docs: 4.750% 30yr fixed 2.250 pts (5.031 APR) 5.000% 30yr fixed 1.000pts (5.171 APR) 5.250% 30yr fixed -0- pts (5.332 APR) Stated Income - No longer available: Interest Only To $625,500: 5.625 30 yr fixed (10/20) 1.00pts (5.783APR) Interest Only to $1M: 6.125% 30 yr fixed(10/20) 1.125 pt (6.301 APR) Condotels 6.125% 30 yr fixed 2.25 pts (6.430 APR) 6.375% 30 yr fixed 1.375 pts (6.598 APR) (Points include origination fee)
Mortgage Rates for week of August 1, 2009 - from First Hawaiian Mortgage - Rates: Houses & Condos Full docs: 4.875% 30yr fixed 2.125 pts (5.146 APR) 5.1250% 30yr fixed 1.125 pts (5.309 APR) 5.500% 30yr fixed -0- pts (5.584 APR) Stated Income - No longer available: Interest Only To $625,500: 6.000% 30 yr fixed (10/20)1.50 pts (6.206 APR) Interest Only to $1M: 6.25% 30 yr fixed(10/20) 1.00 pt (6.416 APR) Condotels 6.375% 30 yr fixed 1.75 pts (6.635 APR) (Points include origination fee)
Mortgage Rates for week of July 1, 2009 - from First Hawaiian Mortgage - Rates: Houses & Condos Full docs: 5.125% 30yr fixed 1.750 pts (5.366 APR) 5.250% 30yr fixed 1.375 pts (5.458 APR) 5.625% 30yr fixed -0- pts (5.629 APR) Stated Income - No longer available: Interest Only: 6.000% 30 yr fixed .875 pts (6.160 APR) To $1M: No longer available 6.50% 30 yr fixed 1.625 points for condotels.(6.749 APR) (Points include origination fee)
Mortgage Rates for week of June 2, 2009 - from First Hawaiian Mortgage - Rates: Houses & Condos Full docs: 5.000% 30yr fixed 2.25 pts (5.265 APR) 5.250% 30yr fixed 1.250 pts (5.426 APR) 5.6250% 30yr fixed -0- pts (5.629 APR) Stated Income - No longer available: Interest Only: 6.125% 30 yr fixed 1.50 pts (6.293 APR) To $1M: No longer available 6.50% 30 yr fixed 2.25 points for condotels.(6.393 APR) (Points include origination fee)
If you would like to view the most current sales statistics for Maui or West Maui Condominiums, you can go to my web site www.JamesBFoster.com and click on Condo Sales in the upper left corner of the home page or go to www.JamesBFoster.com/condosales.php.
Some recent and past news about what is going on in Maui & Hawaii
Weather - As I am writing this newsletter today, September 6, 2009, it is about 81 degrees and partly cloudy and sunny as you go towards downtown Lahaina but a beautiful Maui day. By Thursday back to just sunny weather. In August we lucked out when hurricane Felicia weakened as it approached the Big Island and then was downgraded and other strong weather systems bypassed Maui also. Then on August 25th Hurricane Hilda strengthened but passed hundreds of miles south of the Big Island.
Major Fire On Molokai - The 8,000-acre Molokai brush fire, which has been burning since Aug. 29, is 100 percent contained as September 5th. Firefighters from Maui and personnel from the National Park Service and the Department of Land and Natural Resources assisted the Molokai firefighters. The only property damage was to a garage and the only injury was a firefighter treated for smoke inhalation. The cause of the fire is under investigation.
Hawaii Officials Forecasting Gradual Economic Recovery - State officials are predicting the national recession and sharp decrease in visitor expenditures will have a smaller impact on Hawaii's economy this year than previously forecast with a 1.1 percent decline in Hawaii's 2009 real gross domestic product, down from a 1.6 percent decline forecast last quarter. The state's economy is expected to stabilize in 2010, with a modest 1.2 percent growth in visitor arrivals and real GDP rising 0.4 percent. With continued improvement in national and international economic conditions, modest growth in the state's economy is forecast to return by 2011. The visitor arrival count is forecast to increase by 4.3 percent in 2011, with visitor expenditures up 12 percent. Visitor arrivals in 2009 are expected to decline 5.9 percent. Visitor expenditures will decrease 11.5 percent and visitor days will decrease 6.8 percent.
Bill To Allow Home-Based Businesses More Leeway - Jeff Hunt said he based the home-based business section of the bill on similar existing ordinances in Portland, Ore., Honolulu and the Big Island. This is the meat of what the Planning Department would allow under the proposal: 1) County-permitted bed-and-breakfasts. 2) One nonfamily-member employee. 3) Up to eight customers a day. 4) Operations between 9 a.m. and 5 p.m. 5) Retail sales of products produced by the homeowner, such as baked goods and clothing alterations. 6) Deliveries to and from the home. The B&B ordinance passed last year, but the County Council has not yet addressed TVRs, which are vacation rentals in which the owner does not live on property. Council members probably won't touch it in the near future as they start to take up the long-awaited updates to the county's General Plan, which is a complex master planning process to establish a host of guidelines for the next 20 years.
Hello Calgary - Air Canada to launch nonstop, seasonal Hawaii-Calgary service on December 5th between Hawaii and Calgary, including flights to Kahului and Honolulu.
It will be the only carrier to provide nonstop service between Hawaii and Calgary.
One-way fares start, before taxes and fees, as low as $281 from Maui to Calgary and $254 from Honolulu to Calgary. Air Canada expects to offer up to three flights per week from Maui and up to two weekly flights from Honolulu. Maui flights are scheduled for Saturdays, Mondays and Fridays.
Recovery May Have Started - The recession is probably over and the recovery may have started but you would hardly notice, particularly if you are one of the unfortunate individuals trying to find work. Hawaii Pacific University professor Leroy Laney at the Economic Outlook for 2010 sponsored by First Hawaiian Bank is predicting that 2010 may be a relatively flat year and the recovery will not be a snapback, but just modest growth. Private building permits in Maui County are set to end this year down 30 percent. Big hotel projects have been canceled or postponed. The foreclosure of Makena Resort last week was a more spectacular demonstration of a widespread slowdown. Two other things outside the financial meltdown that also contributed to Maui’s down turn were the "Show Me the Water" ordinance that requires developers to show a permanent source of new water before getting permits, and the work force housing ordinance that requires 50 percent to 60 percent of residential projects to be sold for below-market prices. Maui's business decline came on very fast in the first quarter of 2008. Unemployment has doubled and may finish this year at 10 percent and visitor spending is down 16 percent. This economic recession looks like a quick drop and then a slow, flat rebound. The best hope is that Maui already has gotten through the quick-drop portion and predictions are for a modest and slow recovery next year.
Remodeling or Upgrading condominium or house - It is critical to have a licensed contractor and subcontractors with excellent references and experience working with Maui properties if you will be Remodeling or Upgrading a condominium or house Should you need assistance or referrals for a property you own or need an estimate for property you are contemplating purchasing, all Jim Foster on his toll free number 1-888-661-7994 or send him an email to Jim@JamesBFoster.com and we can provide names and contact information as we have contact information for several reputable contractors for both remodeling and new construction.
Foreclosures in Hawaii are growing - Weak real estate sales have made avoiding foreclosure harder for people who can't sell their property or pay their mortgage. The economic slowdown that has included widespread cuts in wages and jobs has made it harder for homeowners to pay their mortgages. Statewide unemployment in June was 7.4 percent, a 31-year high. The situation could become worse if state workers are forced to take proposed furloughs or pay cuts equating to a 13.8 percent wage reduction in each of the next two fiscal years. By county, Honolulu, or Oahu, had the highest overall number of foreclosure filings at 542, but the lowest rate per household at one filing per 618 households. The Big Island had 197 filings, or one per 394 households. Maui had 180 filings, or one per 361 households. Kauai had 71 filings, or one per 411 households.
HTA To Try New Blitz Out On California - The Hawaii Visitors and Convention Bureau, which markets North America, received approval yesterday to spend $2 million of the marketing opportunity fund by the end of the year on a blitz designed to bring more visitors from Seattle; Vancouver, British Columbia; and Portland, Ore. HT is looking at spending from $700,000 to $1 million per market in a blitz effort similar to the smiles campaign that they used to target San Francisco earlier this year. The earlier blitz was so successful that California wholesalers reported call volume and online visitors went up and some of them are still getting residual effects.
More Deadbeats Plague Hawaii Condo Boards - The rise in foreclosures is causing financial headaches for condominium and homeowner associations as more homeowners become delinquent in paying their maintenance fees. Some associations are having to contend with 15 percent to 20 percent of the units delinquent in paying fees. And some boards have had to raise maintenance fees mid-year as owners fall behind in paying their monthly dues, according to property management companies.
Other associations have had to resort to more aggressive methods of collecting the monthly fees, which can range from about $300 for a one-bedroom condo up to $1,500 or more for a large unit in an exclusive resort complex.
Hawaii Tourism Uptick May Hint At Recovery – For the first time in 16 months, Hawaii is seeing a bump in arrivals and hotel occupancy. In July, 725,000 people arrived in Hawaii, a 2.2 percent increase over July 2008. In another positive sign, Hawaii hotels filled 75 percent of their rooms in late July and early August, on par with last summer. Oahu posted a healthy 85 percent occupancy rate. The numbers suggest that deep discounting and aggressive promotion by hotels and airlines have finally found traction among cautious consumers. The figures include returning Hawaii residents, and adjusted numbers won’t be available until fall. But even after the adjustment, the arrival numbers are still likely to stand in contrast to the nearly uninterrupted double-digit declines since April 2008. No one is forecasting a tourism turnaround, and the few signs that the nation may be moving out of recession have not led to a rush of vacationers to Hawaii. Still, any good news is welcome in what could be the biggest one-year tourism downturn in Hawaii history. Through the first six months of 2009, visitor spending plummeted $882 million from the same time last year.
Furniture Refinishing - Kim Scott aka the Stripper has been refinishing furniture for vacation rentals in West Maui for over 11yrs. Her shop located at 278 Wili Ko Place #12 in Lahaina features a NIOSH approved open face spray booth for a professional finish. They specialize in faux finishing, painting, powder coating, repairs and restoration of Rattan and hard wood furniture, Kitchen & Bath cabinets, Air conditioning vents & more. Some of their clients include Mind's Eye Interiors, Napili Surf Resort, Chase N Rainbows, Ritz Carlton Club and Marriott Vacation Club. When considering replacing your used furniture this is an alternative to consider. To contact Kim call (808) 283-9664 or you can email her at scottk003@hawaii.rr.com
Medical Facilities on Maui - The Association for Improved Healthcare on Maui (AIHM) www.aihm-maui.org whose mission is to serve as an advocate for the creation of a system that will provide improved healthcare services to all of the citizens and visitors of Maui County has been making some excellent progress. For more information on making a contribution to this great cause, please visit the web site for AIHM at www.aihm-maui.org The new organization that is proceeding with Dr. Ron Kwon’s dream of a new hospital in Kihei is www.MalulaniFoundation.org To stay informed of what is transpiring with future approvals of either the Kihei or West Maui hospital, you can send me an email and request a subscription to the “Coconut Wireless” to either my email at Jim@JameBFoster.com or Jan@SunshineRainbows.com The West Maui Hospital is anticipating completion of the initial development and construction 2012. The construction permit will be applied for once the architect completes the construction plans.
Real Estate & Financial Planning Tips:
Last week I called a listing agent who has a listing at the Masters and we discussed how different lenders are responding in Short Sale and REO situations. He related a true story to me that is similar to the responses I have had in working with lenders in these situations. When a property is a potential Short Sale, the lender will typically request from the seller updated financials and a hardship letter explaining the borrowers current financial problems necessitating the Short Sale. Many of the lenders are back-logged and slow to respond. Another item required in the process is what is called a BPO (Broker’s Price Opinion) and is not an appraisal but a Broker Opinion of Value. The listing agent with the Masters listing, here on Maui, had stopped at an automotive window tinting business to have some work done and the employee noticed a Maui Condo Book in the back of the listing agents’ car that has a lot of date pertaining to Maui Condominium Projects. The automotive window tinting employee said he was doing BPOs on a part-time basis and wanted to know where he could get a copy of the book. This is a perfect example of how many lenders are having valuations set (frequently incorrectly by inexperienced people) and why it is so difficult working with Short Sales. This listing agent the Masters’ listing and had not been able to get the lender to respond to emails for over three months. If you see stories in the media about the large inventory the bank and real estate lenders are struggling with, much of the reason is the staff is inexperienced, over-worked with too many files and have unrealistic expectations as it relates to the current market value.
What is important for sellers to understand is how the sale price is established – In relation to real property, there are five things that cause a property to sell and thus impact its value: Location, condition, market conditions, advertising and price. Out of these five elements, pricing is key. Successful sales are typically a result of a property's list price being in proper alignment with the other four elements. Is a property's list price reflective of its value? Absolutely not. A list price is only an offer from a seller to sell and is simply a "call to action" for all interested buyers to step forward and make a claim as to the property's worth. A property’s true value is determined only by the worth, usefulness or utility to a buyer who may have a unique and special purpose for its use. This very simple sentence is essential in understanding value within the current real estate market and overcoming the current appraisal problems which are stifling many sales from closing.
Does an appraiser determine a home's value? It's an interesting question in lieu of the current appraisal problems creating a burden for both real estate professionals and consumers. The answer to the question is no, an appraiser does not determine value. The purpose of an appraisal ordered by lenders is to provide an analysis as to whether or not the lender's funding decision is sound.
In a home purchase transaction, a lender will usually grant a loan to a buyer based on the loan-to-appraised-value ratio. A buyer may opt to modify the appraisal contingency paragraph in a purchase agreement, which eliminates the need for a property to appraise at the contractually agreed purchase price. Now the real question of subjective value comes into play. Just how valuable is this property to the buyer? As it turns out, the buyer is willing to pay the difference in cash between the purchase price and the amount which the lender agrees to loan. Why? Because this property's location is closer to the buyer's employment location and the buyer sees better value in offsetting the monetary difference for the property rather than paying for the rest of his career in employment commute expenses and time.
Who determines value? If you guessed a listing agent or an appraiser, or even a home valuation Web site, think again. Value is initiated by a buyer who wants to buy and a seller who desires to sell. A property’s true value is determined only by the worth, usefulness or utility to a purchaser who may have a unique and special purpose for its use. The true value of a property isn't known until escrow closes.
Short Sales - Loan Modifications – Foreclosure
What is a Short Sale - A short sale occurs when the proceeds of a real estate sale fall short of the balance owed on the property. A short sale typically is executed to prevent a home foreclosure. Often a bank will choose to allow a short sale if they believe that it will result in a smaller financial loss than foreclosing. For the home owner, the advantages include avoidance of having a foreclosure on their credit history. In short, a short sale is nothing more than negotiating with lien holders a payoff for less than what they are owed.
How does a property owner benefit from a short sale - A short sale helps to relieve the stress of being in foreclosure. You can get rid of your big mortgage payment and move on with your life while ending the harassment from your lender. A short sale also prevents additional damage to your credit. Some late payments have already done some damage to your credit; however a foreclosure will do much more damage and lower your credit score.
Are short sales guaranteed to work - There are no guarantees with short sales and the banks have to approve the sale.
Time required for a Short Sale - A short sale takes approximately 60-90 days to complete and sometimes longer. This complicated process takes time so to have the option of a short sale the seller cannot wait until 1 week before the foreclosure auction as it would be very difficult to do a short sale in that time frame.
What is a Loan Modification – This procedure is implemented for a property owner that wants to remain the owner, whether an investment property or their residence. There has to be a legitimate hardship and the ability to provide documentation to show the hardship. Lenders only modify loans for borrowers that truly need it. They want to save the property from becoming another foreclosure. Of the borrower is significantly upside down in the loan, the lender would rather put someone else in the home. Loan modification does not stop the foreclosure process and it typically takes 60-90 days. During that process the lender can foreclose if the borrower has not paid anything. If the borrower has an adjustable rate loan that is getting ready to adjust up and make it difficult for the borrower to make the payments, the lender will typically modify the loan as the do NOT want the property back. All of the proper documentation has to be provided just as the borrower submitted for the original loan and it has to be accurate.
Hawaii Foreclosure Law Summary - Judicial Foreclosure Available: Yes; Non-Judicial Foreclosure Available: Yes; Primary Security Instruments: Deed of Trust, Mortgage; Timeline: Typically 60 days; Right of Redemption: None; Deficiency Judgments Allowed: Yes
In Hawaii, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.
Judicial Foreclosure – The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, the property will be auctioned off to the highest bidder.
Non-Judicial Foreclosure - The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".
Power of Sale Foreclosure Guidelines - If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:
The notice of intent to foreclose must be published once a week for three (3) successive weeks, the last publication to be not less than fourteen (14) days before the day of sale, in a newspaper having a general circulation in the county in which the mortgaged property is located.
Copies of the notice must be mailed or delivered to the mortgagor, the borrower, any prior or junior creditors, the state director of taxation and any other person entitled to receive notice. Additionally, the notice must be posted on the premises not less than twenty-one (21) days before the day of sale.
Notice must state: 1) The date, time, and place of the public sale; 2) The dates and times of the two (2) open houses of the mortgaged property, or if there will not to be any open houses, the public notice shall so state; 3) The unpaid balance of the moneys owed to the mortgagee under the mortgage agreement; 4) A description of the mortgaged property, including the address or description of the location of the mortgaged property, and the tax map key number of the mortgaged property; 5) The name of the mortgagor and the borrower; 6) the name of the lender; 7) The name of any prior or junior creditors having a recorded lien on the mortgaged property before the recordation of the notice of default; 8) The name, the address in the State, and the telephone number in the State of the person in the State conducting the public sale; and 9) The terms and conditions of the public sale.
Up until three (3) days before the sale, the borrower may cure the default and stop the sale by paying the lien debt, costs and reasonable attorney's fees, unless otherwise agreed to between the lender and the borrower.
The sale, which may be held no earlier than fourteen (14) days after the last ad is published, is to be made at auction to the highest bidder.
Any sale, in which notice has been given, may be postponed from time to time by public announcement made by the lender or their representative.
There are no rights of redemption in Hawaii.
We have also assisted sellers (for sale by owners) who had buyers but needed someone to facilitate the sale and guide them through the process and assure them they were asking a current market value price for their properties.
Many property owners who currently own underperforming assets can sell those assets and take advantage of tax deferred exchanges, turning an underperforming asset such as land into an income producing asset. If you are contemplating selling highly appreciated real estate during 2009 and would like for us to provide an analysis of how to best structure your transaction, please call me or send me an email if you would like additional information at 808-661-7994 or email Jim@JamesBFoster.com
Useful Internet Sites & Interesting DVDs:
Recommended DVDs – Fractals Hunting The Hidden Dimension - What do movie special effects, the stock market, heart attack, and the rings of Saturn have in common? They all consist of fractals, irregular repeating shapes that are found in cloud formations and tree limbs, in stalks of broccoli and craggy mountain ranges, and even in the rhythm of the human heart. Can be purchased on PBS at www.shoppbs.org
www.liarcard.com Is the truth important to you? This interesting service uses technology has been evaluated by various governmental, security and law enforcement entities and is easy to use and understand. With your pin number you just dial the toll-free access number, put in your PIN and provide the destination phone number of the party to be analyzed. Once your call begins, you'll be able to engage in a natural conversation. A buzz is played when the called party is suspected of not telling the truth and you can view a web-based dashboard to watch a truth indicator move as your subject is speaking. This isn’t free but the price – cost ratio isn’t bad.
www.cellswapper.com Do you hate cell phone contracts? Maybe you want to get a snazzy new phone that a different network is offering but have a year to go on your existing agreement and a penalty that could cost up to $200 to cancel. This site how to help you transfer your contract to another consumer for the remainder of the contract period. You are fully absolved of all responsibility and are free to initiate a new plan with a different carrier. This system also provides an incentive for those looking to start a wireless service plan with a short-term contract and no activation fees that otherwise could run as high as $45.
www.warrantyelephant.com Organize your warranties on this site and keep your peace of mind. You buy that great appliance, TV, cell phone – whatever. You get a warrantee (say 12 months). Then on the 368th day you decide to call and find out why your device hasn’t been working for the last couple of weeks and now you are out of warranty. This site that will help you avoid this type of dilemma and keep you on top of your warranties. They help you to organize your warranty information on anything you purchase. And you’ll get reminder emails at 3 months, 1 month and 1 week before your warranty expires.
www.shipgooder.com Save time and money at this useful web site. At this web site you can check rates for your package with Google like ease by comparing the major carriers, including UPS, DHL, FedEx, and the U.S. Postal Service. Just enter your zip code and the zip code for the recipient plus the weight of the package. In a split second you’re looking at all of the options available with a great cost comparison.
Kindest Regards, Jim Foster
Chase 'N Rainbows Real Estate, Inc.
Toll Free 888-661-7994
Direct Line 808-661-7994
Cell 808-870-5858
Fax 808-667-2957
Real Estate for Sale www.JamesBFoster.com
Vacation Rental www.ChaseNRainbows.com
Email Jim@JamesBFoster.com
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