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October 1, 2005 - Newsletter for the Maui Market
Aloha!
Don't forget, if you currently own a property and would like to be notified when there is a new listing in your particular complex, we can set you up to automatically receive the new listings via email. The service is also available for those interested in purchasing a condominium, home, land or other property. If you provide me with your first and last name, your email address, and the condo complex you wish to be notified of, we can program the system to notify you as new listings become available.
At the beginning of December, 2004, there were 186 condominiums for sale in the West Maui area and the total value was $156,629,640.00. At the beginning of January, 2005 there were 202 condominiums for sale in the West Maui area and the total value was $181,300,850.00 which translates in to a 9% increase in the number of condominium units listed for sale and 15.75% increase in total value. At the beginning of February, 2005 there were 213 condominiums for sale in the West Maui area and the total value was $192,803,740.00. At the beginning of March, 2005 there were 191 condominiums for sale in the West Maui area and the total value was $175,106,140.00. At the beginning of April, 2005 there were 176 condominiums for sale in the West Maui area and the total value was $166,628,680.00. At the beginning of May, 2005 there were 176 condominiums for sale in the West Maui area and the total value was $166,079,990.00. At the beginning of June, 2005 there were 164 condominiums for sale in the West Maui area and the total value was $161,629,240.00. At the beginning of July, 2005 there were 165 condominiums for sale in the West Maui area and the total value was $159,356,997.00. At the beginning of August, 2005 there were 166 condominiums for sale in the West Maui area and the total value was $154,446,497.00. At the beginning of September, 2005 there are 176 condominiums for sale in the West Maui area and the total value wass $163,215,390.00. At the beginning of October, 2005 there are 177 condominiums for sale in the West Maui area and the total value is $168,464,220.00 . The condominium for sale inventory since June, 2005 has been as low as 166 and is back up to 177 for October 1, 2005 .
The total condominium sales for West Maui during the month of December, 2004 was 47 and the total value was $21,974,500.00 during the month of January, 2005 total condominium sales for West Maui was 30 and the total value was $18,658,400.00; during the month of February, 2005 total condominium sales for West Maui was 64 and the total value was $32,380,771.00; during the month of March, 2005 total condominium sales for West Maui was 62 and the total value was $36,995,304.00; for the month of April, 2005 total condominium sales for West Maui was 69 and the total value was $37,681,957.00; for the month of May, 2005 total condominium sales for West Maui was 59 and the total value was $33,964,000.00; for the month of June, 2005 total condominium sales for West Maui was 59 and the total value was $34,565,250.00; for the month of July, 2005 total condominium sales for West Maui was 73 and the total value was $43,969,186.00; for the month of August, 2005 the total condominium sales for West Maui was 40 and the total value was $21,749,104.00 and one of these sales was at The Villas at Kahana Ridge; the month of September, 2005 total condominium sales for West Maui was 51 and the total value was $36,318,521.00 and eleven of these sales were at The Villas at Kahana Ridge with a value of $4,839,571.00. The total sales for August and September were very close.
For previous condo sale details go to our web site, www.jamesbfoster.com and click on Condo Sales. September is shaping up in the West Maui area to be similar to August, using a scale of 1 to 10 with 10 being a good Seller's Market; West Maui is approximately an "8" and defying predictions of a slow down. The real estate market is still very active. The year to date ending August 31, 2005 average price for a home on Maui is $960,994 which is up 31% from a year ago for the same time period ending August 31, 2004 and the year to date ending August 31, 2005 average price for a condo on Maui is $512,670 which is up 17% from a year ago for the same time period according to the Realtor Association of Maui statistics.
We have gone in to the MLS data base and pulled information for 2000 through 2004. In 2000 there were 654 condominiums sold in the West Maui area for a total value of $209,064,010; in 2001 there were 605 condominiums sold in the West Maui area for a total value of $271,681,337; in 2002 there were 730 condominiums sold in the West Maui area for a total value of $240,178,915; In 2003 there were 737 condominiums sold in the West Maui area for a total value of $319,748,466; In 2004 there were 699 condominiums sold in the West Maui area for a total value of $374,926,467. Up through September, 2005 we have 539 condominium sales in the West Maui area at an approximate value of $316,420,493.00 . The statistics have bumped up because of the 65 sales at The Villas at Kahana Ridge during 2005 totaling $20,474,436.00. At the end of September, 2004 there were 539 condos sold in W. Maui for a value of $293,498,324.
Mortgage Rates for week of October 3, 2005 from Central Pacific Bank - House/Condo: 5.625% 30 fixed 2.0 pts (5.73 APR); 5.875% 30yr fixed 1.0 pt (6.00 APR); No Docs: 5.875% 30yr fixed 1.0 pt (6.00 APR); Interest Only: 6.00% 30 yr fixed 1.0 Pt (6.13 APR); Condotel: 6.0% 30yr fixed 1.0 pt (6.61 APR); Construction: 5.375% 3 yr ARM 1.0 pt (6.61 APR); $1M loan 10% down: 6.125%, 30yr 1.0 pt (6.25 APR); No Income, 80/20 & Stated Land loans (Pts include origination)
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. I also post a Vacation Rental Management Report for your viewing by clicking on that tab in the upper left corner of my web site. If there are any specific condominium complexes that you wish to be notified by email when a condominium becomes available for sale, send me an email as I check the MLS data about four times daily and if a new listing comes on the market I immediately notify any clients who have requested that information. Many owners also like to track what the units are selling for in the building where they own which they can do from my site.
In the last newsletter we discussed what questions future sellers and buyers of real estate might need to ask yourself be familiar with such as: 1) What do I need to know about my real estate purchase contract, called a DROA in Hawaii? 2) Why are there contingencies in the DROA and why are they important? 3) What information is required to open an escrow to complete a sale? 4) Why should my deposit check be held by escrow and not the seller? 5) What does the closing agent do with the deposit? 5) What papers need to be prepared and signed by both the buyer and the seller? 6) How will the real estate loan be processed if it is not an all cash transaction? 7) Which of the costs and fees of the transaction are negotiable and when should I start negotiating them? 8) What is title insurance and why is it necessary in the real estate transaction? 9) Why does it matter how I take title to the property? 10) What problems might arise during the closing process to prevent the sale or closing from taking place? 11) How can I be certain that the papers I will be signing are correct? 12) Who makes the decision regarding the closing date? 13) Can I change the way I hold title after the closing occurs? 14) What happens if my closing has to be cancelled?
Below are the answers to the questions above
The Deposit Receipt Offer and Acceptance (DROA) is the copyrighted Hawaii Association of Realtors ® Standard Form and is licensed for use by the entire real estate industry on condition that there shall be no alteration of the printed portions, pagination, or paragraph numbers or breaks. This is a twelve page contract that is used by the Buyer’s agent when preparing an offer for the Seller of a property. If you would like a copy of the contract emailed please send an email request. This is the document that is used when escrow is opened after mutual acceptance between a Buyer and Seller. If you currently own property or may purchase property in Hawaii it is a document that you should be familiar with.
An offer prepared on the DROA form will typically be contingent upon the following: a) Contingency on Obtaining “Cash Funds” for the down payment of to purchase such as the sale of another property; b) Financing Contingencies, which means the Buyer will have to have a loan in order to purchase the property because they are not an all cash Buyer; c) Contingent on approval of the Preliminary Title Report; d) Contingent on the property being surveyed if land or a single family residence; e) Contingent on Buyer’s approval of Seller’s Disclosure within a specified time period; f) Inspection of the Property, often prepared by a professional inspection company; g) Termite Inspection Report prepared and no termites discovered; h) Satisfactory Appraisal which is ordered if a loan is involved; i) Review and acceptance of condominium or homeowners association documents, leasehold documents; Subdivision documents or other contracts affecting the property; j) Leases, short term vacation rental bookings or management contracts; or k) Additional deposits being paid in to escrow in addition to the initial good faith deposit which typically accompanies the DROA.
If the contingencies are not removed in writing by the Buyer then escrow may be cancelled and all deposit money returned or if Buyer fails to perform then escrow may be cancelled and the deposit would generally be forfeited to the Seller. Once the funds are in escrow they generally will not be released without a written release from both the Buyer and Seller.
Contingencies are important because it allows a Buyer, who is not familiar with the property the opportunity to confirm the representations made by the Seller and to confirm for the Seller the Buyer’s ability to perform.
In order to open escrow once there is mutual acceptance between Buyer and Seller what is required to open escrow is a copy of the contract and any addendums, detailed contact information for Buyer and Seller, Sale Price, Amount of Deposit, (the actual deposit). At this point, a preliminary title is ordered, a time line prepared of the critical due dates for items and various other details.
It is best to make the deposit check out to the escrow company so it is deposited directly in to the escrow companies trust account. The deposit should never be given directly to the seller.
Specific questions pertaining to escrow or the transaction can generally be answered by the Buyer or Seller’s agent or the escrow person assigned to the specific escrow number.
The first papers signed by the Buyer and Seller will be the Listing Agreement signed by the Seller and then the DROA signed by both Buyer and Seller. When escrow is opened all of the other documents will be prepared. Both the Seller and Buyer should always receive a copy of the draft closing documents and a Net Proceeds Statement to be reviewed by themselves and advisors prior to signing closing documents. Many of the transactions in Hawaii have all of the papers sent via fax, FedEx or often by email and the documents are signed and notarized where the Buyer and Seller reside and the Buyer and Seller do not actually appear in person at the closing.
If a loan is involved in the transaction it starts with the loan application, verification of information, underwriter approvals of appraisals, termite inspection reports and etc. After final loan approval the documents are drawn and sent to escrow to be signed with the other closing documents. Again it is important to see draft copies of the loan documents before signing. The Real Estate Settlement Procedures Act (RESPA) is a consumer protection statute, first passed in 1974. The purpose of RESPA is to provide a Good Faith Estimate (GFE) of settlement costs for a loan so the borrower knows in advance what their approximate costs will be. The escrow company can also provide an estimate of closing cost prior to closing of the transaction.
Title Insurance for a transaction is issued to protect the buyer and the lender. Insurance for the title is to guarantee the Buyer is actually buying what they think they are buying. Whether the Buyer or Seller pays varies from state to state. In Hawaii , usually the Buyer pays 40% and the Seller 60% of the Standard Title Insurance.
How a Buyer takes title to property depends on the individual circumstances and should be discussed with their attorney, accountant or financial advisor. After a transaction closes the Buyer can always change the way title is held by having the change completed and recorded, usually with minimal cost.
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.
For those of you who enjoy or use the internet on a regular basis or use your computer frequently, here are some interesting web sites you may want to visit.
http://earth.google.com - Now you can have the world built right into your computer! Those folks from Google have done it again with an exciting “fly over” program that allows you to point and zoom to anyplace on earth that you want to travel to. Your rocket ship takes off and at a dizzying speed flies you there while you watch the terrain whiz by below. Once you arrive at your destination, satellite images and local facts zoom into view. You can use Google search from your destination image to show a myriad of points of interest including hotels, restaurants, hospitals, shopping and airports. There is no registration or cost involved. Just get your engines revved and take off!
www.visualthesaurus.com - Looking for the right word but it won’t come quickly to mind? Written communication can be very influential in both your business and personal life. This great place provides a new, unique and intuitive alternative to the old fashioned thesaurus. You can visualize the relationship between words and initiate an Internet search from any word leading to either web pages or images. The interesting presentation at this site will help you to understand the relationships between words and meanings. In addition to synonyms, you can view 16 kinds of semantic relationships. For example, you can see that a nose is part of a face-- and many even more exotic word relationships. On top of being useful this place is fun!
www.economy.com/freelunch - How would you free access to over 100,000 economic, financial, and demographic data sources -- all arranged so you can use this data for business intelligence -- or even to help your child get a big A+ on a school paper? Rather than wander aimlessly in the desert of economic information looking for just the right facts, just pop over to this great place where you will find 14 categories of statistics including Real Estate, Demographics, and Consumer Spending to name a few. Need information on housing starts, sales, or the housing price index -- you got it! You can get to the data you need with a direct internal search tool and you won’t go broke getting all this great information -- it’s yours without any cost!
Kindest Regards,
Jim Foster
Chase 'N Rainbows Real Estate, Inc.
P.O. Box 10398
Lahaina , HI 96761
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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