The Update to the Updates!
January 4, 2011
On the Affordable Paradise Web site, I suggest visitors go to the “Updates” page (the one you're on right now) and browse for topics relevant to their interests. There's a caveat, though. Since the updates have been posted over a period of time, some of the older ones, particularly those speaking of the real estate picture, are outdated.
So here's the latest scoop on that front, but bear in mind that these reports are my interpretations of what is, as opposed to “what is.” These interpretations are derived from the continual research and observances by my Lovely Bride and myself, and we do stay on top of the market.
The Fourth Edition of Affordable Paradise is curiously pretty much up-to-date even though it was published over a year ago. Property values had tanked just before the book went to press, and since then they went down even more and have now, from all appearances, stabilized somewhat so the values show are still right on.
Of course there are many statistics that blow that notion apart, since there are so many unsold properties out there and some have been on the market for literally years. But it has been our feeling that any properties that are realistically priced sell pretty fast. The Realtors' stats confirm that sales are picking up, but at lower prices.
It appears that many who would like to sell have opted instead to rent until the market recovers, and in the meantime they list the property for a high price. If somebody comes along and pays the price, fine. If not, that's fine, too. That is at least one of the reasons for some of those listings that have remained unsold for so long.
But here's the good news: There has never been a better time than now to make the move to your Hawaii home! Whether on the Kona or Hilo sides of the Big Island, there are some amazing bargains out there. Check the Hawaii Multiple Listing Service (MLS), log in with any Big Island Realtor to get their listings and updates to fit your criteria, or come on over and get up close and personal!
We spoke with a Realtor friend last night and she shared an interesting little vignette. She said that a recurring thing with her clients is that they come look at a house, love it, but feel it's priced too high. Our friend will suggest they make an offer, but they feel, no, the seller is asking more than they are prepared to pay so they'll keep looking. A few days later, somebody else comes along, tosses in an offer, the seller accepts it and client No. 1 comes back and says, “Hey, I would have gladly paid that much for the property.”
The lesson: If you like it and the price feels too high, make an offer. Here's even a more fun idea: If you like it and the price seems right on, still make an offer!
The only time that idea can come back to bite you is if the property is truly priced right and you lowball it, your offer might well get kicked aside if others come in at the same time. So you are taking a chance when you lowball an already low-priced offering.
Making a low offer on an already well-priced offering is generally not a good idea on a new listing. Check to see how long the property has been on the market first!
You can enter the address of the property in question into Zillow.com or Trulia.com and get all sort of great data to help you make an informed offer. You can find out when the property last sold, for how much, how long it's been listed, if it has had previous listing attempts and for how much, and more! Do your research and be an informed buyer!
And then there's the “amazingly low price,” which usually becomes a reminder of what you Mom and Dad told you when you were very young, “If it looks too good to be true, it usually is.” Often when yo see a really low price on a property, it's very likely a “short sale,” which means the seller is about to be foreclose on and is trying to get an offer, any offer, that s/he can take to the bank to see if they'll accept it. The offer is usually way less than the seller owes on the property, and these transactions can take many months to come together, if they ever do at all. Some, about the time the bank gets around to looking at the offers, will go with the highest one and then tell the buyer that the house is now worth $XXX more than it was when the offer was placed, so either you come up with the extra money or they'll just start over again. You need lots of patience to deal with short sales!
Another common trick these days is to intentionally list a property for substantially less than its market value, which will then bring in immediate offers. The the seller or the agent) will start a bidding war and ask each person who placed an offer to come up with their “highest and best” offer. The lowball price was designed to find everybody who was interested, and once they come out of the woodwork and identify themselves with an offer, the bidding war commences.
These are just a few things to keep in focus when you go house-hunting, so you won't end up wasting a bunch of time and end up with a bunch of nothing.
One more thing that you need to know when responding to real estate ads is about the photo fraud that is now become mainstream. If you're interested, please check out Update #29!
That's it for now. Please visit the Affordable Paradise Blog with your comments or questions! I also just started FaceBook and Twitter accounts, too, so let's talk story!
Aloha Nui Loa!
You are always welcome to check in to the Affordable Paradise Blog and respond to this article and to talk story about your concerns. You can read some of the many postings there and learn from the conversations of others, too. You can also go on konaweb.com and punaweb.org and either participate in the discussions or just eavesdrop for a while!
We wish you all the best, and never forget to
Please Live Aloha!
Mahalo for "listening."
Skip Thomsen & Ohana
Updated 2/4/2011