Welcome back to another episode of Maui Living. Today I’m excited to discuss one of the first steps you need to take in the home buying process.
In Maui, it’s important to understand that you can buy a property sight unseen. Our contracts make it very easy for you to do this. All you need to do is put your earnest money deposit down, fly out to see the property during the due diligence period, and if you decide you don't like it, you can back out of the contract. You’ll get your full earnest money deposit back and The only thing you’re out is a trip to Maui. How bad can that really be?
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I encourage you to start as soon as possible.
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I encourage you to start this process as soon as possible if you’re thinking of buying. By writing an offer you position yourself with strength. Your contract can be a deterrent for other buyers if you’re the first one to make an offer.
We help all of our clients do this and it’s actually a pretty fun process. You’ll make offers, something will be accepted, and you can decide to buy it or not. It’s safe, easy, and fun.
If you have any questions for me, please don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.
A lot of my clients ask me this question: Should I buy a second home in Maui?
I’ve lived on the island for 30 years and have sold real estate for 18 of them. On top of this, my company has a thriving property management company that takes care of a lot of second homes. Needless to say, I know the ins and outs of buying, owning, and managing Maui properties. It’s wonderful to own a second home, but before you make the big decision of doing so, keep these six things in mind:
1. Spend time on Maui and get a feel for the Maui seasons before you buy. Each season brings a different feeling to the Island….for example, it gets very busy during the winter months, and you may not like the increased tourist traffic. Also, the only way to know if you’re not going to get island fever, is to spend time on the Island before you buy.
2. Be realistic about getting here. How long will it take? Do you need to go on two different planes and get a rental car? If you find it’s a big hassle just to make it out to your second home, you likely won’t be using it as much as you envisioned.
3. Put your pet through quarantine before you arrive on island. If you want to bring any animals, they’ll first have to go through a quarantine process at your home vet. After a variety of tests, you’ll get the proper papers, fly your pet out, and have your pet meet with a local vet. You can go back and forth with your pet, but you need to make sure the papers are updated. Here's a link to the HI Government Animal Quarantine site.
4. Choose where to buy. If you’re worried about your second home’s safety when you’re away, know that it depends on where the home is. There are 13 different ecosystems on the island as well as local areas, country areas, and resort areas. A lot of my second-home buyers will buy in the resort area because there are certain security systems put in place. If you buy outside the area, do research ahead of time and find out what security measures you’ll need.
5. Decide how to mange your property. You have two options: You can upkeep your home or hire someone else to do it. If you handle it yourself, you’ll have a long list of things to do each time you arrive. If you hire a property management company, they’ll handle everything and give you a greater peace of mind.
6. Short-Term Vacation Rental is not an option for a property zoned Residential. The zoning of the land for residential homes dictates you must have at least a six-month lease. The only way around that requirement is if you’ve lived in it for five years and have obtained a short-term vacation rental license. To apply for a short-term vacation rental, you’d need to submit paperwork and pass a County/community vote.
If you have any questions or need further information, feel free to reach out to us. We look forward to hearing from you soon.
We live in an era where technology is king, so when you’re choosing an agent to work with in your real estate transaction, you need to pick someone who is tech-savvy. This is especially true since we live on a little island in the center of the Pacific, where the time zone differs so much from the continental states. Technology will help bridge that gap.
You also need to decide if you want to work with a team or an individual agent. A team usually has specialists for each aspect of the buying process; an individual agent will be doing it all and must excel in each area.
Once you’ve made that decision, then hopefully that agent or team of agents will ask for a consult. This consult is key because it’s during that phase that they’ll identify all your needs, wants, and desires. They’ll also identify any potential problems, which is good, since it’s better to catch those issues earlier than later. This will help you and your agent(s) create a more seamless, relaxed, and joyful process. If the person you’re interviewing doesn’t ask for a consult, that indicates that they’re probably an order-taker, which aren’t as valuable as a team or agent who will guide you in the right direction for your goals.
Your team or agent needs certain qualities: experience, negotiating skills, great communication, tech-savviness, and trustworthiness, to name a few. These qualities can be identified during the consult, which can be done while you’re on the mainland or when you’re here on the island. Using the consult as an opportunity to vet your agent will save you time, energy, and heartache.
To expand on that, during this consult, you’ll want to ask the agent or team a series of questions to help determine whether they possess the qualities you’re looking for. Some examples include:
“How long have you been in the business?”
“What was your volume for the past year?”
“How many days was that particular home on the market? What was its list/sales price?”
Knowing an agent’s volume is important because in our quick-moving industry, you need to be doing deals in order to be on top of your game.
In addition to volume, an agent or team’s average days on market is a telling number, as well. Since we’re in a seller’s market right now, for instance, their days on market could be zero; zero days on market would mean that they captured that particular property before it even hit the market, got their client into it, and gave them a competitive negotiating position. That would mean that agent is going over and beyond the norm, which says that they’re an agent who would look out for your best interests and put you in a position of strength.
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Using the consult as an opportunity to vet your agent will save you time, energy, and heartache.
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Next, look at their list-to-sales-price ratio. If they’re a good negotiator, you’ll probably see a certain percentage taken off the list price. Whatever that ratio is, you can use that number to help you make a decision for yourself regarding whether to work with that agent or team of agents.
It’s also important to gain an understanding of that agent or team’s system. Take note of their communication processes and how their team (if they have one) works together so that you can know if you’ll feel comfortable working in that system.
Finally, be sure to ask them a few questions to determine how much they understand your needs. Ask them what features you’re looking for in a home or property, and also ask them what your motivations are; if they didn’t get that when you told them the first time, you might consider looking to work for someone else.
Hopefully, this process you use to interview agents will give you the competitive edge you need when you land on the island. If you have any questions or need any assistance, don’t hesitate to reach out to me. I’d be happy to help. Aloha!
People often ask me about how real estate agents make their money. The answer is a little more complicated than many might assume.
In short, agents receive a commission for each transaction they complete. Typically, sellers are expected to cover the commission fee for both agents involved: theirs and the buyer’s. This arrangement is contractually secured with a document called a listing agreement, which the seller signs to give their consent.
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My team and I go to great lengths to educate and guide our clients.
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However, there are rare circumstances where buyers, instead, are responsible for the commission fee.
For example, if a seller doing a private sale neglects to pay their agent the promised commission at the end of the deal, the buyer assumes liability. The good news is that this scenario is rare, and, also, For Sale By Owner listings sell at an average of 7% below the general market average.
Buyers may also become liable for this expense if the commission is too low or if they sign a buyer’s representation contract with a seller’s agent they met at an open house.
With all this in mind, I’ve never seen any of these three scenarios actually occur during my 17 years working in the Maui real estate market. My team and I go to great lengths to educate and guide our clients.
If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.
What’s the best way to make a great first impression when listing your home for sale?
Understand that it’s important to embrace technology. You only have one chance at a first impression, so use professional photos and compelling video, stage the home correctly, and capitalize on the features surrounding the home that most people wouldn’t understand. For instance, if you live close to the beach and you have an outdoor shower, set a surfboard next to it. That tells a story. That’s packaging.
What’s the difference between good packaging and poor packaging? If I came to your house offering two Rolex watches, but one was wrapped in a plain brown paper bag and the other was wrapped in a deluxe gift bag, which one would you choose?
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You only have one chance at a first impression.
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The answer is obvious, and that’s why you always need to be asking yourself how you can create that “Wow!” feeling, because that’s what’s going to sell your house. You’ll generate a lot of interest at the very beginning and give yourself a better chance at attracting multiple offers, which will help you sell the home quicker and for a higher price.
If you have any more questions about this topic or you have any other real estate needs, don’t hesitate to reach out to me. I’d be happy to help you.
Millennials Are Skipping Starter Homes for Their Dream Homes
A new trend has begun to emerge. With home prices skyrocketing in the starter home category, many first-time homebuyers are skipping the traditional starter homes and moving right into their dream homes.
What’s a Starter Home?
According to the National Association of Realtors (NAR), simply put, a starter home is a one or two-bedroom home (sometimes even a small, three bedroom). “Prices vary widely by market but starters on average cost $150,000 to $250,000 while trade-up and premium homes cost upwards of $300,000.”
Finding Their Forever Homes Now
A recent CNBC article revealed that there are many factors that delayed older millennials (ages 25-35) from buying a home earlier in their lives. The aftereffects of the Great Recession teaming up with larger education costs forced many to either remain living in their parent’s homes or to rent.
With the economy continuing to improve, many millennials have been able to break into better-paying jobs which has helped spur down payment savings. As the dream of homeownership comes closer to reality, many millennials are saving for their forever homes.
According to the latest statistics from NAR, 30% of millennials bought homes for $300,000 or more this year (up from 14% in 2013). Diane Swonk, Chief Economist at Grant Thornton weighed in saying, “They rented for longer. Now they’re going to where they want to stay.”
More and more millennials are settling down, getting married, and starting families, which is a huge factor driving them to look for larger homes.
Increased competition in the starter home market has also been a driving force in waiting to afford their dream homes. Inventory in the starter home market is down 14.2% from last year, according to research from Trulia. This has driven prices up and has led to bidding wars.
Many first-time buyers who were originally looking for starter homes are realizing that for just a little bit more of an investment, they could afford trade-up or premium homes instead.
Bottom Line
If you plan on purchasing your first home this year, let’s get together to determine how much house you can afford. You may be pleasantly surprised.
The estate, called Merrywood, in the D.C. suburb of McLean, Virginia, was sold by AOL founder Steve Case, who bought the home for $24.5 million in 2005.
It's unclear how the Saudi government will use the property, but the official purchaser was the Embassy of the Kingdom of Saudi Arabia, so presumably it could become a crash pad for visiting dignitaries from Saudi Arabia.
The Saudi Embassy couldn't immediately be reached for comment.
It's believed to be the most expensive sale price for real estate in the area.
Built in 1919, the seven-acre estate was the main home of Jacqueline Bouvier in the 1940s. The property has a swimming pool, tennis court, and a pavilion with an indoor lap pool, kitchen, gym and changing rooms. The main house stretches over 23,000 square feet and has been carefully renovated and restored.
The swimming pool area
Source: Sotheby’s International Realty | YouTube
The swimming pool at the childhood home of Jacqueline Kennedy Onassis in McLean, Virginia.
The living room
Source: Sotheby’s International Realty | YouTube
The living room.
The kitchen
Source: Sotheby’s International Realty | YouTube
The kitchen from the childhood home of Jacqueline Kennedy Onassis childhood in McLean, Virginia.
The sitting room
Source: Sotheby’s International Realty | YouTube
The master bedroom
Source: Sotheby’s International Realty | YouTube
The master bedroom from the childhood home of Jacqueline Kennedy Onassis childhood home McLean, Virginia.
In this extremely hot real estate market, some homeowners might consider selling their homes on their own which is known as a For Sale by Owner (FSBO). They rationalize that they don’t need a real estate agent and believe that they can save the fee for the services a real estate agent offers.
However, a study by Collateral Analytics reveals that FSBOs don’t actually save anything, and in some cases may be costing themselves more, by not listing with an agent.
In the study, they analyzed home sales in a variety of markets. The data showed that:
“FSBOs tend to sell for lower prices than comparable home sales, and in many cases below the average differential represented by the prevailing commission rate.” (emphasis added)
Why would FSBOs net less money than if they had used an agent?
The study makes several suggestions:
“There could be systematic bias on the buyer side as well. FSBO sales might attract more strategic buyers than MLS sales, particularly buyers who rationalize lower-priced bids with the logic that the seller is “saving” a traditional commission. Such buyers might specifically search for and target sellers who are not getting representational assistance from agents.” In other words, ‘bargain lookers’ might shop FSBOs more often.
“Experienced agents are experts at ‘staging’ homes for sale” which could bring more money for the home.
“Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.” If more buyers see a home, the greater the chances are that there could be a bidding war for the property.
Conclusions from the study:
FSBOs achieve prices significantly lower than those from similar properties sold by Realtors using the MLS.
The data suggests the average price was near 6% lowerfor FSBO sales of similar properties.
Bottom Line
As Dave Ramsey, America’s trusted voice on money, explains:
“Research has shown that, between mistakes, lack of negotiating skills, pricing errors and general exposure on the market, you’ll cost yourself more than the real estate commission…You’ll come out slightly better and with a lot less hassle if you use a top-shelf agent.”
Curious about local real estate? So are we! Every month we review trends in our real estate market and consider the number of homes on the market in each price tier, the amount of time particular homes have been listed for sale, specific neighborhood trends, the median price and square footage of each home sold and so much more. We’d love to invite you to do the same!
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We can definitely fill you in on details that are not listed on the report and help you determine the best home for you. If you are wondering if now is the time to sell, please try out our INSTANT home value tool. You’ll get an estimate on the value of your property in today’s market. Either way, we hope to hear from you soon as you get to know our neighborhoods and local real estate market better.
