Hawaii Real Estate Archives - Richard Cricchio's Hawaii Real Estate Blog

Real Estate Fees That Make Sense!

We are unique! We do real estate differently, and the difference means our sellers save thousands over what they’d likely pay an ordinary real estate company. But the Help-U-Sell Difference is more than full service for less. There are a lot of ways in which we are different!

Why Real Estate Sales Commissions Are So High

Real Estate Sales Commissions Are . . . Crazy!

Two video minutes that will make you go ‘Hmmmm.’

Attention Oahu Real Estate Agents!

It’s time to get serious about your career in real estate. The market is moving at a rapid pace, homes are selling and it looks like we are in for several years of marketplace normalcy.

Now is the time when great careers and great real estate businesses are made. It is your moment, your time to shine, your best shot at major success . . . IF you are positioned to take advantage of the opportunity. What does that mean?

If you are an agent working for an ordinary real estate company, be it franchised or independent, you are competing against thousands of other agents just like yourself, with the same tools, same information, same offering, and same pricing. The only edge you could possibly have in that fishbowl – the only things that might set you apart from the pack – are your personality and your work ethic. So, let’s assume you really apply yourself next year. You work harder and smarter and you polish up that smile . . . and you go from doing 12 deals to doing 16. That’s very nice, but it’s hardly the stuff of real estate greatness.

This is not the time to increase your production by 30%. It is the time to increase it by 300%. And you won’t do it by doing the same things you did last year and the year before, only doing them harder. It’s time to look for a better way to do the real estate business.

And you know what the way is: It is Help-U-Sell Honolulu Properties. Here’s why:

As Help-U-Sell Brokers and Agents, we go into the marketplace with a consumer offer that is not only fundamentally different than that of our competitors, but also superior to theirs from a consumer point of view. We accomplish the same results the pack of ordinary agents and brokers do, but we save people thousands over what they’d pay anyone else! It is an offer that is so compelling that, now the word is out all over the Island, many potential sellers want to at least talk with us before making a listing decision. Can you imagine how much more you could do if people you don’t know called you out of the clear blue and asked, ‘You can save me money, right? How does this work?’

We focus on marketing and marketplace intelligence that more closely resembles what Home Depot does than what ABC Realty does. And because Help-U-Sell marketing is systematic and focused, it produces a steady stream of buyer and seller leads into the office.

Our agents love working here because we have the one thing nobody else can give them: leads. While agents at other companies flirt with burn out from the gigantic job description they try to manage, our agents have a streamlined, focused job and an opportunity to do more, make more and have more fun doing it.

It is a smaller, tightly knit office team that is outperforming companies with 10 times the agents. It is very different from an ordinary office where the broker begs people to come to work, begs people to stay, begs people to attend sales meeting, begs people to do the prospecting they promised to do and so on (and, aren’t you getting tired of all that begging?).

If you are mired in an ordinary real estate office with nothing special to offer other than your track record and personality, give me a call and let’s talk about how things might be different and better at Help-U-Sell Honolulu Properties.

Help-U-Sell Honolulu Properties is a full service real estate company that provides exceptional service while charging less than ordinary Realtors. We’ve been successfully helping buyers and sellers all over Oahu for more than 12 years and we’d be delighted to help you achieve your housing dreams. Contact us at (808) 593-8811, or visit our website.

Saving When Selling, Hawaii Style

You know, we are Help-U-Sell Honolulu Properties. You know, we save people thousands over what they’d pay an ordinary real estate agent when selling a home. You know we provide exceptional service and get rave reviews from the clients we serve. What you may not know is HOW MUCH we save our sellers. Let me give you 3 examples from the dozens of homes we’ve sold this year. kalaheo 1

First is a great house we sold in Kailua. It had 5 bedrooms, 5 baths and, as you can see, a great pool. The house sold for $1,615,000 Had the seller listed with an ordinary real estate agent, the listing portion of the commission would probably have been something like $40,000. We we listed and sold it and charged the seller just $9,750 on the listing side, a savings of about $30,000!

makanani 1

Next, we have a big 5 bedroom, 4 bath home in Kamehameha Heights with a 3 car garage. It also had an outstanding view! The home sold for $1,195,000 in about a month. An ordinary agent would have probably charged about $35,000 on the listing side. We charged just $9,750! Again, we saved this seller thousands of dollars.

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Finally, just so you know we also work with less expensive properties, here is the view from a one bedroom condo we sold not too long ago. It went for $600,000 and an ordinary real estate company might have charged $15,000 or more on the listing side. We charged just $5,750 and this happy seller saved about $10,000!

I don’t mean to brag, but really: if you are thinking about selling your Oahu home, you owe it to yourself to have a quick conversation with the pros at Help-U-Sell Honolulu Properties. We’ll get you top dollar in a reasonably quick time and save you a ton of money in real estate commissions!

Can You Cancel Your Listing?

I don’t know. That’s a legal question and the answer will depend on the specific listing agreement you signed. The more important question is: Why do you want to cancel your listing?

The answer is usually ‘no activity’ or ‘no communication.’ Let’s take those two things in order.

If your house is not being shown, if your open house is the loneliest place in town, you have to ask why. First, look at the market. How long does it take a properly priced listing in your area to sell? Is it 30 days or 100? Right now, our Oahu days on market is healthy: less than 30 days from listing to accepted offer. But your specific neighborhood could be different. Have a conversation with your agent, get the facts, and adjust your expectations.

The next thing to consider is the product. By that, I mean your house. It is a product now, one that has to compete with similar products on the market at the same time. How does it stack up in terms of curb appeal? Does it show well? And most important, is it properly priced? It can be very difficult for home owners to see their houses through a cold buyer’s eyes. History and emotion cloud the vision and the run-down-fixer-upper that’s priced 10% over market looks like a bargain-priced-palace to the seller. Shake yourself out of that stupor! Call your agent and ask them to show you six homes any potential buyer who might look at yours would also see. Then come back to your house, take a careful look and talk with your agent about how to be more competitive.

By far, the biggest reason homes aren’t shown and don’t sell is price. Did you take your agent’s advice on pricing at the time of listing? Or did you insist that you wanted to start higher? (after all, you could always come down) Take a moment and watch this short video about pricing and see if it resonates with your situation:

Now let’s talk about Communication. Your agent should be talking to you every week whether there is anything to report or not. You should be reviewing market activity together once a month. If this isn’t happening, call your agent and communicate your expectation for staying in touch. If things don’t change, call the agent’s Broker.

My final and most important piece of advice is this: you can avoid all of these problems by choosing the right company. When you get ready to list, talk to Help-U-Sell Honolulu Properties . We do it differently and better. All you have to do is look at our website to see how important happy customers are to us. Testimonials are everywhere as are pictures of homes they’ve sold and how much those sellers have saved. If being well-taken-care-of is your goal, you can’t do better than Help-U-Sell Honolulu Properties!

Back to Basics: What is the MLS?

The MLS is the Multiple Listing Service. It is the place were all of the real estate brokers and agents share all of their listings with all of the other brokers and agents who are members. It’s like a clearing house that makes it possible for an agent in one office with a buyer prospect to find a suitable home listed with another agent in another office. It’s a great tool!

Our Oahu MLS is operated by the Honolulu Board of Realtors and almost every real estate broker on the island is a member. It is a wonderful, up-to-date MLS that is so effective at matching buyers and sellers that today, more than 80% of all residential sales on the island involve two brokers and two agents who come together with a buyer and seller through the MLS.

At Help-U-Sell Honolulu Properties, we routinely put our listings in the MLS and make an attractive compensation offer to agents and brokers who may have a suitable buyer. We believe in the MLS and use it every day in our business.

But, there is down-side: it’s expensive. Think about it. You’re hiring an agent to list and sell your house. The agent works for a broker and both have to be compensated. But you’re also making allowance for that outside MLS agent and broker who may come in with the buyer – they have to be paid too. Ultimately that 6% commission has to be enough to compensate two brokers and two agents!

Of course, we don’t do it that way at Help-U-Sell Honolulu Properties. We charge our home sellers a reasonable set fee to list and market their property and to represent them through the process. We make allowance for the possibility that an outside MLS broker and agent will come in with the buyer, but if none is involved in the transaction, you, the seller, don’t pay for one!

It’s just one of the ways we are able to save our home sellers thousands of dollars in commissions. There are other ways, too. Truth is we save every seller thousands over what the’d pay an ordinary real estate broker no matter how their home sells. Before you pay $30,000 – $50,000 or more to sell your house, call us and let us show you how we can save you a lot of money without giving up anything.

The Supply of Homes For Sale on Oahu is Shrinking

There is an interesting metric used in the real estate business to evaluate the nature and health of the market. It is the ‘absorption rate,’ or the rate at which listings in inventory are absorbed by the pool of active buyers. It is calculated by first discovering how fast homes sold during the recent past – say, six months – and dividing that into current inventory. If we were averaging 50 homes sold per month over the previous six months and there are 300 homes in inventory today, that means that we have a 6 month supply of listings (300/50).

If all of that math makes your head hurt, don’t worry; to understand absorption rate you don’t have to know how to calculate it.

What does this mean to Hawaii home owners? The April 2016 absorption rate for Oahu fell by almost 12% over the previous year. In April of 2015 we had a 3.89 month supply of single family homes for sale. This April we had 3.48 month supply of homes for sale. I know the difference seems slight, but there is a trend here. Listing inventories have been slowly creeping downward for some time leaving us in a situation where there really aren’t enough homes on the market to satisfy the demand.

For condos, the decline is not so apparent: in April 2015 we had a 3.21 month supply and this year it’s 3.2 months. Condos continue to be an attractive and affordable option for new homeowners coming into the market as well as those seeking a more maintenance free lifestyle.

Here’s the thing: homes are selling, and fast. We have an inventory shortage; there are not enough homes on the market to satisfy the demand. In a ‘normal’ market, you’d expect there to be close to a six month supply of homes. Of course, here on Oahu, nothing much is ‘normal,’ so for us, four or five months would be pretty good.

For home sellers, this tight, low inventory market means that you have a good shot at selling for top dollar in a short period of time. ‘Top Dollar’ doesn’t mean overpriced. Even in the hottest markets, overpriced is still overpriced, and buyers rarely pay more than market value – or what an appraiser would determine the value to be – for a home. If you’ve been thinking of making a move, my advice would be to call in a professional – me – to help you determine what you are likely to get for you home today, and whether selling now is a good plan.

Buyers, I know it’s frustrating when the perfect home comes on the market and has multiple offers in a few days, but that’s what happens in a market like this. It is not a reason to withdraw from the process or to stop looking altogether. It is a reason to get your ducks in a row, your finances in order, your pre-qualification letter in hand, and be ready to move quickly when the right home appears. Prices will only be higher in another year and despite the competition today, this may be your best opportunity to own your dream home.

As always, we at Help-U-Sell Honolulu Properties are ready to bring the considerable talent, knowledge and creativity of our team of professionals to bear on your home buying or selling project. One of the things we do very well is to help people weigh the pros and cons of any real estate decision, and we offer that consultation to you with no obligation. All it takes is a phone call.

Make a Splash When Selling

Our Oahu real estate market is moving! Just when you thought homes couldn’t sell any faster, they do! March sales of single family homes were up more than 20% over last year. The same was true for condos. And prices continue to climb, though not at the astronomical rates we’ve seen in the past. Year over year median sale prices are up just under 4%. Clearly, your Oahu real estate is your best investment.

In this kind of market, it is important to think strategically when selling your home. You’ll want to sell quickly with a minimum of inconvenience and you’ll want to walk away with as much cash in your pocket as possible. How can you accomplish that? Some thoughts:

Know where you’re going. Understand that houses on Oahu sell quickly if they are properly priced. Right now the median priced single family home is taking less than 20 days to go under contract for sale! Closing can take an additional 30 – 45 days. In this environment, it is not wise to put your home on the market until you have somewhere else to go within 60 days.

Price properly. That means at market value. It’s tempting when homes are selling so fast to push the price up, ask for a little more, try to cash in big. But that strategy fails over and over. Home buyers have lots of tools today to spot overpriced listings and most avoid them. Your aggressive price will limit showings and encourage low offers. Instead, price at market value and then let the market set the price. What you’ll find is that a great home in a good location will produce offers over and above asking price. And wouldn’t that be a nice situation!

Prepare the property. The day your home goes on the market it becomes a product that has to compete with other similar products. Before you make your home available for showing, make sure it is breathtakingly clean, neat and staged. You want every person who sees your home to dream of living there and the best way to do that is to make the home dreamy.

Plan to make a splash. Sometimes it’s smart to create urgency and anticipation when selling. ‘Coming Soon’ signs prior to the actual listing period can accomplish this, but I sometimes suggest other strategies. Having the first day of showing coincide with a well promoted open house – a Grand Open House – can ensure that the largest number of potential buyers see the property on that first day. Sometimes I suggest that we hold off reviewing offers until the end of the first week. This creates a sense of urgency, a deadline, and sets the expectation that there may be a bidding war for the home.

Listen to your agent. When you hire one of the professionals at Help-U-Sell Honolulu Properties, you’re teaming up with a trusted consultant. We know this business and this market and there is no one better qualified to advise you every step of the way. Sometimes the emotion of selling can nudge you into poor strategic thinking. Our job is to help you stay focused on the business decision that selling a home should be.

Why Pay a % of Your Home’s Value to Sell? There is a Better Way!

For the most part, the ordinary real estate business exists in a percentage based universe. Real estate brokers and agents typically charge home selling consumers a percentage of the sale price of the property to sell it.

Stop. Think about that. Selling a piece of property is not alchemy; it’s not even mysterious. It is a fairly straightforward process of proper pricing, careful preparation and effective marketing. It takes a skilled technician to orchestrate this process, especially the very complicated contract-to-closing time frame, but like most jobs, it is a series of tasks, not neurosurgery.

So what does a percentage of your home’s value have to do with what it takes to sell it?

Here is the answer: absolutely nothing.

Percentage based pricing was conceived by the real estate industry almost 100 years ago, when selling homes really was a mystery to most people. It was a pricing system ‘plucked from air,’ or made up on the fly. Consumers didn’t question it because they didn’t understand what they were paying for.

If you fast forward through the decades, there have been huge changes in the real estate industry. Brokers began to cooperate with one another on sales and the Multiple Listing Service was born. The Internet matured and suddenly consumers had most of the information real estate professionals once controlled. Consumers became smarter and more savvy about the buying and selling process. Everything changed and the real estate industry began to travel at light speed.

What didn’t change? The way real estate brokers charge consumers! It’s the same tired, old percentage based model that made no sense in 1956, and makes even less sense in 2016. Dozens of tools have appeared that make it easier to sell real estate, but ordinary agents and brokers – due to ever rising home prices – have actually gotten a raise – a big one!

Consider Honolulu. In 1985, the median sale price for a single family home was $158,600. An ordinary Realtor charging, say, 6%, would generate a commission of $9,516. In 2015, the median was $700,000 and that same 6% commission would be $42,000! That’s a 341% raise in 30 years! By comparison, median household income in Hawaii in 1985 was $28,961. It is projected to be about $71,000 for 2015 (the exact figure will be released in September) – which is a 145% increase over 30 years. In other words, real estate commission have risen more than 2.3 times as much as median household income. That’s quite a raise!

I made the decision more than 20 years ago to become Help-U-Sell Honolulu Properties because it made sense. It made sense from an operational standpoint (we run our office very differently than the ordinary real estate brokers down the street.) It made sense from a service standpoint (we deliver the same full service other brokers offer – and actually , more – but we also save our home sellers significant money in real estate commissions). And it made sense from a pricing standpoint.

We charge consumers a Low Set Fee to sell their homes. The fee is based on what it costs us on average to sell a properly priced listing plus a reasonable profit. We charge the family in the $600,000 the same thing we charge the family in the $900,000 home. Everybody pretty much pays the same thing!

Our goal is always to sell the property, make enough money for it to be worthwhile (it is), and Save Consumers Thousands over what they’d pay an ordinary real estate broker. In fact, we get just as excited about the money our clients save as we do about the fees we earn!

Time to Refinance?

With mortgage interest rates stumbling and slipping a bit, lots of home owners are scrambling too refinance. Current rates are so attractive, we are in a bit of refi-frenzy. In fact, the number of mortgage applications nationwide rose 8.2% last week over the week before. 64.3% of those applications were for refinance purposes, up more than 3% from the week before.

The reason for this increased activity is a bit of a hiccough in interest rates. All of the experts expected rates to rise slowly this year – and most still insist they will – but here in March we have a dip. Today’s 30 year fixed rate is in the neighborhood of 3.8% and for a 15 year mortgage it’s just 3.1%.

Assume you have a $500,000 30 year mortgage at 4.25%. Your principal and interest payment would be about $2,460. Refinancing at 3.8% would reduce your payment by $130 a month, to $2,330. And, if you wanted to be bold and jump over to a 15 year mortgage, your new payment at 3.1% would be $3,477. I know $1,000 a month more looks like a lot but you’d be building equity much faster, your house would be paid off in 2031 instead of 2046, and you’d be saving about $250,000 in mortgage interest over the life of the loan.

My point is, if your current mortgage interest rate is more than 4%, this is an excellent time to take a look at refinancing. It may be right for you, and maybe not. The only way to know is to talk with someone who can give you the figures, the savings, the pros and cons. Of course, the best way to find an expert is to contact the professionals at Help-U-Sell Honolulu Properties. We’ve been helping Oahu homeowners build wealth and maximize their housing investments for decades!