Hawaii Real Estate Archives - Page 4 of 7 - Richard Cricchio's Hawaii Real Estate Blog

What to Look For in Home Owner’s Insurance

Homeowners’ Insurance is a very important aspect of any real estate purchase. Lenders generally require mortgagors to carry a policy to cover them – and pay off the mortgage – in the event of a total loss. It is wise to consider more than just lenders’ coverage when shopping for insurance because your home’s value and replacement cost are usually far greater than what the lender will require. Here are a few shopping tips for homeowner’s insurance:

Know What Your Policy Covers

A typical policy will pay for damage to your property and your possessions from storms, fire, theft or vandalism. It will usually provide liability coverage if someone gets hurt on your property and decides to sue. Often there is coverage for temporary housing, so you don’t have to face hotel bills if you’re temporarily displaced from your house.

Sometimes homeowner’s insurance can protect belongings outside the home, too. If something is stolen from your car, auto insurance won’t cover it—but your homeowners policy may. Many times there is coverage for your items when travelling. For example, if you were to leave your laptop in a diner, it might be covered by your homeowner’s policy.

Know What Your Policy Doesn’t Cover

A standard policy has exclusions, including earth movements (landslides, earthquakes, sinkholes), power failure, war, nuclear hazard, government action, faulty zoning, bad repair or workmanship, defective maintenance and flooding. Windstorms are typically covered, including tornadoes, although insurance companies sometimes exclude tornadoes or hurricanes in high-risk areas.

Water damage is tricky. As a rule of thumb, water from above (rainwater or a burst pipe in an upstairs apartment) is usually covered, but water from below (backed-up sewers or ground flooding) generally isn’t. In areas where flooding or earthquakes are possible, supplemental coverage is usually available.

Actively Work To Reduce Premiums

It may sound like common sense to have a working smoke detector, but did you know that it might also help you land a lower insurance quote? The same goes for a burglar alarm. According to industry experts, you can sometimes reduce your premium by about 5% if you install something as a simple as a deadbolt, and up 15-20% for a burglar alarm system.

Insurance companies price your premium based on how much risk they foresee, so you can reduce the premium by reducing your liability risk, thanks to some smart preventive measures.

Replacement Cost or Actual Market Value?

There are two key distinctions that every homeowner should know: “replacement cost” versus “market value.” Replacement cost covers repairing or replacing your entire home. Market value is how much someone would pay to buy your home and accompanying land in its current downtrodden condition.

When you’re considering the type of coverage to take out, a policy that’s based on market value is typically less expensive but will pay less in the event your home is a total loss or substantially damaged. A good compromise between the lower coverage of a Market Value policy and the higher premiums of a Replacement Cost policy might be a Replacement Cost policy with a high deductible, IF you have a good emergency fund in place.

File Claims Promptly

Many policies have a time limit for reporting certain kinds of claims, especially if the problem is made worse by waiting. For example, if you see a water problem and decide to take care of it yourself rather than report it and a month later mould sets in, you might have difficulty filing a claim. Always ask what time limits apply for reporting claims.

Keep Good Records

If you experience a loss, become obsessive about keeping track of the details. Keep every receipt, every note and document the steps you took to mitigate the damage. Every time you have a conversation about the claim, write down the date, time, person with whom you spoke and the gist of the conversation. Photos of the damage and the repair process can also be helpful.

Watch Out For Jewelry – Art, Too

Often limits for coverage on jewelry are different than on other items. If you have expensive pieces be sure that your limits are at least at their value. It would be a shame to lose, say, $8,000 worth of jewelry and then discover that your jewelry limits are set at $3,000! The same is true for art. If you have original pieces that are very valuable, they may require a special rider or separate policy. These are the kinds of things about which you must talk with your insurance agent during the purchase process.

Special Caution for Condos and Other Multi-Family Situations

Water damage is a particularly sticky issue in most multi-family housing units. Leaks are so common that many insurers limit what they will and won’t cover. Make sure you are covered should your upstairs neighbors’ leak affect your unit. Also make sure you are covered when your leak affects the units below you. Of course, the key issue is often whose leak is it? Generally speaking, if the leak is in the wall, it belongs to the HOA and repairs are their responsibility. If the leak is in a fixture – a faucet, feed line, toilet, tub drain, and the like – it is generally the homeowners’ responsibility.

The overall structure of your multi-family unit is usually covered by a policy paid by the HOA. It is important that you know what limits and deductibles apply on that policy before you buy. If your building is inadequately insured, you may end up with a big problem in the event of a loss.

A good checklist to use when talking with your Insurance Agent is located HERE.

Pricing to Sell

Nobody markets like we do.

When you list with Help-U-Sell Honolulu Properties, your home is presented to potential buyers everywhere. It will be in the MLS, in the local media, and all over the Internet – not just this website or that website but virtually every website buyers go to when looking for homes for sale, including our competitors’ websites!

Like I said – Nobody markets like we do.

But, marketing alone will not cause your home to sell. It takes a lot more. The home has to be in a location buyers find desirable (by the way: all locations are desirable to some buyers, it’s just that some are more desirable to more buyers than others). It has to be a style and floorplan that is workable for most families; and it has to be in good shape.

However, the single most important factor that makes a home marketable is price. In fact, one of the questions we are most often asked is how to price your home for sale. You have to hit the market with a proper price – which means one within the range of fair market value at the time of listing.

It does NOT mean a price that is too low. A price below market value tells buyers to be careful; there must be something terribly wrong with this house! And a price that is too high says your are not serious about selling.

It means a proper price. We work with our Seller Clients to establish a proper price by first looking at the neighborhood. We want to know the highest price for which a home in the neighborhood might sell and the lowest. In essence: we establish the boundaries of the neighborhood ballpark. Then we use comparable sales data to decide where, within that neighborhood range, the specific house falls: is it at the top of the range or closer to the bottom. We also consider the sellers’ objectives: are they wanting to move quickly or do they have months?

Ultimately, a proper price on a well-marketed home means a successful sale within the sellers’ time-frame; and isn’t that what every home seller wants?

Here is a short video about pricing that puts the concept of ‘Proper Pricing’ into perspective:

15 Year? Or 30 Year?

One of the decisions home buyers usually make is what type of mortgage to to use for financing. The old standard 30 year fixed rate mortgage is still king, but many are taking a long look at the upstart 15 year fixed as well.

Choosing the mortgage starts with qualifying. It is important to first understand how much house payment the lender will allow you to have and then to understand your comfort level for that payment. Many people, understandably, qualify for a payment higher than their comfort zone allows. A decision must be made on a target payment and then, based on that and the amount of down payment, the target price range.

The 30 year mortgage is often chosen over the 15 year because the payments will be lower, enabling a higher target price range. Sometimes an adjustable rate mortgage is chosen over the 30 year fixed rate for the same reason. But sometimes the best decision is to reduce the target price range and opt for the 15 year mortgage. Let’s look at an example.

Assume you are buying a $500,000 home, putting $100,000 down (20%), mortgaging the remaining $400,000. You are qualified for a much larger mortgage but you’ve selected the $400,000 target because the resulting payment more closely matches your comfort zone.

First, let’s deal with that Adjustable. Yes, you could save a couple of hundred dollars a month to start and for the first five years. But it is an Adjustable mortgage, and it will adjust – possibly up, possibly down – in five years. Because the rate will change, you really have no idea what the total of payments will be or how much interest you will pay over the life of the loan. Still, this has been a viable alternative for homebuyers who are stretching to buy the maximum house for the minimum payment, especially in situations where they are fairly certain they will not remain in the house more than five years. If $2,000 was your target payment, the Adjustable would enable you to take on $50,000 more mortgage, boosting your target price to $550,000.

The big comparison is between the 3o year and 15 year fixed rate mortgages. True, the 15 year costs $1,000 MORE each month, but . . . your home is paid for in 15 years and you will have saved over $200,000 in interest! Still, that $1,000 looks large . . . but maybe if you reduced your target price by, say $50,000 – which would drop the payment to $2,440, it would be worth the extra money each month! Or maybe, since you reduced your target payment closer to your comfort zone, you could regard the higher payment – for which you qualify – as a kind of forced savings plan. Paying $1,000 more each month on your mortgage accelerates your accumulation of equity and facilitates the rapid development of a strong financial asset: your home!

The point is this: a mortgage is a critical piece of your financial life. It is a tool to be used to help you accomplish your financial goals. When making mortgage decisions it is important to get expert advice; and that’s what we offer you at Help-U-Sell Honolulu Properties. If you are weighing a mortgage decision, we’d be delighted to help you evaluate your options.

Where Re-Sale Houses Fail: What’s Apt to Break

I saw an interesting advertisement this week for American Home Shield, the home warranty company. The ad was specific to California but has lessons for Hawaii too, I think.

American Home Shield is one of the larger Home Warranty companies. They provide policies to homeowners – usually people just closing on a home – that cover the failure of various systems in the house during a specific period. Normally you’d get a home warranty if you were buying a resale house that had a few years on it so that you’d have some protection if the air conditioner failed during the first year.

Last year, AHS spent more than $40 million fulfilling service requests from its California customers. What is interesting is what the money was spent repairing. Here’s the breakdown:

Appliances – $13,063,685 32.3%

Plumbing – $10,414,745 25.7%

Air Conditioning – $ 8,178,977 20.2%

Heating – $ 4,550,396 11.2%

Pool/Spa – $ 2,717,506 6.7%

Electrical – $ 1,286,154 3.1%

Other – $ 237,548 .58%

I think it is interesting that almost a third of the money spent on claims goes to repair or replace appliances. Of course some appliances are built in: dishwashers, disposals, some stoves and so on, but many are not attached to the house and are therefore something to be bargained over during purchase: refrigerators come to mind. The point is this: if you are buying a house including appliances and DON’T plan a kitchen remodel, check them out thoroughly. Ask for owner’s manuals and any existing warranties. And before you walk away from a home you really want because the seller won’t throw in a ten year old refrigerator . . . well, maybe you don’t really want that refrigerator at all!

Number two is plumbing. This is a biggie and makes a Home Warranty an important part of any home purchase. So many unseen events can compromise plumbing – things even a home inspector won’t find – that having a little protection is a good idea. And plumbing repairs – whether it’s digging up a drain clogged by tree roots or dealing with the water heater that fails and floods – can be expensive. I am struck by the fact that 25% of the money spent on claims was for plumbing issues!

The rest of the list probably doesn’t bear much dissection. There are two things, however:

Just 6.7% spent on pools and spas. The low number is because there are relatively few pools and/or spas and because Home Warranty coverage of these things is usually an option at an additional cost.
And just half of one percent spent on items other than the six that preceded ‘Other.’

I think, if you are buying a home, you now have six major systems you need to examine closely. If there’s going to be a problem, it is probably going to be here. The best way to do this is to hire a professional home inspector to go through the home with a fine tooth comb. Make sure the resulting report covers the big six.

As an aside, there is a great truth about home inspections: they are very valuable AND they always turn up something. Don’t expect your home inspection to result in a ‘clean’ report. There’s no such thing. When you get the report, go through it carefully and rationally. Most items will be minor and not worth even addressing. If there is something major it can become a negotiating point between you and the seller.

Finally, we’ve been looking at information from American Home Shield, one of several reputable Home Warranty companies. I always recommend a warranty on a resale property. The last thing you want your first year in your dream home is a costly repair bill for an unforeseen problem! Warranties usually cost between $300 – $500 and can cover one to two years. Often they are extendable.

Q & A: All About Help-U-Sell

How Does Help-U-Sell Work?

We’re a real estate company, but our business model is very different. The difference is largely behind-the-scenes and our clients usually don’t notice any difference between what we do and what they are used to from a great real estate company. The truth is: we do everything any other real estate company does – put your home in the MLS, market extensively, prepare virtual tours, feature your home all over the Internet, and much more – but instead of a BIG percentage commission, we charge a Low Set Fee. The Fee is a lot less than what others charge and it works for us because we organize and run our office differently than other real estate companies.

What is a Set Fee and Why Do You Charge For Your Services This Way?

A Set Fee is exactly what the name applies: a dollar amount commission that is Set: everybody pretty much pays the same amount regardless of sale price. Other real estate companies charge a percentage of the sale price – say, 6%* – so the family in the $450,000 home would pay $27,000 to sell and the family in the $550,000 home would pay $33,000 for the same service. Of course that makes no sense at all.

We know what it will cost to market a properly priced listing on Oahu and it doesn’t vary much by price range. So we add a reasonable profit to that figure and that’s our Set Fee. The fee is slightly higher for very expensive properties because time on market and marketing expense are usually greater, but the bottom line is the same: Everybody who sells through Help-U-Sell Honolulu Properties saves thousands over what they’d pay an ordinary real estate company.

Do I Have To Do A Lot Of The Work?

No. We do everything. However, you can save even more if you find your own buyer. So – if you’d like – you are welcome to do a little promotion on your own. Some of our listed sellers take flyers to the office or distribute them to friends and neighbors and find their own buyers this way. Others hold their own open houses. But none of this is required. We can do it all for you and you’ll save thousands over what others charge. Our competitors often say we are a For-Sale-By-Owner company and our sellers have to do everything. That couldn’t be further from the truth! We are a full service real estate company and we do everything other real estate companies do, but we also allow for money saving options for our home sellers.

What Am I Giving Up?

Nothing. We are not like a discount store where you get a good price but lose a lot of the nice amenities that go along with shopping with a major retailer. We are like the major retailer, with all the frills, bells and whistles. Our difference is in how we run our office.

What Does It Cost Me To List With You?

Nothing. We don’t charge an up-front fee. Our fee is due at closing; so if your home doesn’t sell (which is very rare for us), no fee is due.

Why Doesn’t Everyone Do It This Way?

There has been little change in the way real estate companies run their businesses in more than 50 years. So many people have to be paid out of that big percentage based commission they charge that it would be almost impossible for them to charge differently. We’ve changed all that. We run our office differently and market more efficiently. And, we pass the savings on to you, the consumer. Help-U-Sell Honolulu Properties is the NEW way to sell your home, and save.

See What Our Clients Say About Us

*Real estate commissions, whether percentage based or set fee, are not set by law, custom or Realtor consensus. They are fully negotiable between the consumer and the broker.

Do You Need MLS To Sell Your House?

There is a little controversy right now about the concept of a ‘Pocket Listing.’ There have been a number of recent news and opinion pieces, mostly from Realtor groups, condemning the practice of keeping a salable listing out of the MLS. Before I tell you what I think, let’s examine the Realtor point-of-view.

Since the advent of the MLS, the residential real estate business has operated on a cooperative basis. Because most MLS membership agreements require that every home listed by a member broker be offered for sale with an MLS listing (unless the seller signs an op-out waiver), every Realtor has an opportunity to sell any property listed with a competitor and earn a portion of the commission.

This is marketed as being in the best interest of the seller because it maximizes the opportunities for exposure of the home, getting it in front of more and more potential buyers through their individual agents. And after all, whether another Realtor comes in with the buyer or the listing agent finds the buyer him or herself, the cost to the seller will be the same; it won’t cost any more.

And that’s where the problem lies – real estate commissions are HIGH because each one is designed to compensate an outside broker and agent whether they are involved in the sale or not.

In general, when a seller lists with a traditional broker, he or she agrees to pay a percentage based commission. The actual percent varies, but will often be in the 5% – 7% range. Let’s consider something right in the middle, say, 6%. On a $500,000 home, that’s a $30,000 commission! Huge, right!? But one of the reasons it is so high is the listing office has to be prepared for the likely event that an outside broker and agent will bring the buyer – and, generally, they’ll be paid half of that commission. Of course, if there is no outside broker, if the listing broker finds the buyer his or herself, the seller still pays $30,000 because . . . well because that’s just the way it’s done!

At Help-U-Sell Honolulu Properties we don’t charge a percentage based commission, we charge a Low Set Fee. And, we unbundle commissions. If there is no outside broker involved, you don’t pay for one. Now that’s a real benefit to a home seller, one you can put a dollar sign on!

My opinion? I don’t think this needs to be an either/or question. How about flexibility? That’s why we put most listings in the MLS but only charge our sellers for an outside broker and agent if they are involved in the sale. If we sell the house without an outside MLS broker, the seller doesn’t pay for one.

And, if your home is very marketable and priced well, we have no problem holding it out of the MLS so you can save the most on commissions. Often, what I recommend is that we start without MLS and if we don’t have an offer or sufficient activity in 30 days, then go into the MLS and offer the home for sale through outside brokers.

At Help-U-Sell Honolulu Properties, we are about two things:

Getting your house sold for top dollar
Saving you the most money in commission expense

We will consult with you at the time of listing and continuously thereafter about how best to market the home, whether an MLS listing makes sense or not, and how to maximize your savings while selling for the greatest possible price.

Yikes! Here Come The Termites!

Your home is more than a place to live. It is the center of your family, your lifestyle, your world. It is also a powerful investment, consistently creating wealth at a rate greater than any other investment vehicle. It makes sense that you’d want to protect this key part of your world with insurance for fire, theft and cataclysmic damage. Meanwhile, you may be experiencing serious damage to your home at this very moment, damage that is not covered by your homeowner’s policy: termites!

Yes, we have termites in Hawaii; and while there are dozens of species, there are only two that are known to attack structures: the Formosan Subterranean Termite and the Drywood Termite.

The Formosan Subterranean (or Ground) Termite is rarely seen until the damage is done. This is because it lives in the ground and, once it gains access to your wooden structure, it works deep within the wood it infests. Like all termites, this one lives on cellulose, which is contained in all plant matter. The wood used in your home is a cellulose bonanza to a termite! As the Ground Termite devours the cellulose in the studs, rafters, beams and flooring of your house, the strength of the wood degrades and the structure becomes unsound.

The best way to protect yourself from the Ground Termite is to eliminate all instances where the wood in your house comes in contact with the ground. For example, wooden pillars supporting a deck should be on concrete pads elevating the wood above the level of the ground. Slabs and concrete footers should be in good shape because a crack can provide all the access a termite needs to the wood above. Avoid stacking and storing wood of any kind directly on the ground. Also, be careful with trees and plants close to the house. A termite may gain access to the wooden eaves around your roof by way of a tree that touches.

The Drywood Termite usually arrives by swarming, usually in June or July. Favorite point of entry are wooden door and window enclosures, and any wood is vulnerable whether in contact with the ground or not. The Drywood Termite works much slower than the Ground Termite and leaves behind tell-tale piles of wood shavings. It does eat the wood, but also burrows into to it to make a place to live. The shavings are the result of this burrowing.

A wise bit of insurance to add to your cadre of policies is a Termite Contract. For a monthly fee, a termite specialist will inspect your home and spot treat as needed throughout the year. While spot treatment is certainly a benefit, the regular inspection by a professional can be instrumental in stopping an infestation before damage becomes severe. At Help-U-Sell Honolulu Properties we have several Termite companies we recommend and would be pleased to help you make that connection.

When Should You Refi?

Consumer attitudes about mortgages have shifted over time. In the early decades of the 20th Century, most considered a mortgage to be one of the worst things you could have. The banker dressed in black with top hat who comes to foreclose on the farm became one of the archetypal villains of the Great Depression. After World War II, Americans became comfortable with the concept of using ‘Other Peoples’ Money’ for big purchases, and mortgages became a standard for almost everyone. Veterans, returning from the war had VA benefits, which included a no-down payment VA loan, and their home purchase activity fueled the post war economy.

The early ’80s presented a new challenge. A shaky economy drove interest rates through the roof. Where 7% and 8% loans had been common, now rates crept up to 12% and 14% and finally peaked at about 17%. Can you imagine? 17% on a 30 year fixed rate mortgage! Let’s make that real by comparing a $300,000 mortgage payment then with one at today’s good rates (we’ll use 4.25%). Today the payment would be $1,476. Back in 1982 at 17%, it would have been $4,277! The interest rate crisis was not all bad, though. It produced innovation. Consumers moved increasingly to adjustable rate mortgages that could be had at slightly lower initial interest rates.

In those early years there was lots of trepidation about the uncertainty of ARMs. People worried bout being locked into a mortgage that would always be going up. Smart Realtors helped people understand that the high rates of the day were temporary, that they certainly would come down in the future. They suggested that the uncertain Adjustable Rate Mortgage be viewed as Temporary financing that would be replaced with a better loan when rates improved. This was the birth of the modern refinance strategy.

During the real estate bubble run-up, refinancing became a regular ritual for many consumers. Houses were appreciating rapidly and refinancing created funds that could be used to remodel or pay down other debt. Refinancing became a way to afford a lifestyle. But that all came to an end when the bubble burst, real estate prices fell and foreclosures once again became common.

Today our Oahu market has rebounded. We’ve reached a state of comfortable equilibrium in the housing market. Houses appreciate and people are able to buy and sell them. Interest rates remain historically low and it still might be a good time to consider refinancing if it fits with your financial goals. Because goals are very personal there is no pat answer about whether you should refi or not. Only you can decide that, and if you’d like help sorting out what makes the most sense, we at Help-U-Sell Honolulu Properties would be happy to help. Our consultation will be free and you’ll leave with a plan to use your mortgage to help achieve your financial goals.

In the mean time, MSN Money created a refinance calculator that can show you how refinancing might affect your current situation. It’s easy to use, and you can find it HERE.

Of course if moving up to a larger home or ‘right sizing’ to something a bit more cozy is what you need to do we can certainly help with that. Call us at (808) 593-8811 and let’s get started!

Help-U-Sell On Air

One of the most enjoyable things I do in my real estate career is my weekly radio show. Every Wednesday morning, I’m on air with Rick Hamada at KHVH 830 am for an hour of real estate conversation.

I usually give an update of any significant developments in the local market, talk about a specific issue or two relating to housing, and take calls from the audience. It is an entertaining and informative segment that enables me to interact with thousands of people I might otherwise not meet.

The radio program has enhanced all of my marketing in a way I never expected. When a consumer sees one of our listings or picks up our magazine, or even sees us on the Internet, they have a moment of recognition: ‘Oh, I know this guy! I’ve heard him on the radio!’ That connection lends a degree of credibility to my marketing that makes it much easier for consumers to call me.

Beyond the vanity aspect and marketing value, I’m proud of the radio program because it has given me an opportunity to help Hawaii home owners and buyers understand our market and the real estate process better. After all, I have been at this for years and have a lot to share. The radio show gives me a vehicle for that.

Next Wednesday, why not tune in to 830 am in the morning and catch the show? Better yet, why not call in with a really good question?

By the way, an archive of past shows is located HERE, along with a collection of my video real estate Tips.

Is Flipping For You?

With real estate on the upswing in most parts of the country – and certainly in Hawaii – there is a lot of flipping going on. You know flipping, don’t you? That’s where one person (or a group) buys a house, does a little impressive remodeling, then immediately sells it for a nice profit.

To be a flipper, you have to know how to evaluate a home’s potential for value gain after fix-up, and you need the resources necessary to carry the project for both the remodeling time and the marketing time. It can be an excellent business that often pays big rewards. For example, consider a $400,000 condo built in the mid-80s with little updating since. The flipper might offer $340,000 cash for it, invest $30,000 on remodeling, and sell it for$425,000 – a profit of $55,000 that likely occurred in a 4 – 6 month period.

But, flipping certainly isn’t fool proof. Some flips simply flop. Perhaps the condo has defects that are not easily spotted that must be remedied. Perhaps the HOA has strong restrictions about how remodels are handled, adding cost. Maybe, even after remodeling, the house won’t appraise for the higher value. Like all investing, flipping comes with risk.

But the question you probably have at this moment has nothing to do with flipper at all. It has to do with the flippee: why in the world would a person with a home worth $400,000 take $320,000 for it and walk away from that big piece of equity?

The alternative would be to put it on the market for $400,000 and then just sell it! But then you have to allow for commission, which would be about $24,000 if an ordinary broker is employed. Of course, at Help-U-Sell Honolulu Properties, we charge much less: $18,250 less, to be exact! Our fee to sell a $400,000 condo is just $5,750.

But back to our example: let’s deduct $24,000 from the price for commission and, since the house is clearly in need of some work, let’s allow $10,000 for that. And, since the price puts it in the range most cash poor first time buyers would consider, we probably ought to plan on paying some closing costs. Let’s allow $6,000 for that. Now, that $400,000 price will really mean $360,000 – and that’s IF we get a full price offer! Dollar for dollar that Flipper’s offer is just $20,000 less and requires no pre-marketing prep, no repairs, no open houses, no inconvenience, nothing! Basically, you’re handed your cash in about 30 days and you’re done!

Though it is still a rare home owner who will agree to a flipper’s terms, some are choosing this option. It all depends on your goals and what’s important to you. Of course, Help-U-Sell Honolulu Properties might make the difference for some sellers. If we handled the marketing on that $400,000 condo for just $5,750 . . . suddenly the gap between the flipper’s offer and selling it outright is bigger: almost $40,000 – and that’s enough to offset any level of ease and convenience the flip offer brings.

If you are approached by an investor who wants to flip your house and you are uncertain what’s best for you, call us. We’d be happy to discuss your situation, review your options and help you make a good decision.

How to Get the MOST for Your Property

Pricing is so important when selling real estate. In fact, the marketability of your home depends largely on the price you set the day you put it on the market. Honestly, the best advertising in the world can’t cause an overpriced listing to sell. Neither can an army of top salespeople. However, a properly priced listing will usually sell quickly at or near the asking price.

When you put your home on the market, you are unveiling it to a pool of buyers who are already in the market looking for the right house. They’ve been looking for some time and just haven’t found what they are looking for yet. Yours might be perfect for some of them. These buyers – all buyers, really – evaluate a new listing on at least three criteria: the location – is it in a place they’d consider living? the floorplan – does it have enough beds and baths? and the price. If any of the three is not in line with their wants, needs and capabilities they usually opt not to see the home.

That’s why it is so important to hit the market with a proper price, one that is in line with neighborhood values as established by recent sales and is adjusted for the trend in the market. I think most people understand the concept of using recent sales (comparables) to establish price: if a similar house three doors down sold for $550,000 two months ago, this house must be worth something near that. But the trend is also important. That house that sold two months ago? That’s the date the sale closed. The buyer and seller agreed to terms (and price) some time before that – usually two to three months before. If you are in a neighborhood where values are rising 1/2 % a month, that’s 5 months of appreciation that must be considered. We should be looking at that recent sale as if it were worth $13,750 more: $563,750! And though it is rare in Hawaii, sometimes the trend is down instead of up.

When I work with sellers on pricing, I like to first establish the range of value for the neighborhood: what’s the top of the market and what’s the bottom? These are the ‘boundaries of the ballpark’ in my mind, the limits we don’t want to exceed in either direction. Then we zero in on the specific house in question and locate it within that range. At first, we consider the range of value for the house – say it’s $540,000 – $570,000. It is a range because many other factors influence price. For example, a family that needs a fast sale would probably want to price lower in the range, while one that has all the time in the world might price on the high end within the range. $585,000 would be way too much – and that initial unveiling period I mentioned earlier would be lost.

As a home seller there are a few things you can do to help potential buyers see your home as being worth the price. They are simple things, really, and I’ve covered them in the short video below. If you are curious about your home’s value in today’s market – even if you don’t want to sell right now – we at Help-U-Sell Honolulu Properties would be happy to do the research and give an opinion. Call (808) 593-8811 or use the easy form below.

Category: Hawaii Real Estate