Category: Hawaii Real Estate

How to Shop for a Home in Today’s Market

Flashback: 1999

Sunday morning is spent with the classified section of the newspaper spread on the kitchen table.  Bob and Sue are circling ads for homes that might meet their needs.  They have been at this process for several weeks and have it down to a fine science.  The current pool yields five that might work, which means five calls to five real estate agents, one of whom is sharp enough on the phone to set up a showing appointment.  Bob and Sue like this agent and spend the next four Sundays looking at houses with her, eventually buying one.

Those were the days when the primary value of a Realtor was providing access to proprietary information about homes for sale.  Without the help of this kind of gatekeeper, home buyers had a very difficult time finding properties.  There was no Internet, no public property portals, no readily available information on past sales and so on.  The only way you found a home on your own was by reading classified ads or noticing for sale signs.

Today it’s very different!  Public websites like Trulia, Zillow and Realtor.com have put all of the information about homes for sale in the hands of consumers.  Though the data on those sites is somewhat flawed and often out of date, we are fortunate here on Oahu to have the home search capabilities of our Help-U-Sell website.  Connected directly to the MLS, it provides consumers with the most up-to-date and accurate information available.  We give you ALL the information on houses for sale because we believe house hunting should be a partnership.  Many of our home buyers participate in the home search process, searching online for possible matches and giving feedback on properties we select for them.  They like to be involved in the home search process.

This new breed of home buyer relies on us to make sure they don’t miss something new or not on the public portals.  They also look to us for information on neighborhood values, past sales, planned development and so on.  Often these buyers want to drive by a property that seems appealing before actually making an appointment to tour it – another reason to make sure you are maximizing curb appeal when you house is on the market.  With this level of home buyer involvement, house hunting time has diminished as has number of properties toured before making a decision.

When we encounter a new home buyer, one of the first things we do is have an in-depth conversation about their housing objectives.  We want to understand not only their wants and needs about floor-plans, house styles and neighborhoods, but also what’s most important to them from a lifestyle and location standpoint.  We also help them understand their borrowing capability and fine tune their price range expectations.  If they’d like to participate in the search process, we set them up with a website account which gives them  access to properties in the MLS.  This lets them search for homes for sale just like an agent.  We search as well, communicating frequently about what’s available and what might fit their needs.  We tour homes that seem to match until the right one comes into view.  It might be the first home we tour or the fifth or the fifteenth.  All the while we are answering questions about construction, zoning, financing, potential improvements, neighborhood values and so on.

From that moment on we are constructing an offer, negotiating with the seller, arranging for financing, setting up and managing inspections, collecting required paperwork and orchestrating all of the details that enable a closing to take place.  It is a complex and at times confusing process that ends with smiles all around as the keys are passed to the buyer at the closing table.

Today, the value of an agent is so much more than simply providing access to information about homes for sale.  We still do that, but we do it with great new consumer oriented tools.  Our primary value, though is in helping our buyer clients make really good decisions and then navigating everything that needs to be done to manifest those decisions.  We’d love to help you in your home search.  Call us today for a free, no obligation consultation.

 

Living in a Rental? GET OUT NOW!

You’re a first time home buyer. You’re not sure if owning a home is right for you.  You have questions – we’ve got answers.   Starting at the beginning, let’s consider the question of Why:  Why should you consider becoming a homeowner? We will get to the quantifiable benefits in a moment – the numbers – but let’s examine some of broader truths first.  The greatest single financial asset most Americans have is their home.  The largest portion of Net Worth is usually housed in the equity people create and build in their homes.

Building Net Worth

Building equity becomes the springboard to moving up to bigger and better housing.  Today it may seem difficult to find the $14,000 or $18,000 you may need to buy your first home.  But in five years, when you are ready to trade up, it won’t be.  You’ll have $75,000 – $125,000 in equity in your current home and that’s where your down-payment will come from. Most people trade up a time or two and then temporarily ‘settle,’  staying in  a home for an extended period of time, focused on paying down the mortgage – which creates even more equity.  Now, equity in the home becomes financial power.  It can be borrowed against to finance everything from home improvements, purchase of rental property, college tuition or even retirement. To contrast, as a tenant, you have nothing more than the certainty that your rent is going to go up. You’ll pay it, but you’ll be building nothing.  In fact you’ll be helping your landlord build wealth instead. As long as you are going to have to pay for housing (few of us have found an acceptable way to live for free), you might as well pay for housing that grows in value, creates wealth and purchasing power for you.

Sense of Place

There are financial reasons to buy, sure, but there are other reasons to buy, softer reasons. Because they are living at the will and whim of a landlord, tenants tend to move around more often than homeowners.  There is a near transient lifestyle that goes with renting that rarely exists with home ownership.  As a homeowner, your children can grow up knowing they grew up there, in that house, played in that tree, slept in that room and so on. You decide when and what color to paint the living room and how you’ll remodel the kitchen.  This sense of home – being a place in which you have set down roots – is a great emotional reason to be a homeowner.

Tax Benefits

Currently, mortgage interest on your principal residence is fully deductible on your Income Taxes as are the real estate property taxes you pay.  The best way to illustrate this is with an example. Let’s assume you are renting a nice 2 bedroom apartment, paying $2,000 a month.  You are thinking of buying $440,000 home using an FHA Mortgage with minimum down-payment.  Homeowner’s Insurance on the new home will be about $800 a year and property taxes will run about $4,000.  Here is how the numbers break down: Downpayment:  $14,000 plus any closing costs.  Most will likely be paid by the Seller, but you should still be prepared with a few  thousand dollars to set up impound accounts for taxes and insurance and any other expenses not covered by the Seller.  Estimated cash needed to close:  $17,000

  • Mortgage Amount: $386,000 + FHA Funding Fee (UFMIP) $6,755 = $392,755
  • Mortgage Payment (30 year fixed rate at 4.5%):  $1,990 principal and interest
  • Taxes: $4,000 / 12 =  $333/ month
  • Insurance: $890 / 12 = $67/ month
  • Mortgage Insurance:  $434/ month
  • Total Payment:  $2,824

It would appear that owning that home will cost $824 a month more than staying in the apartment . . . but appearances can be deceiving.  Let’s look at this example after tax savings. You’ll be paying $33,888 in mortgage payments the first year to live in the new home ($2,824 X 12).  But, believe it or not, $17,544 of that will be mortgage interest, all of which is tax deductible!  Also, your property taxes of $4,400 are deductible for a total of $21,944 in tax deductions.  Assuming your income is sufficient to make this purchase possible, you are likely in a 25% tax bracket.  So the $21,944 in deductions translates to about $5,486 less in income taxes you will pay, all because you bought a house!  $5,486 / 12 =  $457.16 a month. Now take that $457.16 in tax savings and apply it to your total housing payment of $2,824 a month and your net housing expense is $2,366.84.  So for $366.84 a month more than your rent payment, you can leave that apartment and have a nice $400,000 home. 

Investment

But that’s just the beginning.  When you buy a home, you’re investing in real estate.  I feel comfortable saying that because historically, real estate has gained value over time.  Contrast that with, say, your car, which depreciates about 15% the moment you drive it off the dealer’s lot!  Appreciation rates can vary greatly year to year, but over time have been fairly predictable.  Typical U.S. appreciation for houses has been in the 2.5% – 3.5% per year range and it has been historically higher here on Oahu.

So let’s assume you buy that $400,000 home today and keep it five years before selling it to move up.  What will it be worth?  Bear in mind, nobody knows what appreciation will be, so the best we can do is guess, conservatively.  But let’s guess home values increase an average of 3% per year over that period. Your $400,000 home will be worth about $463,700.  A $63,700 increase in value. During the same period you will have paid your mortgage balance down to $358,027, so your Equity (the amount of wealth you will have built) will be almost $105,673. You got into the house with $17,000 and five years later have $105,673.  That’s a 621% increase in your housing fund! How can that be?!  It’s simple:  you are benefiting from an increase in the house’s value, which includes the $392,755 you originally borrowed to buy it.  You’re not only getting the increase based on what you put in, your getting in on what you borrowed as well!  Now that’s how to effectively use Other People’s Money! You’re a first time home buyer. You’re ready to get serious about your financial life, to begin building something for yourself and your family rather than for your landlord, give us a call.  We’ll help you discover what you can afford and show you how we can get you started on your own real estate journey NOW.

Build Wealth with Real Estate

Meet Troy and Tanya.  Seven years ago they were interested in building wealth with real estate. They bought their first home, a condo near Pearl City, for $325,000 on a minimum-down FHA loan.  Four years ago, they rented that place and bought a single family home for $450,000.  Today they are looking at an even nicer house for $600,000.

By carefully buying real estate to live in and to rent, they now have about $230,000 in equity in the two properties. They have achieved that in 7 years with about a $70,000 investment in down payments and closing expenses for the two houses.  When they buy the new home, they’re going to, once again, keep the old one and rent it out.

And this couple is in their early 30s!  Can you see how, over the next 30 years, they could become at least comfortable if not wealthy by buying, selling and renting real estate?  

Their story is not unusual: there are dozens of Troys and Tanyas who have figured out that  real estate is their best investment.  For generations it has been the principal way in which American families build financial stability and independence.  Carefully orchestrated, real estate can be a wealth building tool, but the key is to get started!  Whether you are in your 20s, your 30s, or even your 40s, it is important to develop a vision for your real estate future and then create a plan to achieve it:  a Real Estate Plan.

At Help-U-Sell Honolulu Properties, one of the most gratifying things we do is help families secure their financial futures through real estate. It is something we are very good at and we’d welcome the opportunity to help you.  The process starts with a consultation – more of a conversation, really – where we talk about your goals, your financial situation, and your future.  There’s no cost or obligation and at very least you’ll leave with much more information than you have now.

Like Troy and Tanya, you may find that your house can be more than a great home.  It can be the best piggy bank you’ve ever imagined!

(Troy and Tanya are composites of a dozen young couples we’ve helped through the years. Their story is typical and is based on a prevailing interest rate of about 4.5% and average annual housing appreciation of 3.5%.  Housing does increase in value over time and mortgages do get paid down, creating equity.  Call us today and let’s get started building wealth with real estate for you!)

For Sale By Owner?

The For Sale By Owner option can be very attractive to some homeowners. They are sure with a little advertising, they could find a buyer on their own without the heavy expense of a Realtor’s commission. Think about it: if your home is worth $450,000 and you’ve agreed to pay a commission of, say, 6%* . . . well, that’s $27,000! And maybe you have just $80,000 in equity in your home. Suddenly that $27,000 commission is equal to 33.75% of your equity!! Surely you shouldn’t have to give up that much just to get your home sold!

There are, however, a number of reasons why you might want to be cautious about going For Sale By Owner, notably:

Safety. How will you know who is walking through your home? How will you protect yourselves and your valuables? Perhaps you are giving a tour to someone who may return when you aren’t there.

Financial and contractual protection. How will you protect yourself in a legally binding contract negotiation? Are you so knowledgeable about real estate law and finance that you can avoid making costly mistakes? Unless you are in the business everyday, negotiating a real estate deal on your own behalf is a little like attempting to fill your own teeth when you have a cavity!

Marketing know-how and ability. As a For Sale by Owner you can advertise your home in the paper, and on Craig s List. You can put a sign in the yard and hold an open house. But can you mount a comprehensive marketing campaign that puts you in touch with dozens, even hundreds of local buyers, any one of which might be perfect for your home? That’s what we do at Help-U-Sell Honolulu Properties. Getting the best price and terms for your home is a function of exposure: the more potential buyers who are exposed to the property, the greater your chances of getting top dollar.

Access to your ‘Best Buyer.’ As a For Sale By Owner, you can find some kinds of buyers. You can find the local trade up buyer. They’ve been looking for a year for the perfect home, and one of their top requirements is: it’s got to be a bargain! Plus, they have a home to sell before they can close on yours! And you can find the investor. You know: he wants to pick up your home for 80% of value, remodel the kitchen and ‘flip’ it for a nice profit! What you probably can’t find as a For Sale By Owner is the capable and ready-to-buy out of towner, moving to Oahu from somewhere else. They almost always work with Realtors – and are usually your Best Buyer. Think about it for a moment: if you were moving to a strange city, would you trust yourself to find the right house in the best neighborhood for a great price? No, you’d probably seek professional help.

Usually, when a new For Sale By Owner sign goes up, dozens of Realtors show up wanting to list the property. I find that often, after a few days, most such sellers agree not to list, but to pay any agent who brings an acceptable offer a normal buyers side commission. In our $450,000 example that would be $13,500 – with no representation, no marketing, no protection at all.

What they don’t realize is that with our Low Set Fee pricing, they could get the FULL SERVICE of a licensed professional Realtor for LESS than even that $13,500!

We are different. We charge less … a LOT less. And we get the job done. In more than ten years I don’t think I’ve ever heard a home seller gasp when they saw our fee on the closing statement. Instead, they usually smile, nod and say ‘Thank You!’

Before you try to go it alone with no help, no expertise, no marketing and no protection, find out what we can do for you for a Low Set Fee. I think you’ll be pleasantly surprised.

How about getting started with a Free Home Evaluation? We’ll be happy to provide a market analysis and have an objective conversation about the pros and cons of For Sale By Owner.

The Truth About Help-U-Sell

I talk with Oahu residents – and even people who don’t live here – about Help-U-Sell all the time.  I am excited about who we are and what we do and love to share that.  I am often surprised by what people think they know about us though.  The misconceptions seem to have a life of their own and though we’ve been operating successfully for more than 10 years, I encounter them almost daily.  Some of the most common misconceptions are:

Help-U-Sell is a For Sale By Owner Company –  No, we are a Full Service real estate company.  We do everything every other Full Service real estate company on the island does and a lot of things they don’t do!

You have to do a lot of work yourself if you list with Help-U-Sell – No, Full Service means Full Service and we do hold open houses, manage inspections, market heavily, hold hands, anticipate and solve problems and manage our transactions like mother hens all the way to closing!

You have to pay Help-U-Sell up front!  – No, our fee is due at closing; so if your home doesn’t sell, you don’t pay us.  It’s the same as with almost any other Full Service real estate company.

Help-U-Sell people aren’t real agents! – No. Just like almost any other agents working on Oahu, we are licensed by the state and belong to the State, Local and National Association of REALTORS.  We are as real as a Realtor can be!

Well, with Help-U-Sell, you get what you pay for! – No, no and no.  This statement implies that we are a stripped down discount service, the Yugo of real estate.  We carefully analyze your home and the market and make pricing recommendations, advise you about sprucing up, put your home in the MlS and all over the Internet, we stay in touch, arrange showings, present and advise you about offers, estimate your net proceeds, manage the transaction to closing and on and on.  We charge less NOT because we’ve stripped service out of the equation, but because we run our company very differently from the way others are run.  It’s a new way to sell real estate that saves sellers thousands!

Here is a 90 second video that explains who we are concisely:

Getting On The Same (House Hunting) Page

Sometimes I work with couples to help them find  their dream home, only to discover that they have different dreams!  What’s important to one is not important to the other, or worse, is at odds with what the other wants.  When two people have different ideas about what they are looking for, househunting can look more like arm wrestling!  It’s important for everyone to be on the same page before the hunt begins, and for this reason I offer the following exercise:

Begin separately.  Each person sits down alone and competes the Wants & Needs Assessment:.

House-Hunters-Wants

Sit together and review the exercise.  The first three questions are easy and will likely produce some agreement.  The real work begins with the lists of 10 items.

First, cross off any items on which both parties agree.  Then note any items that conflict.  For example, if one list says ‘One story, NO STAIRS!’ and the other says ‘Split Level or Two Story,’ . . . well you can’t have it both ways.  Don’t Debate these, just circle them.

Now you have three kinds of items on  your lists:  crossed off items on which you agree, circled items on which you disagree, and remaining items which don’t conflict with one another.  Start with them.  Talk about each item, why it is on the list, how  you picture it in your new home and so on.  Note whether the item is a 1, 2, or 3, and transfer it to a new combined list along with the items you crossed off earlier.

Move on to the circled items.  These are in conflict with one another so they must be negotiated.  How important is each?  If your desire for no stairs is a 1 and your partner’s desire for a Split Level is a 3, no stairs probably ought to prevail and be transferred to the combined list.  If the two items share the same number, for example if both are 2’s, your conversation will be more in depth.  Listen to one another.  Ask yourself how flexible you can be.  Gradually come to an agreement; or agree to disagree.  Transfer the result of your discussion (even if you agree to disagree) to your combined list.

Share the list with your agent.  Talk about the exercise and what you learned.  And then start looking at houses.

Now, remember those items you agreed to disagree on? It’s amazing how quickly the disagreement evaporates when a great house that meets most of your other needs comes along!

You can download a PDF copy of the House Hunters Wants & Needs Assessment HERE.

Are Real Estate Commissions Motivators?

Most real estate brokers – what I call ‘ordinary‘ real estate brokers – charge a percentage based commission: 5% or 6% or 7% of the final sales price of the property as commission.*  Of course, as I’ve said before, this makes no sense at all.  There is no relationship between the arbitrary percentage charged and what it takes to get a house sold.  Still, percentage based commissions are what most brokers charge . . . because that’s what they’ve always charged.

We at Help-U-Sell Honolulu Properties have a better, more up-to-date idea.  We charge a Low Set Fee to sell your property, and it is the same whether your house is worth $500,000 or $650,000.   Our fee is not arbitrary but is based on what we anticipate the actual cost of marketing a properly priced listing on Oahu to be, plus a reasonable profit.  The bottom line about our fee is that it is designed to save home sellers money and is always thousands less than they’d pay a typical percentage based REALTOR.

I once heard an ordinary agent explain to a home seller that the percentage based commission she was charging was a good idea because it would motivate her to get the highest possible price for the sellers!  ‘When you make more,’ she said, ‘I make more!’   Well let’s take a look at that notion for a moment shall we?

First, let’s create a hypothetical situation.  Let’s assume we have a house worth somewhere in the neighborhood of $500,000 – $520,000.  Agent A – who works for an ‘ordinary‘ broker – offers to sell the property for a percentage based commission of , say, 5%.*  If she gets a price of $500,000 for the home that’s a commission of $25,000! (go ahead – take a moment to catch your breath), but if she gets $520,000 for it, the commission will be $26,000 – $1,000 more.  Not much . . . but perhaps a little motivating.

But wait a minute.  The vast majority of home sales involve two real estate companies one on the listing side and one working with the buyer and the two companies split the commission.  So in our example we’re most likely not talking about $25,000 and $26,000 and a difference of $1000 we’re talking half of that:  $500.  Not quite as motivating.

What many home sellers don’t realize is that the big commission paid at closing goes not to the agent but to the agent’s broker who then splits the commission with the agent.    Let’s assume our agent is on a 70% split with her broker.  Her take for getting the seller $20,000 more is actually $350.  I think you see where this is going:  the notion that a percentage based commission in real estate motivates salespeople to get sellers a better price is really nonsense.

It is 2014.  People are wearing computers in their eyeglasses!  We’re trading stock online for a set fee of $7!  Isn’t it time your relationship with real estate sales stepped into the new Millennium?  If you are thinking of selling, you owe it to yourself to talk to Help-U-Sell Honolulu Properties before you obligate yourself to a bloated percentage based commission.  We’ll get the job done while charging you a logical low set fee that will save you thousands!

*Real estate sales commissions – whether percentage based or set fee – are fully negotiable between the broker and the home seller.  They are not set by law, nor is there a ‘going rate.’ Commissions used in this example are not real and are purely for purposes of illustration.

Protect Yourself When Buying A Home!

Your home – the house you purchase and live in – is a big investment!  For most of us, it is also the best investment we will ever make, growing in value year after year.  But things can go wrong with your dream home, too.  The roof could leak, the plumbing might fail, the air conditioner could die, the property could flood.  Protecting your real estate investment begins even before you own your home.  That’s why, in a typical home purchase, there are a number of mechanisms in the process designed to protect the investment the new home owner (and the lender) are making.  In property purchases where a mortgage is obtained, some safeguards may be required by the lender.

The Survey clearly defines property lines and reveals any encroachments.  It should be completed during the due diligence period. It ensures that nothing belonging to the property being purchased is crossing the line into a neighbor’s property.  The most common example of this kind of encroachment is the fence that is actually a foot into the neighbor’s yard.  Survey issues are rare and when they do occur they are usually solved easily.  However, I did hear of a situation where a neighbor’s room addition was actually a foot and a half over the line and into the subject property.  That sale fell through and the seller and the neighbor had to negotiate a solution to the problem, but it was the Survey that protected the purchaser and the lender from making a bad decision.

The Appraisal creates a comfort level for the lender – and the purchaser – that the property is actually worth what the buyer is willing to pay.   The Appraisal should be completed before the end of the due diligence period, and if you are using lender financing, will be ordered by your lender. Appraisals can be wrong, but usually not by much.  There is an appeal process for appraisals that are too low and there have been times when we have gone back to the appraiser with our own set of comparable properties to make a case for an appraisal adjustment.  Because most purchase agreements with financing are ultimately contingent on the buyer being able to obtain a mortgage,  when the property doesn’t appraise – and the lender therefore refuses to lend – the buyer has an ‘out’ so long as the due diligence period has not expired.  Often, however, what ensues is a negotiation between the buyer and seller through their agents about how to adjust the price and salvage the sale.

The Flood Certification attests to whether the property is located within a FEMA designated flood zone.  Here, the lender is trying to do the same thing he did with the Survey and Appraisal:  minimize risk.  If the property is located within a flood zone, the lender may require a special flood insurance policy or may refuse to lend all together.

Termite reports are almost always required by the lender, once again, to ensure that there is no significant damage to the property.  When termites or significant damage are discovered, it usually becomes a seller’s responsibility to correct the issue to the satisfaction of the lender.

Lenders usually require a Title Insurance policy as well.  This insures the lender’s investment should a claim against the title be made.  Again, these situations are so rare today, but when a party comes forth with proof that they actually own the property you just purchased, Title Insurance can be the only safeguard.

Home Inspections are not required, but we always recommend them.  Even if you are knowledgeable about construction, home systems and the like, you are always wise to pay an expert to go through the home you are about to purchase and report on any defects.  It is important to understand that there has never been a perfectly clean home inspection.  Every home has a few minor issues.  It can be as simple as missing or broken switch plates, a door that doesn’t close properly or something larger like a leaky roof.  I like to go through inspection reports with my clients line-by-line, evaluating each item to determine whether  it is something easily corrected or a larger problem that must be addressed before the transaction continues.

When purchasing a condo or a home in a neighborhood with a homeowner’s association, you have the right to examine the documents of the association prior to completing purchase.  This is very important.  You want to know that the association is financially viable and able to cope with unforeseen large expenses that may arise.  The worst example might be the condo development that suddenly needs a new roof two months after your purchase.  You also want to know what kinds of issues the association has been working with in recent months.  I find that reading the association’s meeting minutes is very helpful here as controversies and areas of contention are often reported.  Finally, every association has rules and by-laws.  When you purchase in this kind of neighborhood, you are agreeing to abide by those rules.  It is important that you know what they are before you buy.

Home Warranties are an option we often recommend for purchasers of resale properties.  These policies cover major systems in the house in the event they fail during the term of coverage – usually a year or two.  Often there is a small deductible, but if the air conditioner  or water heater fail during that time, they can be replaced with little out of pocket for the new owner.  I like Warranties because things do break.  When they break a few months after purchase it can make an otherwise joyful time turn sour.  Home Warranties ensure not just systems, but also your peace of mind and happiness with your new home purchase.

When you are buying it is important to protect yourself against possible problems with the property.  Fortunately, most standard purchase agreements and lender policies offer ample protection.  At Help-U-Sell Honolulu Properties, we work with our buyer clients to help them determine what additional protections are appropriate for each home purchase.

The Cost of Waiting

One of the critical factors coming into play in the Oahu real estate market is affordability.  Even though prices are still surprisingly reasonable in many places, Hawaii has never been a inexpensive place to buy a home.  With prices approaching record levels, it is becoming increasingly expensive and less affordable.  

In December of 2012, the median price single family home on Oahu was $595,000 (though the median for condos was closer to $315,000).  Interest rates on a 30 year fixed rate loan were about 3.5%.

That means, if you bought the median priced home that month with, say 20% down ($119,000), your principal and interest payment would have been $ 2,412.

In December 2013, the median price of a single family home on Oahu was $629,500 – about 6% more than in  December 2012.  If you bought that house last December, you’d have been out of pocket $6,900 more for the 20% downpayment and your mortgage payment would be $2,540 – $128 a month more for the same house.

So the cost of waiting just one year would be $6,900 (additional downpayment because of appreciation in values) + $128 a month for 30 years – $46,080!  Of course, you would probably not stay in that house for 30 years, but still, the cost of a 12 month delay, in this market, could push the limits of affordability.

Here’s the good news:  Though rates rose a full percentage point from 2012 – 2013 (December 2013’s rate was about 4.5%), rates have taken a bit of a hiatus for the time being.  Right now, a 30 year fixed can be had for about 4.3% – less than even two months ago.  Nobody expects rates to stay this low for much longer and most predict a slow creep upward over the next year.

So, the question of the moment is this:

What are you waiting for?

If you’ve dreamed of owning a piece of this wonderful place we call home, NOW is the best time – and may be the last time – to do it.  If you’ve been thinking of selling and trading up, NOW is when you will get the most for your money.  Next year, you will be looking at even more cash out of pocket to buy the same house and a payment that will almost certainly be higher.  Give us a call at Help-U-Sell Honolulu Properties and let’s get started!

Why Percentage Based Real Estate Commissions Are Nuts

We’ve been at it here in Hawaii for more than 10 years.  At what? you ask.  At providing real estate services that are priced fairly and reasonably; at pioneering a newer, better way of doing the real estate business; at not just selling real estate, but also changing the way real estate is sold.  We’ve gone from nothing to being one of the most substantial residential real estate companies on Oahu, which is a testament to the effectiveness of the program we offer.

We’re different.

Oh, we get the job done just like the best known companies on the island.  We offer full service that goes beyond our clients’ expectations.  We delight the people who work with us so much that most of our business comes from their referrals.  Best of all, we save our clients thousands of dollars over what they’d likely pay an old fashioned real estate broker.

We are not married to the old way of doing business.  Nor are we married to the old way of charging for our services.  Help-U-Sell Honolulu Properties is the next big thing in real estate, a new way to buy and sell and the best way to save in the process.

Sometimes the best way to explain the difference is to put a pencil to it and run the numbers.  Here is short video that does just that:

If you are ready to be delighted not just by the real estate service you receive but also by the fee you pay for it, call us.  Let us show you a newer, better way to sell and buy real estate!

The TRUTH About Real Estate Marketing

You listed with a real estate broker to sell your house, right?

Actually, that’s probably not the correct syntax. What you really did was to list with a broker to get your house sold.

It’s a subtle difference in wording, but one that points out the disconnect between thought and reality for many real estate consumers. The first phrase imbues the broker with near magical powers: he is going to take the house, wave his magical real estate wand, and cause someone to buy it. That’s really not what happens, although many brokers would like you to believe the myth that it does. Phrase two is closer to the mark: you’re going to use a broker to gain access to the natural matching of buyers and sellers that’s already going on. The broker is not magical. He is just a skilled gatekeeper.

The truth about real estate marketing is this:

A certain number of buyers are going to buy in the neighborhood today and a certain number of sellers are going to sell. The broker’s job is to get in front of, and prove valuable to as many of those people as possible.

That statement encapsulates the marketing function of a real estate broker as accurately as it can be. People can’t be made to want to buy real estate. They either do, or they don’t. A little education can help them make an informed decision, but it is a decision beyond anyone else’s control. Their decision to buy one house over any other is not a decision at all, it’s a choice, an illogical, personal, quirky choice. No amount of full page advertising is going to cause them to choose one house over another.

The broker’s job is to a orchestrate a marketing program that puts his or her office in front of as many of these potential buyers as possible. Once that is achieved, ‘selling’ real estate becomes a matching process: buyers’ wants and needs to inventory.

So how does a smart broker market to get in front of as many potential buyers as possible?

Job one is to be SEEN, to be VISIBLE. The consumer needs to see the sign, the logo, the name everywhere to have a comfort level that the broker may be able to help. This is accomplished with For Sale signs, local advertising and, increasingly, Internet marketing. But, you have to have something to market first . . . SO: the best thing your real estate broker can do to sell your house is to go out and get another listing and another listing and another listing. Each new listing is a marketing opportunity, an opportunity to generate buyer inquiries into the ofice. Of course, what’s done with those calls is another issue, one we’ll talk about in a moment.

Job two is to GENERATE LEADS: to put marketing pieces into the hands of consumers that will motivate them to make contact with the office. When a broker decides to create a marketing piece, he or she must do it dispassionately . The decision to advertise one house or another should be made based on which one will cause the largest number of potential buyers to contact the office, not on which seller is ‘owed’ advertising this week. This is an important point. Truth is: almost always, the advertised property that motivates the potential buyer to contact the office is NOT the property they eventually buy. There are dozens of kick-out factors they may encounter as they do their investigation. But that doesn’t matter. What’s important is that they contacted the office.

So, when a sharp broker decides to advertise a property, it’s not to get that particular property sold, it’s to generate buyer contact. It is this general lead generating activity that will cause your house to sell and it may not even involve advertising your house at all.

Ok: we’ve got Job One and Job Two. Here’s the third thing the real estate broker needs to do: CAPTURE LEADS. When marketing causes a potential buyer to contact the office, what will then cause them to agree – however subtly – to letting the office match them with a perfect property? It is a process that often occurs on the telephone, and at Help-U-Sell Honolulu Properties, we work on it constantly.

It’s important to understand what courage it takes for a potential buyer to pick up the phone or fill out an online inquiry form. They know they are likely going to hear from a salesperson . . . and that’s not what they want at all. What they want is the information. Period. So there is a very natural defensiveness on the other end of the line when the agent answers the phone.

How the agent handles the call, how he or she relaxes the caller, provides valuable information, builds a comfortable rapport with the caller is EVERYTHING. All of the time money and effort the broker has used to generate the lead can be lost right here if the agent is not prepared to earn the caller’s trust and then to begin the matching process. Now, think back to the last time you called a real estate office for information on a property. Uh-huh. I know. It was a painful experience. If the agent made any attempt to earn your business at all, it was probably pretty lame. And that’s IF they tried to earn your business at all (most won’t).

It’s such a shame, because that moment, when a buyer inquiry is handled in the office, is the ARENA. That’s where the process of ‘selling real estate’ begins. It is so important, I think it makes perfect sense for a home seller to call the office of the agent they are considering and see how they are handled. If the person on the other end of the line can’t comfortably communicate competence, if they can’t skillfully earn the right to help you find your next home, how are they going to capture the real caller who might be perfect for your house?

Bottom line: advertising wont sell your house. An agent or broker won’t sell your house. What will sell your house is an office with an active lead generation and capture process. And where will you find such an office? Honestly? Right here: Help-U-Sell Honolulu Properties. Here, the broker is in charge of marketing, lead generation and capture. We are completely focused on the process and we do it better than anyone on Oahu. AND: with low set fee pricing, we save sellers a lot of money, too.