Category: Hawaii Real Estate

What Would You Do To Sell Or Buy Your Dream Home?

I read a story the other day about a new ‘trend’ in real estate buyer behavior.  It think the word ‘trend’ is probably a little over-stated . . . seems only a few buyers in rare instances are doing this, hardly a trend.

In a few instances recently, home buyers have made their offers contingent on a sleepover.

Yep, they want to spend the night before they commit to the new home.  Sounds odd at first, doesn’t it?  But when you think about it, maybe it’s not such a bad idea.  Most people look at homes during daylight hours, occasionally in the early evening.  The entire ambiance of a neighborhood can change after dark and without some mechanism for inspecting this crucial time . . . well, you might be in for a surprise.

As a Broker, I am sometimes asked about the demographics and makeup of a neighborhood.  Fair Housing guidelines carefully define what I can and cannot say about a neighborhood and sometimes I get questions I just cannot answer.  Thanks to the Internet, there is abundant data online about crime rates, schools, neighborhood demographics and so on.  But data alone rarely gives the comfort level to some that this is the right neighborhood.

That’s why I often ask nervous home buyers to visit their prospective neighborhoods during odd times.  I suggest they go to the closest super market between 4 and 7 pm (peak shopping hours).  I tell them to drive by the closest schools about time classes end for the day to get a feel for kids and parents and that whole dynamic.  I ask them to drive from the neighborhood to their workplace during morning commute time to get a feel for traffic.  All of these activities are aimed at helping people be comfortable with their choice of neighborhood.

The lengths to which sellers will go to get a quick or a great offer is shifting as well.  Today we have professional ‘Stagers,’ who – for a fee – will do everything from rearranging furniture to re-furnishing a re-sale home so that it shows like a model home.  More than a few sellers have told me professional staging was the most important thing they did towards getting a great offer.  Some sellers have re-worked landscaping or substantially remodeled their homes to maximize their return.  In some locations, real estate companies that renovate very outdated homes prior to marketing them have sprung up.

But as a home seller, how far would you go to secure an offer?  Would you permit or encourage a sleep-over?  Would you offer your back yard for a cook-out or pool party?  Of course, in these cases, we at Help-U-Sell Honolulu Properties would be there to advise you – and clearly, in some cases it would not be a good idea – and to secure the proper agreements and deposits.

Thankfully in today’s Oahu market, sellers are in pretty good shape.  Housing is in demand and properly priced homes sell relatively quickly with few seller concessions or inconveniences.  Usually all a seller has to do to have a marketable product is to price it properly and make it easy to be seen via lockbox and continuous availability.  When you talk about selling your home with us, we will advise you about what might help get it sold quickly and for top dollar … and in most cases it will be things like a little paint here and there and a thinning-out of closets!

How to Price Your Home To Sell

When putting your home on the market, the second most important decision you will make is price.  The first?  Your Broker.  But that’s a different post.

The price you set must deliver maximum dollars to your bottom line (which also involves terms) without being so high as to scare buyers away.  At the same time, the price must be able to support a professional appraisal.  We call the right price ‘Fair Market Value.,’ and rather than a dollar and cents price, we often express it as a range of value.  Truth is, ‘Fair Market Value’ is what a ready, willing and able buyer is apt to spend on your house today, and that figure can vary a few thousand dollars in either direction depending on terms and whim.

The best clue we have as to what ‘Fair Market Value’ is for any house at any specific time are the recent sales of similar properties.  If five houses in the same neighborhood with the same floorplan and square footage have sold in the previous three months, their sale prices ought to give us a pretty clear indication of what a willing buyer would likely spend on your house.  I wish doing a Market Analysis and evaluating comparable properties was always that easy!

Unfortunately, too often there are too few comparables in the previous three months.  Sometimes we have to look at the previous six months and sometimes we have to go back a year to get sufficient data.  Often the specific neighborhood has too few sales occurring of similar properties and we have to expand the search to neighboring areas.  And sometimes, the property isn’t in a neighborhood at all or is so unique that finding similar homes is very difficult.

At Help-U-Sell Honolulu Properties, we are in the market every day and have been for years.  Often it is our knowledge of what’s going on and what’s gone on in the past that drives our recommendation on pricing.  In addition to comparable sales, we consider price trends in the marketplace and factor those in.  If you are in an area where prices are rising 1% a month, where the most recent sale was 3 months ago and where it’s apt to be 2 months before a suitable buyer can be found for your property . . . well, there’s a 5% price differential there that must be taken into account!

It is important to go into the market with an initial price that is close to Fair Market Value because the first two weeks any home is on the market present the greatest opportunity for maximum exposure.  At any moment there are dozens of potential buyers looking at homes on Oahu.  Some may be looking for a home just like yours, and may have been looking for weeks or even months.  It is this backlog of buyers we want to attract the day your home goes on the market.  In a week or two, that pool will have seen your house, will have decided it was right for them or not, and you will be left with only new buyers trickling into the market as prospects.

Overpricing with the idea that ‘I can always come down,’ is a foolish strategy for this very reason.  That backlog pool of buyers will see your house and the high price and continue looking.  A month of two down the road, when your frustration is at a peak, you may reduce your price back to where you should have started . . .but price reductions often create questions about a house.  What’s wrong with it?  Is the seller becoming desperate?  

There are online tools today that claim to help you determine Fair Market Value for your property.   Most notable is Zillow’s Zestimate of Value.  I can’t tell you how often we have met with home sellers who have an inflated idea about their home’s value because of a Zestimate or worse, believe their home is worth less than our recommendation!  Understand that with automated online tools, estimates of value are being made by a machine with no local market knowledge, no hands on inspection of property, no understanding of the nuances that can make one property worth more than another.  To really understand the value of  your home, to know what the right price today, you need the help of a true professional, like those of us who are proud to call Help-U-Sell Honolulu Properties home.

If you are thinking of selling or are just curious what your home is worth, please call us.  We’ll be happy to do the research and analysis and share a professional opinion with you.  It’s free.

 

Buying A Home On Oahu: 10 Things To Consider.

Purchasing a home can be a daunting experience, but it doesn’t have to be. To help we offer 10 things to consider when buying a home.

1.  The seller’s disclosure.  Before selling, a homeowner completes a detailed checklist of the properties various systems and components, noting any known defects or problems.  Even if you are in love with the house, it is important to be aware of any flaws.

2.  Zoning guidelines and restrictions.  This is especially important if you are planning structural changes or any kind of mixed use.

3.  Home inspections.  Ask us which ones are available and consider getting all that may apply to the property.  Of course the standard home inspection that reviews equipment and systems is essential as is the termite inspection, but you might also consider things like a pool or roof inspection.

4.  Reason for selling.  Why is this home for sale?  Where is the seller going?  You might think this is irrelevant when buying a home but if you understand what the seller is trying to achieve it can help you structure an acceptable offer.

5.  Radon gas.  Radon is a naturally occurring radio-active gas that has been linked to some forms of cancer.  It can accumulate in dwellings depending on how they are built and ventilated.  Radon gas is rare in Oahu but it does occasionally show up.  We’ll help you decide if a radon gas inspection is a good idea.

6.  Water damage.  An unfortunate interaction with water, whether from a leak or a flood, is a part of almost every home’s history.  Properly repaired, this is not a problem, but if care is not taken in the clean-up, mold can form.  Your professional home inspector should uncover any problems here, but it also doesn’t hurt to ask the seller if there have been water problems. You may want to have a complete environmental inspection if there seem to be any concerns.

7.  Crime rate.  What is the level of crime in the neighborhood and what kinds of crimes are most frequent?  One way to check this out in Oahu is by visiting Neighorhoodscout.com.

8.  Noise level.  If you tour a home at 3 pm, you will get a feel for what the noise level is at that moment.  But, what about 10 am? or 6 pm?  Sometimes it makes sense to drive back at odd times to get a feel for noise.

9.  Dogs and children.  Either may be a positive or negative depending on your own wants and needs.  The best way to know if a neighborhood is a good fit for you is to simply spend a little time there.  Go to the local supermarket and see who is shopping, visit the closest park and relax for a bit, drop by the nearest school when classes adjourn for the day.

10.  Schools.  How good are the public and private schools in the area?  Even if you don’t have school aged children, this is important as it can impact resale.   You can find school information in a variety of places including Education.com.  Also, Honolulu Magazine grades public schools on Oahu every year in their May issue. The latest report is HERE.

Of course, there are easily another “10 Things” that could be added to this list, but we are up on all of it.  Give us a call. We can help.

Hawaii Housing Affordability

Remember all of those years we worried so much about our housing investments?  From roughly 2009 – 2012 we saw short sales and foreclosures rise, home prices stall or fall, buyers disappear from the market and, in some places, desperation.

That all seems to be behind us now, as 2013 has proven to be a big recovery year for Hawaii real estate.  Inventories have shrunk to such low levels that bidding wars are common in high-demand areas.  Foreclosures are becoming increasingly rare and the short sale market is shrinking.

The best news is that prices are rising, in some areas by double digits.  Of course this combination of good news makes some people a little nervous.  Could we be on the verge of another housing ‘bubble?’ I think not, for a very good reason:  affordability.

Affordability is a measure of how much income it takes to qualify for the median priced home, expressed as a percentage of the general population who has that income or more.  As you might imagine, affordability was at an all time high at the beginning of 2012, just before the market began to turn.  But since then, as prices and interest rates have risen, the affordability metric has declined.

While affordability numbers for Hawaii are illusive, we can probably glean a trend from another traditionally expensive real estate market:  California.  According to the California Association of REALTORS, in the third quarter of 2012, 59%  of Californians could afford to purchase a median priced home in the State.  By the first quarter of 2013 it was at 36%, and now, in the third quarter of 2013, the number is 32%.  that’s a 27% decline in affordability in one year!

We have not seen affordability at these levels since the end of 2008,  but this is a fluid metric, impacted by a number of factors:  mortgage rates, home prices, and increasingly, mortgage underwriting criteria.  This year lenders have been strict when it comes to underwriting.  Nobody wants a repeat of the sub-prime lending melt-down.  However, we’ve recently seen some relaxing of underwriting standards to the point that today, a person with a lower FICO score, less money down and more debt can qualify for a mortgage that he could not have gotten last year.

Affordability is just one of the factors impacting our recovery, and today it is working to keep our recovery from spiraling out of control.  Affordability, prices, interest rates and inventory are all working to move us toward a market that is somewhat ‘normal.’

Don’t be dismayed by the low affordability numbers.  At Help-U-Sell Honolulu Properties, we are expert at helping people find lending products that enable them to purchase their dream homes.  We know where the mortgages are that fit your financial situation, and we’d be pleased to consult with you on this important issue.

What’s Most Important When Buying A Home (Selling One Too)

It pains me to admit it . . . it’s such a tired old cliche . . . but it’s true:  Location, Location , Location.  

The way we interpret that has been a little askew – the notion that there are right locations and wrong locations, good locations and bad locations – but your location, and more important, your understanding of the strengths of your location, are key.

No, there are no right and wrong locations.  Almost every location is ideal for someone.

Young families often want a location near a particular school.

Working people often target a neighborhood based on commute.

Urban hipsters want to enjoy the nightlife of the ‘hood on foot.

Families on tight budgets often want affordability and seek areas where that’s possible.

When you begin to look for your dream home, start with lifestyle:  what is yours?  How do you like to spend your everydays?  What are the activities that drive your life?  What’s important in keeping you and your family moving forward?  Get a picture of the kind of neighborhood that will support that . . . and then look for it.

Fill in a few blanks:

I want to be able to ________________.

I really like to ___________________.

It’s important that we ________________.

We have to be close to ________________.

And so on.

We are usually very clear about how far:  how far away from X and Y we are willing to live.  So take your local map, plot X and Y and then draw that meandering circle that sets the limit of that distance.  That line will become the boundary of your ballpark, the large area inside which you will look for your lifestyle.

Don’t worry about what anybody else thinks.  It’s your lifestyle, not theirs.  The exception is your REALTOR. who should be on board with your process and can point out pluses and minuses you may have missed.

Not until you have identified the locations where you can be happy living can you get down to how many bedrooms and baths, house vs. condo, ranch  or split-level.  Those things don’t matter until you have found your location.

When considering a location, do a little field reconnaissance before adding it to the acceptable list.  Go to the local supermarket during a busy time – often 5-ish in the afternoon – and shop.  These are the people who will be your neighbors:  what do you think?  Get up early and go hang out in a coffee shop or get a guest pass to the gym.  Drive the neighborhood – or drive your commute to and from the neighborhood – during rush hour.

If you are selling, do the same kind of exercise.  Discover (or re-discover) what kind of people live in your neighborhood.  What is the lifestyle?  The average age?  What do your neighbors like to do?  You probably think you already know this, but if you’ve been in your home for awhile, you may be surprised at how things have changed when you weren’t paying attention!

Do this as a seller to get a picture of your target.  What kind(s) of people are most likely wanting to live in your neighborhood?  Once you have that in mind, how would you go about reaching them?  It’s one of the topics of conversation in every listing consultation we do at Help-U-Sell Honolulu Properties.  Before we begin marketing, we try to identify the most likely target(s) of our marketing efforts for each property.  This helps us fine tune the marketing to produce optimal results.

Location – yours and the one you want to have – is real estate bedrock.  It is location that will enable you to love your home or not like it so much.  When you begin to look, or prepare to sell, spend a little time getting very clear on location.  Then call us and get moving!

The Truth About Trulia, Zillow and Searching for a Home Online

Many of the homebuyers I work with have looked at homes for sale online on sites like Zillow and Trulia.  They often have questions about the information they are getting online, so I thought I’d take a moment to explain who and what these large real estate sites are.

Zillow and Trulia are National Property Portals.  They collect and aggregate information about housing and houses for sale from all over the U.S. and offer it up to consumers in a searchable database. They make money by selling advertising.  The Portals sell premium placement of agent and broker information throughout their websites, in theory giving those agents an edge in securing buyer and seller leads.

The information on houses for sale comes from a variety of data feeds.  It is possible for an agent or broker to physically input a listing into the National Portals, but in reality this rarely happens.  Instead, the agent or broker inputs the listing into the local MLS, that then ‘feeds’ the listing information to the Portal.  In their quest to have as much housing information as possible, the Portals also ‘pull’ feeds – sometimes containing the same, but perhaps not exactly the same, information – from other sources.  For example, if the real estate office is a member of one of the large franchises, their franchisor may feed listings to the portals as well.  Or a large, multi-office firm may have its own feed.

As many home buyers quickly realize there are frequent inaccuracies in the data on the large portals. It is a conundrum for the portals for which there is no easy solution.  

Essentially they are trying to do what is a local job with a national platform.  They receive tons of data from multiple sources and, because they are removed from the local market, their methods of discerning what is accurate, and what is not, are somewhat flawed.  So you have duplicate listings with different prices, homes for sale that were actually sold weeks, even months ago and price estimates that consider only the average value in an area – which can be skewed by one very big sale or one that is very small. It can be very frustrating for the consumer.

Of course, there is a better way to search for homes for sale on Oahu or anywhere in Hawaii.   At Help-U-Sell Honolulu Properties, we approach the homebuying process as a partnership.  We want our buyer clients to be as involved in the search as they’d like to be, and we want them to have access to the most up-to-date and accurate information as possible.  

That’s why our website pulls data from the LOCAL MLS every day and makes it available to consumers in an easily searchable format.  When you search for homes for sale at HUSHawaii.com, you are looking at he same data that local real estate agents use.  It is accurate, current and easy to understand.

If you are just starting your search or deeply into it – or if you’re just curious about local homes for sale – we’d be pleased to show you how our local home search site can make the process easier.  You can search to your heart’s content, and when you need more information on a property, on financing, or on qualifying, we will be right there with you.

Improve Your Credit Score, Easily!

The single most important factor in determining how much you can borrow and at what rate is your FICO score. FICO stands for The Financing Corporation, a joint, private/government project for helping financial institutions make wise lending decisions. Their set of credit score addition and subtraction rules is complex to the point that whole businesses exist to help consumers manage this aspect of their financial lives. 

Your FICO score is a numeric evaluation of your credit worthiness and is based entirely on what is reported to the three credit bureaus – which, as we all know can be in error. Scores above 760 generally result in the most favorable loan terms and rates. If your score falls below 620 finding an acceptable loan may be difficult.

Improving your credit score can be a major project, but there are a few easy things you can do today and in the near future that will have a major impact.

  1. Pay your bills on time. Pure and simple, that’s how to establish yourself as a good credit risk. If this has been a problem in the past, start today to show a new pattern. Borrowers with a foreclosure – possibly the biggest negative in a mortgage history – are sometimes able to get a new loan in as little as 2 years IF they can show a pattern of credit responsibility over that time. So its wise to start today to give yourself a credit make over.
  2. Don’t close credit card accounts. To have good credit, you have to demonstrate that you use credit wisely. A credit report with no credit is like a beautifully set table with no food.
  3. Have ongoing credit activity. Use your cards, wisely and lightly. That does not mean to rack up balances. It means to have a small balance here and there, to occasionally pay one card off and to never miss a payment.
  4. Get an installment loan. You probably already have or have had one. Credit cards are ‘revolving’credit. Installment loans are things like personal loans, auto loans, mortgages and student loans. Showing responsible credit behavior with an installment loan usually carries more weight in the FICO process than similar behavior with revolving credit.
  5. Manage your available credit. Your credit cards have limits. Hopefully your balances are well blow your limits. If not, get busy paying them down, because the gap between your balance and your limit is very important to your FICO score. You want your balances to be below 30% of your limits. You may accomplish this by paying down credit cards, but may also ask your credit card companies for an increase in the limit.
  6. Give your credit report a once over. There are dozens of places where you can get a copy of your credit report, for a fee or free. Give it a once-over.
          • Look for derogatory entries. Are there any that are false? Dispute them with the reporting agency.
          • Are there any that are insignificant from a monetary standpoint? (note: derogatories are never insignificant from a FICO standpoint). Maybe you got into a squabble with the phone company over a charge and withheld payment. Now that $127 charge that went to collections is dragging your score down. Challenge it. Sometimes, if the amount is not worth the effort, the company will not contest it.
          • Are there derogatories older than 7 years? These are supposed to drop off your report but sometimes they remain. Request they be removed.
          • If you have a late payment with one lender here, and another with a different lender there, but otherwise have a great payment record with both, ask those lenders for a ‘goodwill adjustment.‘ Often the derogatories will be dropped.

Map out a plan using these tips for, say, 8 months. Check your score before and after and see what kind of difference you can make. Of course, we at Help-U-Sell Honolulu Properties are here to help and would be happy to work with you as you improve this important personal metric.

Remodeling that Makes Sense

I am often asked, what are the best remodeling investments when it comes time to sell? People want to know if they will get their money back (and more) if they re-carpet or paint, remodel the kitchen and so on. The answer varies because it depends on the specific house, the neighborhood and the type of buyer you are trying to attract. However, here are some basics:

1. Maintenance first. If the roof leaks and the carpet is worn, don’t expect a kitchen remodel to solve all of the problems. No matter how lovely your home is, any buyer will likely get a home inspection that will consider the condition of the major systems in the house. Things like heating system and air conditioning, plumbing, electrical systems, the roof, siding and foundation will be examined. Problems in these big system areas can change a buyer’s mind about a house quicker than you can say “Uh-oh.” If you have deferred maintenance, if there are things you know don’t work properly, take care of them first. Truth is, you probably won’t recoup much of your investment on these kinds of repairs, but you will make your home salable. In fact, a home in good condition will usually sell near the top of the range of market value, while one with lots of big ticket fix up items usually sits and sits . . . until the price is reduced drastically.

2. Exterior items. Your first task as a home seller is to get people in your front door. You can’t give them any reason to eliminate the property before they ever get out of the car. It’s true there’s not much you can do about the neighbor who seems to only cut the grass in a month with 5 Saturdays, but you can have your own yard looking great. It’s often worth the expense to hire a lawn and landscape maintenance company to bring your lawn into tip-top shape and add some blooming plants to the yard. The payoff will be more showings, more potential buyers and a better chance of getting a good offer. If you elect to hire professionals to handle the yard, start them a month or two before the house goes on the market. That will give their handiwork time to show results.

While we’re talking about curb appeal, take a look at exterior paint. Clearly if the house needs painting, paint it: that’s maintenance and is among the items covered in point 1. But, assuming the paint is generally in good shape, look for touch up tasks. One of my favorite touch up items is the front door. A fresh coat of paint there can make the whole house more appealing. Look at the windows. What do you see in them? Are they clean and are drapes and shades in good shape? Do you see stickers and signs? Time to remove them.

3.  The Kitchen. Most people, when they think of remodeling tasks that will make a difference when it comes time to sell, start here, in the kitchen. On my list it is number three because, frankly, if the house isn’t in good shape and if it doesn’t look good from the outside, not too many people will be paying attention to the kitchen. But if your kitchen does need remodeling you may be able to recoup some of your investment on sale. Some.

Think about it for a moment. Let’s say the range of value for houses like yours in your neighborhood is $500,000 – $600,000. Your home comes in right near the center of the range because, while it is in decent shape and looks good from the curb, the kitchen is 20 years old! You know you will be in the house for a few more years and you’re thinking a kitchen remodel might make that time more enjoyable. Your remodel costs $45,000, the kitchen is beautiful, the house is now at the top of the range, and for the next thee years, cooking is a delight.

It’s now time to sell. You’ve had three years of average appreciation (say 3% a year), so now the range of value in the neighborhood is roughly $550,000 – $655,000. Your remodel is still fresh and you’ve maintained the house in tip top shape so you can expect to sell at the top of the range: $655,000. That’s a $105,000 gain from the day before you did the remodel, but about $65,000 of that could be attributed to appreciation. So, you recouped all but about $5000 your remodel cost. But the remodel did more than add value and make your home more pleasant for the three final years you lived in it. It made your home salable. Without the remodel, you could expect it to take much longer to sell.

4. Bathrooms. The story here is much as it was with the kitchen remodel. An outdated bathroom can be a drag on value and can prolong selling time. But you probably won’t make your home hugely more valuable by remodeling it. Truly nothing is going to boost the value of your home above the range for the neighborhood. What a remodel will do is make the home more enjoyable while you are in it, make it more salable when it goes on the market, and boost it’s value up within the range of value.  Often bathrooms can be refreshed without a full remodel:  replace cabinet fronts, paint, replace faucets and fixtures.  But the most important thing about bathrooms, remodeled or not, is that they appear absolutely and spotlessly clean.

If you are considering a remodel and are curious about the possible impact on your home’s value and sale-ability,  we at Help-U-Sell Honolulu Properties would be pleased to consult with you on this.  We’ll estimate the current value of your home, weigh the cost of the remodel against anticipated appreciation and help you decide if the project makes sense.

What % Do Real Estate Agents Charge?

I spend a little time each month to determine what search phrases real estate consumers use online to find real estate brokers. When I discover the phrases consumers are using, I sprinkle them throughout my websites (including this blog) and thus increase the number of times Help-U-Sell Honolulu Properties shows up in search results.  In 2013, that’s just good marketing!

Most phrases are predictable:  ‘Hawaii Kai homes for sale’, ‘Mililani real estate’ and the like.  But sometimes I uncover something unexpected.  That’s what happened over the weekend.  Here is a Google search phrase that is being used a lot in one form or another:

“What Percentage Commission Do Real Estate Agents Charge?”
 

People want to know what they’ll have to pay a real estate professional to market their property — no surprise there.  But what jarred me this weekend was not the question, it was the word:  PERCENTAGE.

Seventy plus years of ‘that’s just the way we do it’ has trained the public to expect to pay a percentage of the sale price of their house to an agent when it sells . . . and that makes no sense whatsoever.

What does a percentage of you home’s value have to do with getting it sold? Nothing!

Think about it:

Here you are in your $525,000 house. Thankfully, you are not upside down. You have roughly $100,000 in equity. So you decide to sell, and list with XYZ Realty**, who charges you (and every seller with whom they work) 6%*. When your house sells (for full price), that’s a commission of $31,500!

I’ll give you a moment to catch your breath . . . before I point out that that may be 6% of the sales price, but it’s more than a 30% of your equity!

Meanwhile, your neighbor down the street also wants to sell, but his home is smaller. It’s only worth $450,000. He also lists with XYZ and agrees to pay the 6% Commission. When the house sells for full price, the homeowner is going to pay $27,000 — still high, but not nearly as high as your $31,500 commission.

Now, here’s the question of the day: What did YOU get for the extra $4,500 you paid to sell your house through ABC?

More Advertising?

More Open Houses?

A better Sign?

Oh, maybe your agent worked $4,500 harder! Right.

What you got for the extra $4,500 you paid is this:

Absolutely Nothing
In almost every case it takes no more time, effort, energy, money or marketing to sell a properly priced $525,000 house than it does a properly priced $450,000 house. There are some situations in some areas where a market niche, say, luxury homes, might take a little more time and might require additional or specialized marketing. But these situations are rare . . . and $4,500 extra dollars to sell your $525,000 house? That’s absurd.

It makes no sense today, made no sense yesterday, and will never make any sense at all.

At Help-U-Sell Honolulu Properties, we charge home sellers a set fee. It’s logical. We’ve worked very hard to determine the hard costs of carrying a listing in Oahu.  We then add a reasonable profit to those costs, and . . . that’s it.

I hope next time you need to sell, you’ll do the right thing and call the set fee alternative, Help-U-Sell Honolulu Properties. You’ll save a bundle (the set fee is usually thousands of dollars less than whatever percentage based commission you’re being quoted). And you’ll have the satisfaction of knowing that, finally, for the first time in your real estate life, you haven’t been taken to the cleaners!

*Commissions, whether set fee or percentage based, are always negotiable. They are not set by law or REALTOR rule. They are set individually by office Brokers. Price fixing occurs when different Brokers get together and agree to charge the same thing. That’s highly illegal. Different Help-U-Sell offices charge different Set Fees, because the carrying costs of marketing a listing vary from market to market, as do the number of days it takes a properly priced listing to sell.

**The “XYZ Realty” referred to in this blog is fictitious and is used only for illustrative purposes. Any resemblance between it and any other “XYZ Realty”, is purely coincidental.

Preparation For Selling: Preparing YOU

You can find lots of information on the Internet about preparing your home for sale . . . in fact, just scroll down:  you’ll find one such article here!  But selling quickly for top dollar involves more than just spiffing up the house.  It also involves YOU, your mindset, your preparation, your choices and so on.

Make the Shift

If you’ve been living in your HOME for some time, you wear it like your favorite sweater.  You love almost everything about it.  Every blemish has a story. The few little defects have been in place so long you hardly notice them. Every corner of every room holds a pleasant memory.

And somewhere, deep inside, you expect everyone who comes into your HOME to recognize and experience all of that warm fuzzy stuff.  They won’t.

The day you decide to sell, your HOME becomes a HOUSE.  All of the sweater aspects evaporate (you were the only one who perceived them anyway).  It is now a PRODUCT, competing in the open market with other similar products.  And you must start to view it that way as well.

In my previous post, I drew a parallel between detailing your car and preparing your house for sale.  I think the analogy is good because we tend to become far less emotionally attached to our cars than our houses.  When it’s time to sell a vehicle, we prep it and GO.  You need the same mind-set when selling your HOUSE.

Open Up

Over and over I have seen home sellers create barriers between their HOUSE-product and potential buyers.  It’s usually subtle little things like NOT having a lock box (that makes access easier for REALTORS), like NOT having a for sale sign in the yard, like requiring 24 hours notice for a showing.  There are often good reasons for these little roadblocks – small children, ailing family members, day sleepers, valuables – but they still cut the pool of potential buyers AND make competing properties more attractive.

Before you insist that you can’t or you don’t want to or you’re not going to . . . ask yourself why.  Is there a temporary change you could make in your daily lifestyle that would allow you to remove the restriction?   Time on market right now on Oahu is very short.  Most properly priced homes sell in 30 days or less.  Most people can put up with even a drastic change for that short period of time, and it can make a big difference in sale-ability.

Do Your Homework

Ask your agent to walk you through the offer and acceptance process BEFORE you have an offer.  What can you expect?  What should you look out for? How will you work with your agent to sift through offers?  If you wait until you have an offer to start educating yourself, the process will drag and your comfort level will sag.

In addition to simply talking about the process, ask your agent to give you a blank copy of the standard real estate purchase agreement and the sellers’ net proceeds worksheet that will be used.  The time to become familiar with these important documents is NOW, before you’re having to make decisions based upon them!

Adjust the Bulls-eye

One of the biggest mistakes home sellers make is getting hung up on price.  It’s natural: we are born shoppers and when shopping we usually start with price.  But when it comes to selling your HOUSE, price is not the most important metric for judging success.  What really matters is your net proceeds or walk-away dollars.

When you list your home for sale, work with your agent to determine a target net for yourself.  Then when offers come in, you’ll be prepared to evaluate them properly.  Many times, in multiple offer situations, the BEST offer is not the highest.  If you stay focused on the right bulls-eye, you’ll be able to spot it.

Choose Carefully

If you are talking with real estate companies about what they can do for you, beware the marketing fluff.  It’s fine for your agent to tell you how wonderful he or she is and what a good job their company will do.  But where’s the proof?

Look for a tangible track record in a number of areas.  And the company or agent with the largest number of sales is not necessarily the best.  The kind of results that impact you, the seller, are:

  • Days on Market.  On average, how long does it take your prospective agent/company to sell a listing?  And how does that compare with the MLS average
  • Sale Price as a % of Listing Price.  On average, how far off list price do sellers listed with this agent/company have to budge to make a sale?  Do they have to come down 2%? or 5%?  And how does that compare with the MLS average.
  • Seller Savings. On average, how much do sellers listed with this agent/company save in real estate commissions over what they might pay any other agent/broker?  Ok, I know;  that’s a loaded question because Help-U-Sell Honolulu Properties is the only real estate company in the area that has a better deal for sellers, that is focused on seller savings like no other company.  Our low set fee pricing and completely different business model delivers substantial savings to our seller clients again and again and again.  It is the track record we are most proud of!
  • Seller Satisfaction.  Does your prospective agent/company have raving fans?  Can they share testimonial letters from former sellers with you?  Are they willing to give you a list of references to check?  You know if you were hiring an unfamiliar babysitter you’d check references.  Why wouldn’t you check them when you’re dealing with your biggest asset, you home?  I am very proud of the testimonials we’ve received at Help-U-Sell Honolulu Properties, and you can view some of them HERE.

Work through this little list and prepare yourself (as well as your home) for sale.  You’ll sell faster for more walk-away dollars, with less hassle if you do!

Buyers: How to Behave in Multiple Offer Situations

If you are trying to buy a home in Hawaii, chances are you’ll be bidding against other buyers, just like yourself.  Ours is a very competitive market where homes sell very close to asking price and do so in a very short time.  Clearly, if you are going to buy your dream home you must be prepared to deal with the rapid pace of this market.  Here are some tips:

Be Pre-APPROVED for a mortgage.  That doe not mean pre-qualified.  Pre-qualification simply means you’ve spoken to a lender and based on what you told that person, he or she thinks you’d probably qualify.  Probably.  Based on what you told that person.  To a home seller weighing one offer against another, that kind of qualification is meaningless.

To be Pre-Approved, you must actually complete a mortgage application and it must at least make it through automated underwriting.  A Pre-Approval letter strongly states that you are ABLE to make the purchase you are attempting.  It can  put your offer at the top of the stack with a seller who wants a smoothe transaction.

Don’t Dawdle.  This is not a market to think, hem and haw about a home.  Many buyers actually lose out on one or even two homes before they understand the importance of moving quickly when the right home comes along.  What does it take to move quickly?  First, it takes getting crystal clear about what you want in a home.  Which neighborhoods are acceptable?  What style(s) are right for you?  How big, how many bedrooms, what amenities and on and on.  I would urge you to go through a wants-and-needs discussion with your agent.  Having an knowledgeable outsider ask questions can help you become clear about what you want.

Make a Large Earnest Money Deposit.  If this is the home you want, show that to the seller by putting a sizeable deposit on it.  What is ‘sizeable?’ There is no rule of thumb, but your deposit is telling the seller, who may be weighing other offers, that you are serious.    If you were a home seller, evaluating two very similar offers, one with a $1,000 deposit, the other with a $10,000 deposit . . . which would you choose?

Keep Contingencies to a Minimum.  A contingency is a pass/fail situation and if the contingency is not met, the sale may collapse.  To a seller, a contingency is a reason for the sale to fail, so the fewer you load into your offer, the better.  I’m not suggesting you abandon all contingencies.  Surely, appraisal contingencies, home inspection contingencies and termite contingencies are important.  But let’s eliminate those along the lines of ‘This offer is contingent on the approval of Aunt Mini who will be in town to tour the property in two weeks.’

Pay Your Own Closing Costs.  If you can.  Everything you ask the sellers to pay on your behalf comes off their bottom line, and to a seller, the bottom line is almost everything.  If you need to ask the seller to pay certain items on your behalf, look for ways in the offer to offset that – which usually means adjusting the price upwards to accommodate the additional expense.

Be Personable.  While the sellers are focused on the bottom line, they are also human.  Chances are they’ve loved this house and would like too have the next owner love it too.  It can help to write a short personal letter to the sellers to accompany your offer, telling them a little about yourself and why you like their home.  I’ve seen it make the difference in multi-offer situations many times.

Don’t Low Ball.  Everyone would like to ‘steal’ the property.  But in this market, it’s just not going to happen.  In most neighborhoods, homes are selling at 99% of list price and in some they are 100%.  Click HERE to see a recent post about this.  Clearly, nobody is going to come down from a fair listing price by, say 10%.  So don’t start your conversation with the seller by making a ridiculous offer.  I really like my buyers to make their BEST offer first.  If it is close, there are often adjustments that can be made if we get a counter offer from the seller.

Listen to Your Agent.  At Help-U-Sell Honolulu Properties, we’ve been in the business every day for YEARS.  We know how to negotiate a sale, what’s apt to work and what won’t.  Put that expertise to work for you.  Look at us as trusted advisers who can help you get the best property at the best possible price and terms.  It’s what we do.