Kona Kohala Blog

Craig's List Scam

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Can you believe interest rates are actually holding at under 5% right now.  Buying property is really an investment, where else can you find rates like this?  Many people today are getting more than 5% on investments so it makes sense to carry a mortgage rather than paying cash in this market.

Bank of Hawaii is offering a 15 year fixed rate mortgage for 4.00% interest with 2.625 points, a point being one percent of the loan.  The 30 year fixed rate was at 4.5% for the same points.  Even the Jumbo loans were at 5.25% which is a good deal for any home buyer.  I remember buying my house in 1993 and thinking what a great rate 6.75% was.  This is a great time to buy real estate if you're moving up, down or just want a new home.  There's a fairly large inventory of properties available to choose from and it is a buyer's market.

For more information on financing you can go to my web site and get some information and the names of different lenders with whom I've worked and had good results.  Please keep in mind that this is not a guarantee of service but I do know they've done well with clients in the past.  You can get there by clicking here or go to www.FerrariPacificRealty.com and check out the entire site.

It appears that there is less change in our market place, fewer declines in the number of sales and not quite as much of a drop in prices as we've been seeing.  Our market is approaching stability . . . but for how long?

Many "experts" today are saying we're on the road to recovery but is it only a false start?  Property values are still down in Hawaii but not as much as they were.  Condo and Single Family Residence (SFR) median prices are in the $200's and $400's respectively for North Kona.  Even South Kohala, our condo capital due to the huge number of vacation rental properties, is seeing a continuing decline in property prices.

This is great news if you're a buyer who's been sitting on the fence and unable to decide if now is the right time.  Interest rates have taken another plunge after an attempt to stay above 5% last week.  Bank of Hawaii is offering a 4.5% 30 year fixed rate loan with 2.625 points.  A 15 year fixed rate with the same points will get you 4.0%.  That is cheap money in any market.  Jumbo loans are 5.25% with 2.125 points and that too is a great rate.

If you'd like to see what we can put together for you to meet your real estate needs, please send an email or call 808-896-0661, your information is secure with us, see our Privacy Policy.

Aloha Friday, west Hawaii's premier weekly newsletter (how's that for self agrandizment?) is in email inboxes now.  This week we look at where the active listings are by price range and how they compare to escrows.  There's also information on total, year to date numbers for sold properties and total active listings for both North Kona and South Kohala.

There's also some very good news for "foodies" and the like, the old Wendy's totally fantastic location in Keauhou has been released by none other than Sam Choy.  Sam expects to be open in about 4 months or so and will be serving his tradional tummy pleasers as well as some new dishes he's come up with.  Hopefully it will rival his Honolulu resturant for good taste.

State of the Nation:  I sent out an email notice regarding one congressman's attempt to have an amendment made to the current health care package being circulated.  I called for all government officials and employees to have the same medical and dental coverage as the rest of us, their employers, we who pay their bloated salaries.  As it stands, they have exempted themselves from having to participate in the program just like they don't participate in Social Security but rather have their own program which is not in danger of bankruptcy.

Within minutes I was getting emotional emails from the left and the right either condeming me for passing out Republican backed propaganda or supporting my position.

My concern is that the government has polarized the population.  They have succeeded in turning us against each other in our support of them.  This is not right!  We have been weakened by this tactic.  I'm shocked and saddened that we have fallen prey to these devious tactics.  Is this just a further erosion of our neighborhoods, our friends and family by the government?  It's no longer about Republican or Democrat.  It's about us standing up for us, we the people.  We can't continue to let this hatred build and it's being fueled daily by our elected representatives.

What do we do?  Or do we just sit idly by and watch what was a great nation, the greatest nation, slowly sink into history with nothing but a blemished past?

You can now read about Short Sales and look at a list of Short Sales for both North Kona and South Kohala.

To learn more about short sales, click here.  This page will define short sales, talk about the pros and cons of short sales, help you find out if you're qualified to do a short sale if you find yourself in that position and it talks about the 16 steps necessary to put together a complete Distress Package for your lender which will help insure that your short sale is accepted.

If you'd like to look at a list of short sales, click here.  This list will be updated weekly and show all Single Family Residences (SFR's) and condos in both North Kona and South Kohala.

Buying a short sale property can be a way to get a very good price on a property, however, it takes a lot of patience to close one.  Banks are notoriously slow at processing short sales and for good reason.  Working with an experienced short sale broker can take a lot of the frustration out of the process.  I spend time cultivating relationships with Loss Mitigation Specialists who work for the lenders processing short sales.  Having an inside contact can make all the difference between waiting 6 months or waiting 2 to 3 months.

I also cover news on short sales in the Aloha Friday newsletter; to sign up, click here.  For specific information please call 808-896-0661 or email Robert@FerrariPacificRealty.com.  aloha

One last pitch for the First Time Homebuyer's Credit, it expires on November 30, 2009 meaning you must have closed on the property by that date in order to be qualified to receive either 10% of the purchase price of $8,000 whichever is less.

This is a "refundable tax credit".  First, what's the difference between a tax credit and a tax deduction?  A credit is a one for one credit against taxes due.  A deduction is an amount deducted from your gross income when determining your taxes owed.

A refundable credit means that if you owe $6,000 when filing your taxes you could apply the $8,000 tax credit so the government now owes you $2,000.  One of the requirements is that you must file your federal income tax in order to initiate the tax credit.

There are some other requirements and limitations on the program so if you have questions, please go to our First Timers page or, email me, Robert@FerrariPacificRealty.com or call 808-896-0661.  There's a chance this program will be extended, possibly even apply to all home buyers, not just first timers, and it may be increased.

Opponents of the program point to the cost.  It was expected to cost $7.5B, yes billion but actually cost $15B to date.  Since it seems to be just a matter of printing more money for this administration, nothing is out of the question.

The new list of foreclosed Single Family Residences (SFR's) and condos for both North Kona and South Kohala are posted.  Click here to view.

One of the best buys isn't on MLS yet but will be coming up soon.  This is a Hali'i Kai oceanfront condo at Waikoloa Beach Resort.  The most dramatic aspect of this project is the private oceanfront pool, spa, workout facility and restaurant that is part of the ownership package.

New foreclosure prices are sure to please as more come on the market and the various lenders holding these properties compete on pricing.  If you're looking for a second home, you may qualify for owner pricing on a loan meaning you could end up with a fixed rate mortgage well under 5%, around 4.5% today.  For more information on financing, click here.

You can sign up for the weekly (almost) newsletter, Aloha Friday, no obligation and no cost.  If you're concerned about your privacy please look at our Privacy Policy.

It's so sad to see Jimmy Carter lose the last remnent of a brain.  It seems he's finally gone over the edge with his comments about Rep. Joe Wilson being a racist because he called Obama a liar.  Fact is, what Obama had said was a lie.  Wilson did not apologize for calling him a liar, which he is, but for the venue in which he did it.

How easily the democrats forget their booing of President Bush at a State of the Union address.  I guess if you're the majority the rules of civility are different.  But seriously, how do you make a leap from a comment about truth to believing the speaker is a racist?  Maybe he was speaking to the half white side of Obama, people seem to forget he's only half black.

More on housing later on.

I just added a list of available housing programs, various financing that comes from the federal government, state and county governments, too.  There are programs available to a wide variety of people so if you're thinking about buying you may want to look at this page by clicking here to see what's out there.

No politics here but I am curious why, if this new healthcare is so good, our congress has exempted itself from coverage.  Personally, I want what Ted Kennedy had, not the cancer, the healthcare.

I have had the misfortune of working with Fannie Mae on a FHA foreclosure property for the past two weeks.  After this short reintroduction to the federal government I am more sure than ever that this is not who should run our health plan or anything else, for that matter.

This is the most convoluted and backwards organization (I use that term loosely) I have worked with in 14 years of real estate.  In the early 70's I was a contractor with Tracor Systems working on defense projects for the pentagon.  Nothing has changed in the way our government does business since then.  In 37 years, nothing has changed.

All signatures to this purchase must be on the same original document and all must be in "blue ink".  I work in Hawaii, my clients are in Fresno and the husband is on a business trip.  Not normally a problem but once you are notified that FHA has accepted your offer (which they do at their pace) you then have two (2) business days to have the blue signatures of all parties on the original only in their hands along with a copy of a cashiers check for the deposit.  This took some serious scrambling on the part of my clients.

Normally, when a change is made on a contract for real estate, it's done in the form of a counter offer, no one actually marks up a contract, you submit a new clean one.  Not with FHA, my contract looked like a wall in the garment district in LA with all the strike outs, added numbers and language, etc.  What a mess and they want to run our health insurance.

Do NOT, whatever happens, do NOT allow our government to operate anything that has any importance in your life.  I was in the militarty for 10 years and a government contractor for 3 years after that.  I can tell you that's a mess but no one else can run a national defense so it's a mess we have to live with but let's not give them any more to do.  Believe me, they can't do the jobs they already have properly so let's not add to that confusion.

With the ever increasing numbers of foreclosures and so many more on the horizon from South Kona to North Kona, South Kohala to North Kohala and beyond, I've decided to get into the REO (Real Estate Owned) business.  I have represented numerous clients over the years in the purchase of foreclosures but never actively pursued listing them.

About 12 years ago I did take over a foreclosure business for a friend who had suffered a serious head injury leaving him unable to work for almost two years.  In that time I learned more than I wanted to know about foreclosures although the process has changed to adapt to the large numbers of such properties today.

So now not only will you have access to foreclosed listings here on this web site by clicking here but you will also have access to new listings before they are even entered into MLS.

One thing I do vividly remember from my time of specializing in REO's was the extra work that goes into making a transaction successful.  Having access to the latest tracking software and use of the internet and all the time saving tools there, you can expect the highest level of service and accessability if you're in the market for foreclosure property.

You will also have insights into the world of foreclosures by subscribing to my free weekly (usually) newsletter, Aloha Friday.  To get on the mailing list, click here.  To review our privacy policy, click here.

"What is going on with real estate?  We used to list a property, someone brought an offer, it was negotiated, we opened escrow, the loan was approved and we closed escrow, not any more."  Kailua Kona, Holualoa, Keauhou and points beyond are all seeing the same change that's hitting the main land so hard.

Oh so true, during the crazy days of 2000 to 2006 I felt like a checker at a discount warehouse, write 'em up and close 'em.  Now we have that well know horse of a different color, a color that seems to change regularly.  First there are the traditional listed home where the owner actually owes less than what it's worth and they're downsizing or moving.

Next we have the short sale and boy do we have a lot of those.  This is where the person doesn't necessarily want to move but they can't keep up with their payments for one reason or another and need to let go.  If it's a hardship case, lost job or illness and they're more than a couple months behind on their payments they may qualify for a short sale.  If you or someone you know is headed this way, don't wait until you're behind, call your lender immediately and tell them what's going on.  They have departments that do nothing but work with people in this situation.

Short sales blemish your record but not as severly as a foreclosure.  Rumor has it that short sales take a long time to complete; let me set you straight, that's a fact.  Partly because the lenders are swamped with such requests, partly because they are still training people to handle short sales and partly because it's a full moon, short sales take as much as 5 months to complete.

There are some very good deals as short sales, as good or better than foreclosures but you do have to be patient.  Contact me if you're interested, I've been through it and am still going through it with clients on both sides of the deal, buyers and sellers.  It's a little trickier than a regular sale but having done a few I know what the lenders want and how to package the transaction.

Last are the foreclosures.  In the past, foreclosures were a good deal being priced below market value just to get rid of them.  That's not the case today.  Typically, a bank will buy back the property at the foreclosure auction for the amount owed and this is typically more than it's worth.  The bank then turns it over to their REO (Real Estate Owned, bank talk for foreclosure property) brokers for sale at market value.  Occassionally they will come on below market value but that's only when it's not a unique property and one they can expect multiple offers on when it's released.  The idea is to get the price at or above market value with buyers bidding on the property.

Foreclosures are usually priced for the market so don't expect a great savings by looking only at foreclosures.  This may change in the coming months when the number of foreclosed properties triples here in west Hawaii.  This includes Waikoloa Village more than Waikoloa Beach Resort or Mauna Lani Beach Resort or Mauna Kea Resort.  The reason is that the upcoming foreclosures are going to be the local holdings, homes that belong to the people who live and work here rather than investor owned properties.

It's a constantly changing market so get on our newsletter mail list or contact me at Robert@FerrariPacificRealty.com and I can put you on a list to receive automatic updates on the type of property you're looking for.  Signing up for the Aloha Friday newsletter will keep you abreast of all things West Hawaii on a weekly basis.  Happy Labor Day.

In talks with Bank of America it was said that more foreclosures are on the horizon.  Currently, B of A has about 63 REO's (Real Estate Owned, lender term for bank owned properties) spread from Hawi to Na'alehu including South Kona, and quite a few in North Kona and South Kohala.  These are mainly investor properties found in Waikoloa Beach Resort, Mauna Lani Resort and the Kailua Kona area.

The source, speaking anonymously, stated that there would be between 180 and 200 new REO's coming on the market from now until January, 2010.  Instead of being investor homes, these will be homes belonging to people living full time on Hawaii Island that have run into financial problems.

Many of these owners are working couples with one or both working at resorts like Hualalai Resort, Kukio Resort or the Mauna Lani and Mauna Kea.  A lot of them had jobs in construction which has dropped off dramatically with the declining economy.  The service industry has also been hit hard as fewer people vacation in Hawaii.

To entice people to make Hawaii a vacation destination, our idiotic legislature decided to raise the Transient Accommodation Tax, TAT that's charged for hotel rooms, a full percentage point this year and another point next year.

Yes, this is the socialist state of Hawaii run by democrats who think the answer to every budget problem is, "raise taxes".  I read today that the only difference between democrats and republicans is that when democrats run things they share the pain with the taxpayers.  Where's Ronald Reagan when we need him?  It's time for tax cuts, not increases!