Kona Kohala Blog

"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.