Q & A
Q: How do you set the price for your home?
A: The price is the first thing buyers notice about your home. If you set your price too high, then the chance of alienating buyers is great. Several factors will contribute to your final decision. First, you should compare your home to others that are on the market. If you use an agent, he/she will provide you with a CMA (Comparative Market Analysis). The CMA will compare: houses in your price range and area that were sold, asking and selling prices, and current inventory with features of each home on the market. From the CMA, you will learn the difference between the asking price and selling price for all property sold, the condition of the market, and other homes comparable to yours. Also, try to find out what types of homes are selling and see if it applies to your area. Buyers follow trends, and these trends can help you set your price.
Q: As a buyer, do I need to worry about Lava Zones on the island of Hawaii?
A: Here on the island of Hawaii, Lava hazards are an important issue to consider when purchasing property. Hawaii is comprised of active volcanoes. The United States Geological Survey has broken up the island into 9 zones commonly known as lava hazard zones, and labeled them 1-9. Zone 1 is considered the highest risk zone based upon the degree of the risk of hazard, historical flows, and the geographical lay of the land. Zone 2 is also a high-risk zone based upon the same criteria. As the hazard zone number increases, the degree of risk decreases. For example, lava zone 9 is considered a zone of least risk. In conclusion, when it comes to purchasing real estate in these high risk areas, one needs to be aware of the risks involved that come with owning property in these areas as well as the costs associated to lending and insurance. For a Lava Zone Map go to LavaRockRealty.com and click on Island Living Hawaii Island Maps.
Q: You’ve found the perfect home, now what?
A: Whether you’re a buyer or a seller, negotiation is key to getting the best deal for your perfect home. There are several steps to buying a home in Hawai’i before you can call it your own. Once an offer has been made by a buyer and accepted by the seller, they enter into a legal contract known as a Purchase Contract. This document outlines the specific terms and conditions of the transaction signed and accepted by both parties. Once escrow is open, the buyer is recommended to hire a home inspector who will check items, such as the roof, basement, structure, plumbing, and electrical. Buyer may have a chance to negotiate with the sellers to cover the costs of certain repairs or to ask for concessions. Working with your lender to finalize the loan approval, follows. Prior to closing, you’ll receive a settlement statement outlining fees which will apply to you. Documents are then signed by both parties. After closing is finalized and recorded, the home is yours!
Q: How to begin the loan process?
A: Before you step foot into any home, getting an idea of how much you can afford is the first step. Taking the time to plug some basic information into a mortgage calculator will give you a good idea of the monthly payment you can afford. If the numbers don’t add up, consulting a mortgage professional for advice is always a good idea. Your credit history is your report card when getting a loan. Your credit score is a combination of a few factors that make up your financial and borrowing history. Finding out your credit history is easy. Get credit reports from the three major credit agencies: Equifax, Experian and TransUnion. If you do find any errors within the reports, alert the agency as soon as possible as it could affect your ability to get a desirable interest rate or even your loan.
Q: How do I pick a real estate agent?
A: Ever wish you could see through the hype to hire the best real estate agent for buying or selling your home? Here are a few tips to consider in choosing an agent. Talk with past and present clients for feedback and see what the agent has listed and sold in the past year. Does your agent listen to your needs? Look to see if your agent is currently licensed in Hawaii and if there are any disciplinary actions or complaints. Select an agent with the right credentials. If the agent calls himself a Realtor® with a capital “R” that means he’s a member of the National Association of REALTORS® and pledges to support the code of ethics. Research how long the agent has been in business. Knowledge of the market is key. Look at their current listings. A good agent will present comparable prices in properties near your area and know the market.
Q: What are the benefits of using a property manager versus doing it myself?
A: One of the biggest decisions you’ll make as a landlord is whether you should hire a property manager or do it yourself (DIY). Most landlords who prefer DIY are ultimately trying to reduce cost and expenses. Professional management companies provide marketing, rent collection, repairs, maintenance, screening of prospects, background and credit checks, and addressing both tenant and owner concerns in a fair and amiable manner. Managers are also aware of local rules and regulations, making sure you are in full compliance. Like your home, your rental is one of your largest investments and you want to ensure it is maintained by licensed professionals. For some, your property may be your future retirement home and you want to ensure it is well maintained for future use. Hiring a licensed property manager will ultimately save you time and money, giving you the peace of mind to enjoy what you really want to do.
Q: What is the key to ensure you make the right decisions when purchasing Hawaii Real Estate?
A: Whether you are looking for an investment or home ownership, find a REALTOR® with experience and knowledge. Properties in Hawaii are divided by islands & counties, as well as Multiple Listing Services (MLS). Your REALTOR® should be able to navigate through the different practices, county codes and regulations. Be aware of un-permitted areas, and properties not built to county codes or strict “Conditions, Covenants, and Restrictions (CC&R’s). Can you and your property obtain financing? What is a CPR property? Who can help manage your investment? A well-educated and informed agent can help you safely navigate through the process, answer your questions, and most important, “Look out for your best interest!” Hawaii is world renowned for its beauty; be sure your road to paradise is also a positive and memorable one.
Q: How do I make my house more appealing for buyers?
A: Statistics show that 50% of the buyers already know if they want to buy your house as soon as they drive up to your property. Exterior curb appeal and even the color of the house can make or break the deal without the buyer even entering your home. The yard should be nicely landscaped with exterior areas cleared of all debris, and most important, the house should be welcoming to your buyers. The interior should be freshly painted with neutral colors. New carpets and/or flooring would be highly suggested, if not, a thorough cleaning and odorless living space does wonders. Remove all personal items and photos from your house to avoid distracting your buyers. Let the buyers visualize themselves living in your home. Although professional staging is recommended, often enough just a little extra energy and effort to make your house more attractive will go a long way. These days, buyers recognize the extra value for properties that are in better, “move-in” condition and are willing to pay for your efforts.
Q: When is the best time to sell my house?
A: Timing is everything when it comes to home sales. Getting your asking price and even attracting multiple buyers, can be a factor as to “when” your house sells. While you should definitely pay close attention to market conditions as part of your thought process, you should always keep in mind, to sell or even buying a home is completely an individual’s choice. Once you have made up your mind that you want to sell your home, you will need to gather information before you determine when to put it on the market. Consult with a REALTOR® about current market conditions to estimate a listing price and how long it may take for your home to sell. If your home is priced correctly and in prime condition on day one, it will sell quickly and for the best possible price.
Q: What are the differences of Short Sales and Foreclosures?
A: A short sale property is where the sale of a real property is valued for less than the amount due on the loan. In a short sale, Seller (borrower) negotiates with the lender to allow a sale of the property to a Buyer (third party), and the lender in return requires the Seller to pay off partial or all remaining loan balances.
Foreclosures, also known as Real Estate Owned (REOs), is real property owned by a bank or a lender. Lenders acquire REOs through the foreclosure process or as a deed in lieu of foreclosure. REOs properties are sold in “As-Is” condition with limited warranty deed. Buyer may also be responsible for some or all delinquent homeowner’s association dues, condo maintenance dues, or any other outstanding assessments and liens. Closing costs are often paid by the Buyer and penalties may be incurred for Buyers who are unable to close by lender’s required closing date.
Q: Why should we invest in Real Estate in 2014?
A: Real Estate in general, has always been a sound long-term investment. As our economy continues to grow and improve, home prices are still relatively low, the forecast still looks good for prospective home buyers who have been “on the fence”, thinking of making the move to home ownership or relocation. With historical low interest rates and abundant options to choose from for financing, buying will be cheaper than renting as the cost of rent continues to rise. For investors, the time in now as the rental market is at an all-time demand. In addition, you will also have potential tax benefit as homeowners. Investing in real estate gives you a chance to start building equity, and investing in your future.