Purchasing Now: Your Property As A Kona Vacation Rental

One of the great options home buyers in the Kona real estate market embrace is the popularity and ability to rent their properties as vacation rentals. People come from all over the world to enjoy our wonderful climate, pristine beaches and relaxed island lifestyle.

Some wonderful clients, who I sold the below home to, have done just that! This is their retirement dream home, that they absolutely LOVE. Since they aren’t planning to retire for another 10-15 years, they are offering the home as a vacation rental. What an awesome opportunity for families vacationing on the Big Island!

http://www.vrbo.com/398178

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The property is meticulously landscaped, with lush garden areas, producing fruit trees and plenty of yard room for outdoor games and activities. Of the many highlights of the home, the pool is an absolute favorite!  The privacy afforded in the pool and sunning area is something one can only dream of.

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The main house is a 4bedroom/2 bath home completely outfitted for your convenience, with a delightful chef’s kitchen, breezy screened in lanai area, and a pool table for entertaining.

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Below the main home is the completely self contained “ohana” unit, that is furnished with a king size bed, mini-refrigerator and offers a great escape for visitors seeking a little more quiet and privacy away from the main group!

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This property is quiet, extremely private and offers all the amenities of a high end resort, at a fraction of the price!

Click the Vacation Rental By Owner link below for more property information and to view rental availability!

http://www.vrbo.com/398178

Kona Condo Update: Alii Lani Inventory and Recent Sales

The popular Alii Lani condominium project, located on Kailua-Kona’s Alii Drive continues to draw strong buyer interest as many find the project’s competitive pricing good Kona value.

Alii Lani has 2bed/2bath or 3bed/2bath floor plans, multiple swimming pools for owners to enjoy, low maintenance fees and is just minutes from Kona’s many beaches.

I closed on my Alii Lani F101 listed property, September 14, 2012.

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This turnkey furnished unit had been almost completely redone from top to bottom with new appliances, flooring, paint and fixtures. As my seller and I began readying the property for market,  I shot high quality photographs along with a high-definition video tour to best showcase the property!

I released Unit F101 onto the market,  the morning of August 3, 2012. Within the hour we had a request for showing, a second showing to same buyer that same day,  and by the next morning a full price offer!  When a property is priced right, and you have professional photographs paired with a video tour, your property will sell.  We closed September 14, 2012 at our list price of $189,000. My seller, and the buyer were ecstatic!

There is still some great inventory in Alii Lani. Currently there are four units available, priced from $155,000-$209,000. Units that have sold from June 1, 2012 range in sales price from $138,000-$209,000. To view Alii Lani inventory and recent sales activity click here. 

For information on these or other units, or to discuss selling your property, contact Marco today!

Kona Market Update: Inventory Down, Sales Up!

Kona’s real estate market continues to gain momentum, as reduced inventory levels and aggressive buyers continue to take advantage of fantastic market pricing.

Our most recent market update via The Griggs Report, shows us that in North Kona’s residential market priced to 4 million,  inventory levels have been reduced 19%  when compared to the same time in 2011.

In the same market, during the same time frame that inventory has decreased, pending sales have increased by 16%.

Decrease in inventory, increase in sales…..you know quite well what is coming next. Increased pricing.

Many Realtors can attest to the fact that we don’t have the inventory we used to. It simply isn’t available. Well priced properties fly off the shelf, and my Alii Lani #F101 unit, currently in escrow, was a great example of this.

I listed the below Alii Lani #F101 condominium Friday August 3, 2012 at 8:11 a.m. Before the end of hour, I had a request for showing. Then a second showing to that same buyer by mid afternoon. The next morning, we had an offer. All parties came to terms Sunday, and we opened escrow Monday morning.

If you are a Buyer in Kona’s current real estate market, DON’T WAIT. Recovery is happening this very moment, and concrete numbers are supporting that.

Don’t be left behind!

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Kona Westwind #2 Video Tour!

I’m very happy to share West Hawaii Real Estate’s inaugural, high-definition, property video tour!

My sellers now have the benefit of HD video tours showcasing their properties, WOW!  Property video tour demand is tremendous right now among buyers, and this is another great sales tool I am able to bring to my clients!

This Kona Westwind unit is an updated 2bedroom/2bath offering that has an expansive lanai area, ocean view, and is just minutes from town.

Kona Westwind is a low density (15 unit!) project that is pet friendly, and does not allow vacation rentals.

MLS 255244, 77-296 Kalani Way Kailua Kona HI 96740, Offered at $155,000

Want to get a better look at the property? Be sure to mark your calendars, this unit is being held open Sunday, July 15 from 12pm-4pm during Clark Realty’s Summer Sell-Abration extravaganza. Hope to see you then!

Holualoa Short Sale – SOLD!

I love selling Holualoa real estate! I was raised in the beautiful town and live in the area currently. Over time, my property familiarity and the professional relationships I’ve developed have benefited many buyers and sellers.

I am happy to report  that  77-6128 B1 Mamalahoa Highway, closed recently!

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This short sale brought it all. The highs of multiple lien holder approval, and the lows that the bureaucratic short sale process can bring at times.

Along the journey, I put the property into escrow multiple times, and for one patient buyer, the dream came true. They secured a GREAT deal on a property, because of their patience and short sale preparedness.

The short sale process is changing dramatically right now as lenders are working to streamline their approval process.  As the listing agent of this property, I wanted to share topics of interest that were beneficial to the completion of our short sale . 

Proper Market Positioning

Different lenders are now establishing the list price of properties. One of Bank of America’s newer programs is their Preapproved Short Sale pricing. You and/or your listing agent contact Bank of America directly, and work with them to set the list price of the property. This is tremendously beneficial as it takes the guess-work out of what sales price the bank will accept. Check with your lender to see if this is something they offer. Be sure to emphasize that you want to hit the market competitive,  not overpriced!

Seller Financials

Be aware that the seller’s lender will require bank statements, retirement account information, tax returns, pay stubs along with any other financial documents that they see fit to examine. This is part of the process.

The sooner you can get these together for your agent to submit to your lender, the quicker your short sale will proceed.

Be prepared to update these documents as time goes by.

Buyer Preparation

As a purchaser, make sure you have a pre-approval letter from your lender certifying your purchasing ability. If  purchasing with cash, be prepared to submit “proof of funds”.  This can be a recent bank statement or letter from your financial institution certifying the funds are present and liquid. The listing agent will need either of these to submit the offer you present to the seller’s lender.

Realize that even as lenders work to expedite approvals, this transaction will take time. If you are in a rush to purchase, a short sale property may not be in your best interest.

Don’t forget, short sale properties do close. The better prepared all parties are, the more chance of a smooth and expeditious escrow!

Interest Rates Drop Again, Is It Time To Refinance?

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Interest rates are at unbelievable lows right now and many property owners are taking of advantage by refinancing their current mortgages.

Have you thought about refinancing? Will it help your financial position at this time?

Lenders charge a fee for you to refinance your loan. These fees are known as “points”.  Points are upfront interest paid to the lender, calculated on the amount of money you borrow.

1 point = 1% of your borrowed money.

If you had a loan of $450,000 and you were going to be charged 1 point to refinance, that would equate to $4,500.

1% of $450,000 = $4,500

If you had a $450,000 mortgage, at a current rate of 6%, your monthly payment would be $2698.  If your lender was going to charge you 1.5 points to refinance to the current market rate of 3.5%, it would cost you $6,750.  Once completed, your new monthly payment would drop from $2698 to $2021, a decrease of $677! Wow!

Your monthly savings would be so great, that you by your 10th payment at your lower interest rate, you will have recouped the $6750 it originally cost you to get the lower interest rate, a wise move on your part!

While the refinance did wonders for you, that isn’t always the case. Take the scenario with your neighbor.

Your neighbor can’t believe how much you are saving and wants to refinance as well.

Currently they are paying 4% on their $450,000 mortgage, their monthly payment is $2,148.

Their lender is going to charge them a fee of 1.5 points or $4,500 to refinance to the market rate of 3.5%. After paying the $4,500, their monthly payment has decreased from $2,148 to $2,021, a monthly savings of $127. Realize here that they have just come out of pocket $4500 to save $127 a month. This isn’t anywhere close to the dramatic change you saw in your payment.

By the 36th payment (36 x $127 =$4,572) the monthly saving of $127 will equal the $4500 originally paid to secure the lower interest rate. In essence, it took them 3 years before realizing any savings from their new, lower rate. Possibly not the best use of their money.

A refinance includes an appraisal of the property, and a thorough examination of the borrower’s credit scores and financial strength. Think of it as going through the loan process all over again. As property values have decreased, appraisal value has been problematic at times, although new government regulations have tried to ease this.

Your lender will be able to advise you accordingly, just be sure you crunch the numbers and examine the many aspects a refinance presents.

Best of luck!

Kona Makai #6301: Exquisite Oceanfront Living!

I previewed Kona Makai #6301 recently on our West Hawaii Realtor caravan and was so impressed I had to share it!

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A top floor, oceanfront end unit with vaulted ceilings, Unit #6301 is the pride of the Kona Makai condominium project.

This spacious 2bed/2bath offering has been completely remodeled with cherry cabinets, slab granite counter tops, new tile flooring, redone bathrooms and all new appliances!

The master bedroom provides stunning ocean views and the unit is graced with an enormous 531 sq ft wrap around lanai that is ideal for enjoying Kona’s year round sunsets! To give you a better idea, that square footage is comparable to some of Kona’s smaller condos!  

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                                                                                                                                                                Up for a swim, kayak or some great snorkeling? Immediately below your unit, you have direct ocean access! Walk downstairs and climb on in!

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Can you imagine the vacation rental potential here?! WOW!

This is a lease hold property, with the lease due for renegotiation in 2019 and lease “expiration” in 2039. If you have questions about the lease and lease hold property, please contact me directly.

Offered for purchase at $449,000,  Kona Makai #6301 needs to be experienced in person to fully capture what a fantastic property this is, please contact me directly if I can arrange a private viewing for you!

Buyer Short Sale Tips: Preparing Yourself For Purchase

Short sales are a part of West Hawaii’s real estate inventory, and appear to be for the near future. There are a few ways you can prepare yourself before making an offer on a short sale that will improve your chances of securing that property.

Be financially prepared

Make sure you have spoken with your lender, know exactly what loan you are qualified for along with what documents and financial information you are going to need to qualify for that loan.

Your lender will be able to discuss what you can expect payments to be, the amount of down payment (if necessary) and exactly what price point your finances support.

You can request a pre-approval letter be issued to you, or you can wait until you have found the specific short sale property you intend to make an offer on. The seller’s lender will require a pre-approval letter to accompany your offer before they review it.

You want to be able to make a strong offer that you know can work for you financially. Valuable time is lost when people decide they like a short sale property, wait a few days to talk to their lender, see if they can get a loan, etc, etc. Meanwhile, that well priced short sale property you were interested in, is now under contract with another buyer, and also has an accepted back up offer.  I cannot stress enough how important this is. 

A large amount of cash on hand or earnest money down is not a necessity. When making an offer, a deposit of some kind is usually made as an act of  “good faith” by the buyer. This amount is individual to each transaction. There is no set norm, or minimum/maximum. Keep in mind, the larger the earnest money deposit, the more serious and vested the buyer seems,  however, you have no guarantee the short sale will be approved by the seller’s lender. You don’t want to unnecessarily over extend yourself. 

The more prepared you can be with your financing, the better.  

Don’t Make A Lowball Offer On the Property

The lender will have a good idea from multiple sources, as to what the relative value of the property is.  

The seller’s lender who will be approving the sale of the property will already have completed or will soon order a broker’s price opinion (BPO) on the property. This is a current market analysis provided by a licensed Realtor that gives the lender an opinion of value.

Along with that broker’s price opinion in some cases there may have already been an appraisal completed on the property by the lender.

In these buyer competitive times, you want to put your best offer forward, first. Making an outrageous offer, vastly different from what market conditions reflect is not to your benefit. 

The seller won’t accept your offer, another buyer will get the property, and you’ll continue looking. Be realistic. Make sure you have recent sale information for the neighborhood along with similar sale comparables to give you an idea of where a good offer point is. Your Realtor will be able to supply you with all of these facts.

On the chance that the seller does accept the below market value offer you have made, that contract will have to be approved by their lender.  After spending your valuable time waiting weeks or months for a short sale response, your original offer will almost certainly be countered at a higher price.  

 Patience is key

Short sales take time.

Once the purchase contract, seller financials and other necessary documents  are provided to the seller’s lender, the file is reviewed by the negotiator, loss mitigation department and investor(s) for approval.  These are all different steps in the process and accordingly, they take time.

If something is incorrect in the seller’s documents, or a document needs to be amended, re-signed or clarified the negotiator can put a delay on the file. This stops everything until the problem is addressed. Resending, refaxing, and resigning documents multiple times are things that do occur.  Banks have been overwhelmed with short sales, and they have struggled with to keep up with the volume.

On a positive note we are seeing much quicker short sale approval times. The key in all of this however, is the seller and their financial situation.

As a short sale buyer it is very important to know that the seller has their short sale packet ready to submit to their lender. You don’t want to be waiting for weeks as documents slowly trickle into the listing agent before everything heads off to the lender for sale approval. Before you write an offer have your Realtor inquire with the listing agent as to the seller’s short sale preparedness.  What you want to hear is  “seller has all their documents ready, we are just waiting for an offer to submit to the bank”.

As you wait for approval make sure your Realtor checks in periodically with the listing agent for updates as to where your are in the approval process.

While you can find value in short sale properties, make sure you don’t limit yourself in your property searches. There are traditional sellers on the market right now who realize they are in competition with short sale offerings and have priced themselves accordingly. Don’t get caught in the “I’m only getting a deal if I buy a short sale” mindset!

There is great opportunity in West Hawaii’s real estate market, let me help you find it!