Karla Casey

The Peninsula at Hawaii Kai and the Colony at the Peninsula - Market Update. The Peninsula at Hawaii Kai and its Condos at the Colony the Peninsula is one of Hawaii Kai's newest development. The units were built during 2003 to 2005 on a peninsula in the Hawaii Kai area (East Oahu). The Colony are 1 to 3 bedroom condo units in buildings that are 4 stories high. The prices range from the high $300,000 to the high $600,000.

The Peninsula at Hawaii Kai are townhomes and single family homes, some of which are located on the marina. Depending on what side of the marina your unit is, you may have a boat dock in front of your home. The Villas start at about $600,000 and the large Executive Single Family Homes are about $1.6M.

The community has a recreation center, 2 swimming pools, exercise room and boat docks (waitlisted).

The newer construction of this development and its close vicinity to the marina, ocean, beaches, golfing, shopping and fine dining make it very desirable. They are only about 15 minutes from Waikiki and less than 30 minutes from the Honolulu Airport.

This year we not only saw a greater number of condos and homes sell in the Peninsula but also the prices have increased. Below is an analysis of the totals through December 6 of 2010. If you would like additional information on the Peninsula, please contact me at karla@kcaloha.com or you may see what is available by following this link to Peninsula at Hawaii Kai or checking out my website at www.CaseyHawaii.com.

Aloha and Mele Kalikimaka,

Karla Casey, REALTOR and Principal Broker
Casey & Associates located in Honolulu, Hawaii
808 366 4306
Karla@KCAloha.com
www.CaseyHawaii.com

HAFA! The Government's Way to Expedite the Short Sale Process. Is it a Reality or a Myth? If any of you have done Short Sales and was looking for a way to make the Short Sale process quicker and less frustrating and worrisome, you were probably like me. Excited about the HAFA program. The HAFA program promised, among many things, the following:

•1. An approved asking price prior to listing the property

•2. Faster process in getting approval on an offer

•3. Possibility of the owner not having to make any loan payments during the Short Sale Process

•4. Not have to worry about the property being foreclosed on during the Short Sale Process

•5. $3,000 to seller at closing

Back in July a friend contacted me and asked that I assist her in listing her home as a short sale. She had been working on a loan modification but realized that even with a loan modification they would not be able to keep their home. I met with her and told her about the new HAFA Short Sale program. I explained to her all the benefits of a HAFA program. She was excited and we went to work.

I was excited because I thought I would have something great to blog about - - HAFA promised quick responses. I could do weekly blogs on the process. Seeing that this is December and I started in July and this is my first blog, should give you an idea that things have not worked as promised.

I have broken down my experience in several blogs. Kind of like a TV show that ends with, "Tune in Tomorrow Night for the Continuation." Here is Part 1:

July 21, 2010: Called B of A with homeowner notifying them that the homeowner would like to take part in HAFA program and list their property for sale. After verifying a few things, B of A representative tells me and homeowner that she qualifies for the HAFA Program. (Allright!! We are on our way!) We were told we need to fax over the third party authorization and fax over a notice stating that the homeowner wants to cancel the loan modification. We are told to all back in a week to make sure the loan modification was canceled. With smiles on our faces, we eagerly faxed over the necessary documents.

July 29, 2010: Called B of A Loan Retention. Third Party Authorization not showing up. Transferred to Customer Service. They don't have Third Party Authorization in their system either. Told to check later. (Hum, sounds familiar.)

August 9, 2010: Short Sale Dept. has Authorization and indicates the loan modification has been cancelled. Suggested we contact HAFA program immediately. HAFA Department says that even though I have a Third Party Authorization, they will not start the HAFA program unless they talk to the homeowner directly and hear it in her own words that she wants to be in the HAFA Program. Cannot be handwritten. Has to be a by phone. (Strange. Okay. Whatever!)

August 10, 2010: Homeowner calls HAFA Department. We are instructed to upload all tax returns, financial info, hardship letter, etc. in Equator System. I asked how long it will take to get a suggested list price. Instructed that it will take about 30 days but to go ahead and list the property at a price that I believe is appropriate and see if we get an offer in the meantime.

September 3, 2010: Called HAFA Department to find out status. They can't find documents. Oh, wait, did find documents in Equator System but want me to upload them in Equator again and fax them as well. (Done)

•- - - Thought this may be a good time to blog about my experience. But I really didn't have any answers from B of A or the HAFA Department. Decided not to blog until I really had something to share with everyone.

September 9, 2010: Got offer. Called HAFA Department. HAFA tells me to hang on and that the homeowner is "not" approved for HAFA Program. I told them that on July 21^st, we were told that homeowner is "approved" for the HAFA Program. Representative informs me that all the documents have to go through B of A Underwriting and it should take 2 weeks to be Approved. (I thought the great thing about the HAFA Program, was that we don't have to do the B of A waiting game - - not true.) Told not to submit offer or Homeowner will be "kicked out" of the HAFA program. (Just want to remind everyone that I still do not have a suggested price either.)

September 21, 2010: Called HAFA Department. They will be expediting file for review because it is taking too long. (Oh no! I've heard this before in a "regular" Short Sale. Anyone that has done a Short Sale knows that "expediting" really doesn't mean anything. It's just a way to get you off of their backs.)

September 28, 2010: Called HAFA Department. Still under review.

October 6, 2010: Called Short Sale Department. HAFA is APPROVED!!! Asked if I can submit offers now. No. I have to wait until the appraisal is in. They also informed me that the homeowner should be receiving confirmation that the she has been approved for the HAFA program in a few weeks.

October 8, 2010: An appraiser called and he came to house to do the appraisal.

October 18, 2010: Still in underwriting stage with B of A. B of A says that they have not received the Appraisal. I told them that in the Equator System, the negotiator is Anthony Falzano and that I have emailed him several times with no response. I am told that Anthony does not exist. That if a file has not been assigned to a Negotiator, the system shows Anthony as the Negotiator. (Wow!!)

Recap: July to October equals 3 months into process. Still no suggested list price. Still cannot submit offers.

To be continued . . .

Karla Casey is Principal Broker of Casey & Associates
located in Honolulu, Hawaii
For more information on her and real estate in Honolulu or Maui go to www.CaseyHawaii.com

Hawaii Property Tax Information

In the State of Hawaii, there are 4 counties and each county has different tax rates and exemptions. The tax rates are calculated on the "assessed" value of the property. Real property is re-assessed each year. Below is information for the counties of Honolulu (Oahu) and Maui.

Honolulu Real Property Tax

Taxes are Due August 20 and February 20
Tax Year begins July 1
Exemptions, including Homeowner Exemptions must be filed by September 30 to take affect by July
Homeowner Exemption is $80,000
For 65 and over Exemption is $120,000 (only 1 owner has to be over 65)
There is also an additional exemption for low income families making less than $50,000 per year and for homeowners 75 and over

Maui Real Property Tax

Taxes are Due August 20 and February 20
Tax Year begins July 1
Exemptions must be filed by December 31 to take affect July
Homeowner Exemption is $300,000

Note: For Homeowner Exemptions:

For purposes of this section, "real property owned and occupied only as a principal home" means occupancy of a home in the County with the intent to reside in the County. Intent to reside in the County may be evidenced by, but not limited to, the following:

1. Occupancy of a home in the County for more than tow hundred seventy calendar days of a calendar year;

2. Registering to vote in the County;

3. Being stationed in the County under military orders of the United States;

4. Filing of an income tax return as a resident of the State of Hawaii with a reported address in the County; or

5. A mailing address consistent with the subject property.

The following lists the different tax rates for each county. Also, notice that there is a different tax rate for residential property, vacant land, second home, resort property, etc.

To Calculate Real Property Tax

The property tax on a $1,250,000 residence in Honolulu, which is a primary residence, the calculation is as follows:

• $1,250,000 assessed value
  - 80,000 exemption
  -------------
  $1,170,000 tax basis
  / 1,000
  -------------
  $ 1170
  x 3.42 rate
  ------------
  $ 4,001 per year
  

The Basics of Making an Offer

A written proposal is the foundation of a real estate transaction. Oral promises are not legally enforceable when it comes to the sale of real estate. Therefore, you need to enter into a written contract, which starts with your written proposal. This proposal not only specifies price, but also all the terms and conditions of the purchase. For example, if the seller offered to help with $2,000 toward your closing costs, make sure that's included in your written offer and in the final completed contract, or you won't have grounds for collecting it later.

REALTORS^® have standard purchase agreements and will help you put together a written, legally binding offer that reflects the price as well as terms and conditions that are right for you. Your REALTOR^® will guide you through the offer, counteroffer, negotiating and closing processes. In many states certain disclosure laws must be complied with by the seller, and the REALTOR^® will ensure that this takes place.

If you are not working with a real estate agent, keep in mind that you must draw up a purchase offer or contract that conforms to state and local laws and that incorporates all of the key items. State laws vary, and certain provisions may be required in your area.

After the offer is drawn up and signed, it is usually presented to the seller by your real estate agent, by the seller's real estate agent, if that's a different agent, or often by the two together. In a few areas, sales contracts are drawn up by the parties' lawyers.

What is in an Offer?

The purchase offer you submit, if accepted as it stands, will become a binding sales contract (known in some areas as a purchase agreement, earnest money agreement or deposit receipt). So it's important that the purchase offer contains all the items that will serve as a "blueprint for the final sale." The purchase offer includes items such as:

• address and the legal description of the property
• sale price
• terms: for example, all cash or subject to you obtaining a mortgage for a given amount
• seller's promise to provide clear title (ownership)
• target date for closing (the actual sale)
• amount of earnest money deposit accompanying the offer, whether it's a check, cash or promissory note, and how it's to be returned to you if the offer is rejected - or kept as damages if you later back out for no good reason
• method by which real estate taxes, rents, fuel, water bills and utilities payments are to be adjusted (prorated) between buyer and seller
• provisions about who will pay for title insurance, survey, termite inspections, etc.
• type of deed to be given
• other requirements specific to your state, which might include a chance for an attorney to review the contract, disclosure of specific environmental hazards or other state-specific clauses
• a provision that the buyer may make a last-minute walkthrough inspection of the property just before the closing
• a time limit (preferably short) after which the offer will expire
• contingencies, which are an extremely important matter and that are discussed in detail below

Contingencies - "Subject to" Clauses

If your offer says "this offer is contingent upon (or subject to) a certain event," you're saying that you will only go through with the purchase if that event occurs. Here are two common contingencies contained in a purchase offer:

• The buyer obtaining specific financing from a lending institution: If the loan can't be found, the buyer won't be bound by the contract.
• A satisfactory report by a home inspector: for example, "within 10 days after acceptance of the offer." The seller must wait 10 days to see if the inspector submits a report that satisfies the buyer. If not, the contract would become void. Again, make sure that all the details are explicitly stated in the written contract.

Negotiating Tips

You're in a strong bargaining position, that is, you look particularly welcome to a seller, if:

• you're an all-cash buyer
• you're already have a preapproved mortgage and you don't have a present house that has to be sold before you can afford to buy
• you're able to close and take possession at a time that is especially convenient for the seller

In these circumstances, you may be able to negotiate some discount from the listed price.

On the other hand, in a "hot" seller's market, if the perfect house comes on the market, you may want to offer the list price (or more) to beat out other early offers.

It's very helpful to find out why the house is being sold and whether the seller is under pressure. Keep the following considerations in mind:

• every month a vacant house remains unsold represents considerable extra expense for the seller
• if the sellers are divorcing, they may want to sell quickly
• estate sales often yield a bargain in return for a prompt deal

Earnest Money

This is a deposit that you give when making an offer on a house. A seller is understandably suspicious of a written offer that is not accompanied by a cash deposit to show "good faith." A real estate agent or an attorney usually holds the deposit, the amount of which varies from community to community. This will become part of your down payment.

Buyers: the Seller's Response to Your Offer

You will have a binding contract if the seller, upon receiving your written offer, signs an acceptance just as it stands, unconditionally. The offer becomes a firm contract as soon as you are notified of acceptance. If the offer is rejected, that's that - the sellers could not later change their minds and hold you to it.

If the seller likes everything except the sale price, or the proposed closing date, or the basement pool table you want left with the property, you may receive a written counteroffer including the changes the seller prefers. You are then free to accept it, reject it or even make your own counteroffer. For example, "We accept the counteroffer with the higher price, except that we still insist on having the pool table."

Each time either party makes any change in the terms, the other side is free to accept, reject or counter again. The document becomes a binding contract only when one party finally signs an unconditional acceptance of the other side's proposal.

Buyers: Withdrawing an Offer

Can you take back an offer? In most cases the answer is yes, right up until the moment it is accepted, or even in some cases, if you haven't yet been notified of acceptance. If you do want to revoke your offer, be sure to do so only after consulting a lawyer who is experienced in real estate matters. You don't want to lose your earnest money deposit or find yourself being sued for damages the seller may have suffered by relying on your actions.

Sellers: Calculating Your Net Proceeds

When an offer comes in, you can accept it exactly as it stands, refuse it (seldom a useful response) or make a counteroffer to the buyers with the changes you want. In evaluating a purchase offer, you should estimate the amount of cash you'll walk away with when the transaction is complete. For example, when you're presented with two offers at the same time, you may discover you're better off accepting the one with the lower sale price if the other asks you to pay points to the buyer's lending institution.

Once you have a specific proposal before you, calculating net proceeds becomes simple. From the proposed purchase price you can subtract the following costs:

• payoff amount on present mortgage
• any other liens (equity loan, judgments)
• broker's commission
• legal costs of selling (attorney, escrow agent)
• transfer taxes
• unpaid property taxes and water and other utility bills
• if required by the contract: cost of survey, termite inspection, buyer's closing costs, repairs, etc.

Your present mortgage lender may maintain an escrow account into which you deposit money to be used for property tax bills and homeowner's insurance. In that case, remember that you will receive a refund of money left in that account, which will add to your proceeds.

Sellers: Counteroffers

When you receive a purchase offer from a would-be buyer, remember that unless you accept it exactly as it stands, unconditionally, the buyer is free to walk away. Any change you make in a counteroffer puts you at risk of losing that chance to sell.

Who pays for what items is often determined by local custom. You can, however, negotiate with the buyer any agreement you want about who pays for the following costs:

• termite inspection
• survey
• buyer's closing costs
• points paid to the buyer's lender
• buyer's broker fees
• repairs required by the lender
• home protection policy

You may feel some of these costs are none of your business, but many buyers - particularly first-timer buyers - are short of cash. Helping them may be the best way to get your home sold.

Got a call the other day from my sister who lives in Oregon. She and her husband want to sell their home and move back to California. They have had it for sale for a while without any activity. Out of frustration, she called me and asked for help. In case you haven't noticed yet, I live in Hawaii.

You may wonder why she didn't call before. Sibling rivalry, you choose your friends not your family, etc. I don't know. I think I'm a pretty easy person to talk to without being judgmental - - oh yeah, she's my baby sister. Maybe a little judgmental : )

During the conversation, I found out that she has had it on the market for a year without any showings. After going through the positives and negatives of the property and because I don't know the Oregon market, I asked if she believed it was priced correctly. She said she did. We went on to discuss other things about the property and then I asked the question a different way, "did your agent show you some market comparables." She said that he had not but quickly added that she needed to get "X" amount of dollars when it sells. Okay!! Bingo!!! Here is the problem. Lil Sis just priced her property way above market value, roughly a $100K above market value on a property worth less than a half a million dollars.

I explained to her that thinking that way she may not be able to leave Oregon for another 20 years if she is lucky. We went over why pricing is important if you want to sell and about why its important if buyers need to get a loan, etc.

I referred her to an agent in her area to go over market comparables and to discuss what her property is worth to a buyer. I called Lil Sis after she met with the agent. The meeting went well but Sis still had a problem with pricing. What the agent said to her as she left was perfect!!! She told my sister to look through the multiple listings as if she was a "buyer" and see what she could purchase for $450,000 and then compare those properties with hers. It was a real eye opening experience for her. I am so going to use that line!!! Thank you Emma!!

Lots of Aloha,

Karla Casey
Principal Broker
Casey & Associates