Hawaii homes

My cousin's daughter started working at KGMB recently. When Barack Obama visited Hawaii in November, Ashley Nagaoka was on the scene, narrating the President-elect's activities during his vacation stay in Kailua. We were pretty thrilled just to hear her narration on TV.

Here's a video of Ashley covering Tadd Fujikawa at the Sony Open.

KGMB is also where we can find the most accurate surf forecasts on TV, from Guy Hagi.

Checkout the rest of the KGMB news crew.

Aloha, Mike Bates

Hawaii realtor

A friend of mine living on another Hawaiian island is in some financial distress. She moved out of her home and advertised it for rent. A suitable tenant was found and now the tenant is interested in buying the home. My friend asked me for some tips to sell the home via agreement of sale.

I've prepared several purchase contracts with agreement of sale provisions which were reviewed and approved by my broker. For various reasons, the purchase contracts were not executed. I'll share what I've learned and invite others to comment.

- A realtor can prepare the documents for purchase via agreement of sale. Since this owner has already found a prospective buyer she can consider hiring an attorney to prepare the documents and probably save some money.

- The buyer's monthly payment should be higher than market rent if the buyer has no significant downpayment.

- If the seller has a mortgage to pay on the property, ideally the monthly proceeds paid by the buyer will be sufficient to cover the seller's carrying costs (mortgage, real property taxes etc.)

- Agreement of sale interest rates can be expected to be above bank interest rates. The buyer is probably seeking seller financing because he/she is unable to get a loan from a bank. Therefore the buyer might anticipate paying a slightly higher rate for seller financing. Sellers usually would rather have their cash right away, rather than spreading the payments out over 10 to 30 years. A higher interest rate makes it "worth their while."

- The deed to the property is transferred when the seller is paid in full. Until that time, the seller retains title to the property. This means the seller must be sure the home is kept in good condition and the real property taxes are paid.

Aloha, Mike

Oahu MLS

Here's a tip to avoid getting ripped off. NEVER send money to Nigeria. OK?

A local family just lost approximately $2,500 when they contacted someone advertising a rental for an Aikahi Gardens townhome in Kailua. The true owner of the property had advertised the unit for rent on a couple of websites. The scammers copied the photos and description, placed them on craigslist with a lower rental amount and BINGO! somebody took the bait.

It's kind of hard to believe that a renter would fall for this, but it does happen. The prospective renters were looking for a low priced rental and this unit seemed like everything they wanted and for much less than comparable rentals in Kailua.

The prospective renters sent their payment to Nigeria. The alleged owners then claimed that the keys were lost in the mail and authorized the renters to hire a locksmith and deduct the charges from the next month's rent. The renters with contract in hand called a locksmith and had the locks changed.

Here's where it gets interesting!

The actual owner of the property was out of state and returned to Kailua to check on her townhouse. Her key didn't open the door, so she looked through the window and noticed boxes and a TV set in the living room. She called the Kailua police department and they entered the unit, finding more furniture upstairs.

Later that evening, a man came to the townhome with more boxes. The police confronted him and he explained how he had rented the unit from the owner, who is living in Nigeria! The police informed him that he was duped and he'd have to move out. Since the "tenant" was acting in good faith (believing that he had a valid rental contract) he was not charged by police.

The Kailua Police Department has no jurisdiction in Nigeria, so the duped tenants are out $2,500 without recourse. Meanwhile, the actual owner of the property has incurred costs to clean the unit, change the locks and warn others not to fall for the scam. She has tenants paying market rate scheduled to move in next week.

Tip-offs to ripoffs

1) Don't send money to Nigeria.

2) The duped tenants thought they were paying $1,200 per month rent for a three bedroom, two bath townhouse in Kailua. Market rents for similar properties are $1,950 per month. Think about that carefully before sending payment to Nigeria. Oh yeah, and see #1 above!

3) The false advertisements also said the "owners" wanted tenants with the "fear of God." It's against the law to discriminate based on religion. A Savvy property owner should know that and so should a prospective tenant.

Renters, please spend your money carefully so that you can one day buy your own property and enjoy the benefits of home ownership.

Aloha, Mike Bates

In recent months there's been a trend with Active real estate listings on Oahu. These days, when the seller gets an offer and the property goes into escrow, the listing is often kept on ACTIVE status. This indicates to buyers and their agents that the property is available.

Customers see the listings, ask their agents to arrange showings and often learn that some of the properties are in escrow. That's a disappointment for many.

Was there a rule change? Why are nearly all of the big brokerages doing this now?

Actually, there's no change in the rules. Anytime a property changes status (Active to Pending, Pending to Sold) the seller's agent is supposed to prepare a "Status Change Form" and have the sellers sign it. Once the form is signed, the agent is supposed to input the change to the Oahu MLS system within four days.

Oahu's real estate market is slow and buyers often have problems obtaining financing or just get cold feet. For that reason, many brokerages are leaving properties' status as ACTIVE until they actually sell.

I understand the logic and applaud the brokers for doing what they believe is right to sell their listings. On the other hand, my feeling is that it's most appropriate to change a property's status to ACTIVE CONTINUE TO SHOW, which gives the buyer's agent a heads up that there's already an offer. This helps the agent because he can quickly explain to the buyer that there's already an offer prior to calling the seller's agent. The seller's agent also appears to be more "up front" and less sneaky, something we realtors should avoid. We don't want customers to equating us with used car salespersons!

Aloha, Mike

Honolulu homes

Hawaii's airline market has turned upside down and all around in the last year or so. Aloha Airlines went out of business and then our major carriers were back down to two, Hawaiian Airlines and go! Airlines.

Subsequently, Mokulele Airlines expanded from turboprop service to jet service. This greatly upset go! management, because Mokulele was participating in a codesharing agreement with go! for some of the smaller routes, such as flights to Hana and Kapalua on Maui.

With fuel prices declining, the interisland air carriers have started a new price war. One way fares are as low as $27 plus tax! Maybe it's not good for the airlines to have such low fares, it sure helps the cash-strapped travelers though. Of course the lowest priced seats are limited on each flight.

Next week I'm flying to Maui for some work. The best ticket (price and time of day) from Honolulu to Kahului cost $36.28 plus tax for a total of $45.10. Returning from Maui to Honolulu on the same day, go! is charging $25.81 plus tax for a total of $33.85. That works out to $79.85 roundtrip with tax! These airfares are about what we were paying more than 10 years ago for interisland flights.

Take advantage of the deals while they're being offered.

Aloha, Mike Bates

Hawaii realtor