Realtors in Hawaii use a standard 14 page Purchase Contract when preparing an offer, on behalf of a client, to purchase real estate in Hawaii – see the contract right here.

The Purchase Contract includes various contingencies which allow the Buyer to terminate the contract within certain timeframes with full refund of any deposits made towards the purchase.

A contingency is a “condition that needs to be satisfied” (e.g. Buyer’s approval of the home inspection) or an “event that needs to take place” (e.g. Buyer receives a termite inspection report by a certain date) before a party is obligated to proceed with the contract. Often a contingency is deemed waived if the Buyer does not terminate the contract within the contingency time specified in the contract.

The Purchase Contract has a number of blank spaces where the Buyer fills in the number of days for completion of each contingency. In other words, the contingency timeframes are negotiable – not a fixed number of days. The contingencies reviewed in this post include a suggested range of days.

Buyer’s contingencies outlined in the Purchase Contract can be grouped as “Contingencies Under Buyer’s Control” or “Contingencies Not Under Buyer’s Control”.

Contingencies Under Buyer’s Control
These contingencies are subject to Buyer’s review and approval within the specified contingency time period. The Buyer may cancel the Purchase Contract based on these contingencies within agreed upon timeframes – as outlined in the Purchase Contract – without being subject to some other event occurring.

Home Inspection (J-1): Applicable for condos and homes and the most commonly used contingency to cancel the Purchase Contract.

Typically a 7 to 14 day contingency where the clock starts ticking from the moment Buyer and Seller have a fully executed Purchase Contract. The Buyer will usually hire a professional home inspector at Buyer’s expense early during the escrow period. Average charge for inspection of a 2 beds / 2 baths property is $400, although every inspector has their own cost structure.

If the inspection reveals any issues, a Buyer may try to negotiate with Seller and request a credit, or ask the Seller to fix the issues. Seller is, however, not obligated to accept Buyer’s requests. Irrespective of the inspection outcome – even if the report does not show any issues – the Buyer has a right to cancel the Purchase Contract based on this contingency (J-1). The contract merely states “If Buyer disapproves of the inspection…..” – and a Buyer can certainly disapprove of an inspection, irrespective of what the inspector says or writes in his report.

Seller’s Disclosure Statement (I-1 to I-8): Applicable for condos and homes.

Typically a Seller will have 7 to 10 days to provide Buyer a copy of the 5 page Seller’s Real Property Disclosure Statement – see it here – which must be completed by the Seller.

The Disclosure Statement is a list of about 100 questions the Seller answers by checking boxes “Yes”, “No”, “NTMK” (not to my knowledge) and “NA” (not applicable). When Seller answers “Yes” then Seller must provide a written explanation. Sample questions include: Any litigation affecting the property? Is short-term rentals allowed? Any special assessments in place? Any improvements done without building permits? List defects, repairs & replacements? Any signs of termite damage?

A Buyer typically has the right to cancel the Purchase Contract for 7 to 12 days from the date Buyer receives Seller’s Disclosure. Paragraph I-4 reads in part “Upon receipt of the Disclosure Statement…..Buyer shall have X days to examine the Disclosure Statement….and to rescind this Purchase Contract.”

Association Docs (M-1): Applicable for condos and sometimes homes (if part of an association).

Association Documents are ordered and paid by Seller (typically about $400), ideally ordered as soon as the escrow period begins, and from the date the order is placed it normally takes 5 to 10 business days to receive the documents.

With regard to condos, Association Documents normally include the declaration, bylaws, house rules, financial statements, insurance summary, board meeting minutes, project information form (form filled out by the managing agent, which may address if there are any special assessments in place, litigation, etc) and other documents.

Upon receipt of the Association Docs, the Buyer typically has the right to cancel the Purchase Contract for 7 to 12 days. The last paragraph within Paragraph M-1 reads in part “If within the review period of X calendar days of Buyer’s receipt of the documents Buyer does not accept the Property based on information contained in the documents, Buyer may elect to terminate this Purchase Contract….”.

Title Report (G-2): Applicable for condos and homes.

The escrow company will order a Preliminary Title Report, which outlines possible outstanding mortgages and liens on the property. As an example, there could be a Mechanic’s Lien on the property, which may be a contractor claiming the owner of the property owes him money. Such liens could possibly derail a sale or, as in most cases, escrow will settle the amount owed at closing from Seller’s proceeds.

Upon receipt of the Preliminary Title Report, a Buyer typically has the right to cancel the Purchase Contract for 5 to 7 days. Paragraph G-2(a) reads in part “If Buyer is not satisfied with the Preliminary Title Report, Buyer may elect, within X days of Buyer’s receipt of the Preliminary Title Report, terminate this Purchase Contract….”.

It is uncommon for a Buyer to cancel the Purchase Contract based on the Title Report if the Preliminary Title Report does not indicate any issues.

Inventory List (E-3): Only applicable for properties sold with furniture and/or additional inclusions.

Typically a Seller will have 3 to 7 days to provide Buyer an Inventory List, outlining furniture & more included with the sale. Upon receipt of the Inventory List, a Buyer typically has the right to cancel the Purchase Contract for 1 to 5 days. The last sentence of Paragraph E-3 reads in part “If Buyer is not satisfied with the Inventory List, Buyer may elect, within X days of receipt of the inventory list, to terminate this Purchase Contract…..”.

It is uncommon for a Buyer to cancel the Purchase Contract based on the Inventory List.

Rental Documents (N-1): Only applicable for properties where Seller has a rental agreement with a property management firm and/or Seller currently has a tenant in the property or has tenants booked to use property at some future point.

Typically a Seller will have 3 to 7 days to provide the Buyer rental related documents. Upon receipt of the Rental Documents, Buyer typically has the right to cancel the Purchase Contract for 5 to 7 days. Paragraph N-1 reads in part “If within X days of receipt of such documents, Buyer does not accept the Property based upon information contained in the selected documents, Buyer may elect to terminate this Purchase Contract….”

It is uncommon that Buyer cancels the Purchase Contract based on Rental Documents. However, on occasion, Seller may have a contract in place with a property management firm that has Seller locked in for a period of time and this may require Buyer to take over the property management contract, which Buyer may not always be willing to do.

Contingencies Not Under Buyer’s Control
These contingencies are subject to some other event taking place or lack of an event taking place during the transaction. In other words, a Buyer may only obtain a right to cancel the Purchase Contract based on these contingencies if a certain event occurs or for the lack of a certain event occurring in other cases.

Financing (H-3): Only applicable for Buyers who intend to use financing for a purchase.

If Buyer is unable to obtain a Conditional Loan Commitment Letter by a certain date – outlined in Paragraph H-4(c) – then Buyer may cancel the Purchase Contract prior to the date outlined in H-4(c).
If Buyer has met all conditions outlined in the loan commitment letter, but lender fails to fund prior to closing, then Buyer may elect to terminate the Purchase Contract pursuant to Paragraph O-3. O-3 is a contract clause that gives a party (in this case Buyer) the right to cancel the Purchase Contract after a deadline. O-3 typically gives a party 1 to 7 days to cancel the Purchase Contract beyond the deadline of the contingency.

Termite Inspection (L-2 & L-3): Applicable for condos and homes.

Buyer selects termite inspector and Seller pays. A professional termite inspector may charge about $350 for a 2 beds / 2 baths property, although every inspector has their own cost structure.

If the termite inspection report indicates active / live termite infestation, then Seller shall order and pay for the recommended treatment and proof of completion shall be provided to Buyer no later than 5 days prior to the scheduled closing date. Failure to do so and Buyer may cancel contract based on Paragraph O-3.

In the event the termite inspection report indicates there is visible damage to the property caused by the termite infestation and the damage directly, substantially or adversely affects the value of the property, then Seller shall make disclosure under Paragraph I-2, a clause related to “Later Discovered Information”. When does termite damage substantially affect the value of a property? That could be a point of dispute between Buyer and Seller.

Survey (K-2): Only applicable for homes.

Seller shall hire a Land Surveyor licensed in the State of Hawaii. A professional Land Surveyor may charge about $850 to do a survey, although every Land Surveyor has their own cost structure.

The Land Surveyor shall survey and identify property boundary points and make a map that shows the perimeter of the property and any improvements near the perimeter.

The purpose of the survey is to identify if there are any encroachments. In Hawaii, an encroachment is considered a property which intrudes on to a neighboring property by more than 6 inches (most commonly walls). If the intrusion is 6 inches or less it is considered “de minimis” – too small of an issue and nothing needs to be done.

If there is an encroachment (could be Seller’s wall encroaching on neighbors lot or vice versa) then Buyer can accept it as is or Buyer can instruct Seller to either remove the encroachment (not always feasible with walls) or instruct Seller to get an encroachment agreement in place with the neighbor. If Seller doesn’t follow through and get Buyer’s request completed within “X” days prior to closing, Buyer may elect to terminate the Purchase Contract pursuant to Paragraph O-3.

A Final Remark
This contract contingency overview is meant to give Buyers a sense of the various ways they may be protected when under contract with a Seller in the State of Hawaii.

Keep in mind, each transaction is unique and for many transactions there are nuances that need to be interpreted and considered beyond what is outlined in the above.

Feel free to ask questions in the comments section below.

Disclaimer: This information is for general information purposes only and should not be relied upon in making any decisions. Always consult with your attorney for advice.

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The North Shore of Oahu is an undeniably beautiful, special place. Oahu residents and visitors alike make trips to the North Shore to enjoy the beaches and scenery, unwind, and escape the faster pace of life you find in Honolulu and the rest of the island. Spending time on this part of the Oahu, whether it’s a day, a week, or a month, makes almost everyone fantasize about picking up and relocating. Here, we’ll go over the wonderful aspects of the North Shore and why, for some people, it’s the perfect place to live.

1. Slow, country lifestyle
We’ll say this first and foremost: if you like the city, the convenience of stores, coffee shops, and urban conveniences close by, the North Shore is a great place for you to get away but probably not the place you’ll want to call home. It’s not a “small town” in the geographic sense, stretching over 10 miles, from Kahuku to Kaena Point. However, it’s kept it’s country charm, is refreshingly devoid of anything resembling a big city, and residents intend to keep it that way. Short term visitors constantly come and go, but the locals and residents definitely know each other.

Surf Shop on Kamehameha Hwy

There is one road that runs into, out of, and through the North Shore, Kamehameha Highway. Anywhere you need to go in this area is either on, or right off of, this road, where the speed limit is 25-35 mph. Even if you’re only going a few miles, the speed limit and traffic can make your trip longer than you’d probably expect. The North Shore has a couple of towns, Laie and Haleiwa, with markets and restaurants, and there’s a grocery store, Starbucks, and a few shops across from Sunset Beach. Unless you take a drive into Town (anywhere outside North Shore), those are your shopping options. Even though towns like Mililani, Pearl City, and Honolulu are just 10-25 miles away, getting to them from takes 30 minutes to an hour. This is ideal for anyone who wants to be far away from city life, but anyone who will be working and commuting on a daily basis may find the drive to be too much day after day.

2. Surfing
The North Shore is known as the surfing mecca. Breaks at places like Sunset Beach, Waimea Bay and Pipeline are home to the biggest, most epic waves you’ll find on island. Every winter, surfers from around the world head to the North Shore for the winter season and contests including the Vans Triple Crown of Surfing. Fortunately for everyone who isn’t a pro surfer, the North Shore is also home to surf breaks with smaller waves and, when there aren’t surf advisories, for beginner and intermediate level surfers to paddle out. Even if you never intend to jump on a board, watching from the beach is truly exciting. Many of the breaks are close to the beach, which allows spectators watching on the beach to see much of the action.

Kite Surfer

We strongly suggest talking to the lifeguards on duty about surf conditions and following their recommendations. They’ll be able to advise you about when it’s safe to get in the water, areas of the beach you should avoid, and beaches that have calmer water if that’s what you’re looking for.

3. Haleiwa Town

Haleiwa Store Lofts

Haleiwa is the town center of the North Shore. This is a popular tourist spot, full of boutiques, gift shops, restaurants, cafes, and North Shore staple, Matsumoto’s Shave Ice. Despite new buildings and renovations of existing shopping areas, Haleiwa has kept its quaint, small town charm. There are no buildings higher than 2 stories, the plantation-style architecture is picturesque and inviting, and everyone seems to be in a good mood here. It’s a great town to stroll around and, while it’s busy during the day, it quiets down at night after the tourists head back to Waikiki.

Haleiwa Joe’s

Restaurants like Haleiwa Joe’s and Haleiwa Beach House offer excellent menus and a nicer atmosphere than you’ll find at other places. (However, it’s still the North Shore, where nothing is super fancy.) Other casual options offer burgers, pizza, sushi, and seafood dishes. Some of the food trucks in Haleiwa serve popular dishes that and can be enjoyed on picnic benches or taken to go. Haleiwa is also fairly quiet in the morning, and residents enjoy grabbing coffee and breakfast at places like Cafe Haleiwa and the Beet Box Cafe.

Beet Box Cafe

4. Casual Living
Granted, the lifestyle and dress code all over Hawaii is more casual than it is on the mainland, but the North Shore takes it to another level. Bathing suits, board shorts, t-shirts, cover-ups, and slippers (flip flops) are all you need here. “Dressing up” on the North Shore consists of an aloha shirt and khaki pants or shorts for men and a nice sundress for women. Closed toed shoes aren’t required anywhere. This is just how all North Shore residents live and it’s quite beautiful. You probably won’t know if the person you’re chatting with on the beach is a retired CEO with millions of dollars, a professional surfer, local born and raised on the North Shore, or someone sleeping in a van just to be close to the waves. The materialistic things that seem to hold so much significance everywhere else (nice cars, designer clothes, fancy jewelry) don’t matter here.

5. Mokuleia
This 6-mile stretch on the Western side of Haleiwa runs along the coast from Waialua to Kaena Point. It’s even less developed than and gets a lot less traffic than the rest of the North Shore, and residents like it that way. That in no way means the water and beaches aren’t beautiful; it just means a person has to want to get to Mokuleia because you’re not going to pass it on your way to a world famous surf location or North Shore landmark, and Kaena Point is literally the end of the road.

Mokuleia Beach

Residents choose Mokuleia over more well-known North Shore neighborhoods because it’s quiet and out of the way. The ocean is on one side of the road, farms are on the other side, and the Waianae Mountains are further inland. When the ocean is calm, Mokuleia attracts swimmers and snorkelers but, like all North Shore beaches, winter brings large waves, strong currents, and surfers. Kite surfers also head out to these waters when the wind is blowing.

Anyone looking for a North Shore neighborhood that is quiet, removed from the crowds and urban development, and really feels like it’s a world away could find their dream home at Mokuleia!

House in Mokuleia

6. The 7 Mile Miracle
The most famous and iconic area along the North Shore is the coast that runs from Sunset Beach to Haleiwa Beach Park. The 7 mile stretch along the Kamehameha Highway is where you’ll find Sunset Beach, Waimea, Pipeline, and other well known breaks in the surfing world including Log Cabins, Off The Wall, Backdoor and Rocky Point. This stretch of sandy beaches is called a miracle because it is so highly concentrated with surf breaks. There are 36 surf spots in this area, offering every kind of break: left and right, shore breaks, reef breaks, point breaks, and varying types of waves.

Sunset Beach

Beautiful, high end North Shore homes on the makai (ocean) side of the Kamehameha Highway offer either a backyard view of the water or a quick walk to the beach. Homes on mauka (mountain) side of the Kamehameha Highway, on the Pupukea hillside, offer elevated views of the water and coastline. While still close to the beaches, homes up here don’t deal with the thru traffic that homes at ocean level experience. These properties also sit on larger plots of land because, when development started in the mid-20th Century, parcels of land were divided into 1 acre or larger areas. The bike path along much of this stretch of road makes getting to various beaches or running a quick errand without a car easy and eco-friendly.

Pupukea Homes

Home in Sunset Beach

8. Sunset

Sunset at Sunset Beach

The North Shore is blessed to enjoy a beautiful sunset every day. Obviously Sunset Beach is an amazing place to watch the sun go down, but the view from any beach on North Shore is hard to beat. If you’re lucky enough to have a beachfront home, you can watch the sun sink into the water, with the sky full of brilliant colors as a backdrop, from the comfort of your backyard on a nightly basis. Everyone else can walk, bike, or park at any beach, take a walk along the water’s edge, or lay out a blanket, and take in the show. Surfers can paddle out for a sunset session or, when the water is calm, you can take out a kayak or stand up paddleboard and watch the sun melt into the water from the water.

9. Summer
Summer on the North Shore is seemingly never-ending days of sun, sand, and perfect beaches. The massive winter swells are replaced by calm, flat, turquoise blue water that is safe for anyone who knows how to swim. Explore amazing coral reefs at places like Sharks Cove, look for spinner dolphins paying in the water at Waimea Bay, and expect to see honu (Hawaiian Green Sea Turtles) in the water up and down the North Shore coast. The longer, warmer days give residents reason and opportunity to jump in the water and cool off, and athletes interested in sports that don’t require surfboards or big waves can take advantage of events like the North Shore Swim Series, Stand Up Paddleboard races, the North Shore Triathlon, and a variety of running races.

10. Farmers Markets

Waimea Farmers Market

Because the North Shore is considered the country, it’s fitting that there are a number of farmers markets up and down the coastline every week. While you’ll find produce and tropical fruit like papaya, mango, bananas and coconut picked just that day, the farmers markets also feature ready to eat food, homemade jams, local honey, and work by local artists and artisans. The markets can be community gathering places for local residents, surfers living here for the winter season, and visitors who stop in to check out what’s available. There’s often live music and the atmosphere is fun and friendly!
Sundays: 1-5pm, Haleiwa Town http://www.liliuokalanichurch.org/
Thursdays: 2-6m, Waimea Valley http://www.farmloversmarkets.com/
Saturdays: 8am-1pm, Sunset Beach Elementary School http://northshorecountrymarket.org/
9am-2pm, Waialua Sugar Mill

Hawaiian Fresh Farms at Waimea Farmers Market

The North Shore has so much to offer: untouched natural beauty, beautiful beaches, waves and surf breaks known around the world, and a laid back vibe that envelopes all who make their way here. Anyone looking for a respite from the stress, deadlines, hustle and bustle of everyday life, will find it here. Whether you’re looking to reside on the North Shore permanently or want a vacation home to get away to, take a drive up and down the Kam Highway, figure out which beach or area you want to be the closest to, and start dreaming about the sunny days, panoramic views, and peaceful evenings that await you!

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This property – Kainalu PH 8B-C – was just listed by Marcel Chan (R) for $5,295,000 and is arguably the most spectacular and private condo located along Diamond Head’s famed Gold Coast.

Kainalu is the last building on the Gold Coast, located in the most quiet, private and serene spot along this incredible stretch. The unit offers offers wrap-around 180 degree picture perfect ocean views from all bedrooms and living room.

This elegantly remodeled ‘Trophy Property’ is a 3 bedrooms / 4 bathrooms created from combining 2 residences (Kainalu 8B and Kainalu 8C) and comes with 2 parking covered stalls, an very experienced on-site manager and private acccess to a pristine sandy beach resting against Kainalu.

Kainalu is fortunate in having its own seawall, which was recently upgraded and it looks great.  Most other buildings along the Gold Coast is located along a stretch with a shared seawall, which has had its fair share of issues.

Photos From the Residence

For more information please contact Marcel. His contact details are right here.

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This property – Kuilima East #102 – located on Oahu’s North Shore was recently listed by Marcel Chan (R) for $650,000. Kuilima East is part of Kuilima Estates located inside Turtle Bay Resort.

Turtle Bay is one of 3 resort neighborhoods on Oahu – Waikiki and Ko Olina being the other 2 resort neighborhoods – and is the most remote from the busy city lifestyle. Turtle Bay living is all about serene peaceful living right by an awesome golf course and near several of Oahu’s most incredible beaches.

Kuilima East #102 is in mint condition – a turn key, newly remodeled and furnished (2013) split level townhome, directly fronting the Fazio Golf Course. As a bonus, the home has not been rented out for the past 6 years.

Turtle Bay has recently been acquired by the Blackstone Group, reportedly for close to $300M with. They have plans to develop two more ocean front resort properties adjacent to the Turtle Bay Hotel, which is expected to bring more dining and activity options to this magical resort.

A Few Pictures From the Residence

For more information please contact Marcel.

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This property – Waihonua #809 – was just listed by Marcel Chan (R) for $958,000.

Waihonua is one of the most desirable and popular luxury condos  in Kakaako, and the newest condo (late 2014) within Kakaako’s super block, a stone’s throw from Ward Village, Ala Moana Shopping Center and Ala Moana Beach Park. The building has stunning resort like amenities – heated infinity pool, whirlpool, BBQ cabanas, well equipped fitness center, movie theater, party room with a full kitchen, 2 guest suites & more.

Waihonua 809 is a two bedroom, two bath condominium in excellent condition with a very bright and open floor plan. It offers city, mountain and peek-a-boo ocean views! Compare this price to nearby new Kakaako condo developments, this is an incredible value.

A Few Pictures From the Residence

For more information, please contact Marcel.

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Did you know that 50% more Oahu residents live in condos instead of single-family homes?
Last year, 5,824 condos sold versus 3,908 single family homes. Condo living on Oahu is a popular and often more practical lifestyle choice.

Then why do many first-time inquiries from the US mainland and other countries express their preference for single-family homes? At least this is true initially until all options are explored and the pros and cons considered. Perhaps some buyers have only ever lived in single-family homes and never thought about condo living before? Others may foster preconceived ideas about condo living as being “less desirable.” This ties in with the prevailing myth that “single-family homes appreciate faster than condos.” A myth that does not apply to the high-value Honolulu real estate market. According to the Honolulu Board of Realtors, Oahu’s median sales price appreciation compares as follows:

The long-term trend from 1984 through 2017 shows single-family homes and condos have been appreciating in lock-step, equally well at 4.84% and 4.67% annualized.

Some astute buyers are selecting condos instead of single-family homes because Honolulu offers some dazzling luxury condos, an attractive alternative to a limited and sometimes dated inventory of single-family homes. Condo living is no longer considered less desirable. Instead, condo living is modern, hip, and practical. This housing trend is expected to continue.
The new lifestyle mantra is: ‘Live, work, and play in town, where you can walk to everything.’ Long commutes are just getting old. Who wants to sit in traffic to go to work, get groceries, or enjoy a movie?

Before we explore the pros and cons of condos vs. homes, let’s understand what a condo is:

• A CPR (Condominium Property Regime) refers to a specific type of ownership where you own a ‘condominium unit’ and a percentage of undivided interest in the common and limited common elements of the CPR project. A ‘condo unit’ could either be a detached single-family home, a townhouse, or an apartment style unit above or below another unit.
  Common elements could be driveways, landscaped grounds, pool, clubhouse or an elevator in a highrise. The land under and adjacent to your unit is either a common element or a limited common element for your exclusive use.
  The key point with a condo is the land is proportionately owned by all owners in the project.

Because Hawaii’s land is limited and expensive, sharing the underlying land with other condo owners allows for the development of housing options that would otherwise not be practical. Here is a list of Diamond Head condo developments. I bet you didn’t know some of these are actually condos!

In neighborhoods where zoning allows high-density vertical construction, single-family homes make no economic sense. The principal of ‘highest and best use of the land’ suggests the CPR ownership concept is the most feasible approach.

Honolulu’s maximum building height limit is 350 ft in Waikiki, and 400 ft in Ala Moana, Kakaako, and downtown. Coincidently, these urban neighborhoods also offer some of Honolulu’s most desirable conveniences, including Hawaii’s largest beach park and Hawaii’s largest shopping center. No wonder Honolulu high-rise condos are hot.

Let’s compare condos and homes in regard to space, privacy, maintenance, location, and amenities, to determine what might be the best fit for your lifestyle.

1) Space and Privacy

Maybe that’s why you wanted a house in the first place? You need space and privacy, which, you think is not available in a condo. Granted, the words ‘condo’ and ‘shared land’ do not evoke a sense of spaciousness. But that does not necessarily mean condos can’t be big or private. Consider Waiea, completed in 2016. The 2- and 3-bedroom condos are between 2,000 and 3,000 sq ft, adequately sized for most. The ocean facing -00 and -01 stack units are serviced by a designated elevator allowing you directly access to your private foyer before entering your unit. If you need more space, you could combine two adjacent units, as one of Kristian’s client has done, with over 5,000 sq ft of dramatic ocean views from every room. If you still need more space and privacy, consider the 10,000 sq ft Waiea GPH 36 with private rooftop pool and no adjacent neighbors, except below. It is like a house in the sky. The ultimate in lifestyle and design, with plenty of space and privacy. Yet, this condo is located in the middle of Honolulu, across from Hawaii’s largest beach park. Are you intrigued?

2) Maintenance

Buyers often tell me: “I don’t want to pay high HOA maintenance fees.”
Single-family homes do not require an HOA maintenance fee unless your home is in a private community like Hawaii Loa, Napali Haweo, and a few others. Instead of a maintenance fee, single-family homes require, ..well, maintenance. Owning a house gives you maximum control but the burden of maintaining is on you. That includes re-roofing every 25-30 years, resurfacing the pool every 10-20 years, painting every 10 years or more frequently if your home is close to the ocean, yard work, pool service, security alarm service. In addition to water, sewer, electricity, cable, internet utility bills, you will need to pay for fire, hurricane, and flood insurance.
Don’t underestimate the total monthly costs to properly maintain your home. The benefit of full control of your home maintenance decisions comes with the responsibility to schedule workers or do the work yourself.

After carefully analyzing maintenance requirements, you will recognize that condo HOA maintenance fees are not so unreasonable. HOA fees typically include the building’s fire, flood, and hurricane insurance, as well as some utilities, e.g. water, sewer, cable, and internet. Honolulu condo maintenance fees typically run between ~$0.60 and ~$1.50 per sqft. Condo fees are mandatory and set by the AOAO. You have less control compared to owning a house, but also less burden because the building and grounds maintenance is done for you. The HOA also maintains the building amenities, an appealing benefit of condo living.

3) Amenities

Many condo buildings provide state of the art amenities that most single-family homes would not have. This could include a lap pool, hot tub, fitness center, sauna, yoga room, movie theater, tennis court, and more. When you live in a condo with a fitness center you might no longer need your 24-hour fitness membership. That saves you time, gas, and money. You don’t need to fight traffic to get to your health club. I live at the Watermark with a heated lagoon style pool, a fitness center, and a wonderful view from my 32nd floor lanai:

Watermark – Ala Moana / Sunset view from the 32nd floor

4) Location and Commute

“Location, location, location.” My wife and I used to own a gorgeous Koko Villa single-family home in Hawaii Kai. We loved our home but didn’t care for the twice daily 35-minute drive to work. We chose to minimize our commute and right-sized from our 2,000 sq ft home to a 1,112 sq ft 2-bedroom Watermark condo on the edge of Waikiki and the Ala Moana / Kakaako neighborhood.
For us, this is the most convenient location in the center of town where we want to be. There is no house available at any price in this location – within walking distance to the largest beach park and the largest shopping center in the state of Hawaii.
Condo living is a more practical and better fit for our family lifestyle. Our daughter attends a private school not far from our condo. Most major conveniences are within walking distance. As a result, I drive as little as possible, increasing productivity and family time. I cherish every minute not being stuck in traffic.
On Oahu there are more condos than homes representing a large selection of suitable options, especially if you desire to be in town. Are you still thinking you need a single-family home?

Kakaako Condos at Ala Moana Beach

5) Energy Efficiency, Convenience

Whenever a new highrise development is announced, concerned voices complain about traffic, pollution, and sustainable growth. Human psychology manifests itself with an attitude of: “Not in my own backyard. I was here first! How dare they build in my neighborhood and diminish my view.” From an energy efficiency and sustainability viewpoint, high-rise condo development easily beats single-family home urban sprawl development. If you spend more than 30 minutes in your car, twice a day, you know what I mean.
In addition, all new Kakaako condos aim for the prestigious LEED certification, the benchmark for energy efficiency, sustainability and reducing carbon footprint.
Granted, you could install a PV system on a single-family home and harvest the power of the sun.
However, the cumulative energy savings with in-town condo living add up. Today’s modern, efficient building designs with shared condo resources and amenities make condo living a more practical choice.

Modern condos might also be more secure. My wife never felt safe by herself in a large house when I worked long evenings. Our new condo features a 24-hour security guard, secure garage, keyed elevators, and a state of the art camera system. When we travel, we simply turn the water off, lock up and leave without worries. These are conveniences that give us peace of mind and freedom. Condo living suits us well.

Conclusion

Living in a condo or a single-family house is a lifestyle choice. Both condos and homes have pros and cons. Practicality and financial feasibility are in the eye of the homeowner. Carefully analyze your lifestyle needs vs. wants and consider all suitable options within your budget and your desired location. You might discover what others already have: Honolulu condo living offers some unique advantages worth considering. – Either way, we are here to help.

Let us know what you think. We love to hear from you! Reciprocate Aloha!  – Like, share and comment below. ~ Mahalo & Aloha

The post Hawaii Living – Condo Or Single-Family Home? appeared first on Hawaii Living Blog.

This overview of the Hawaii Real Estate Purchase Contract covers major parts of the contract in an easy to understand format with simple explanations. I will review highlights of the contract  and focus on key parts. If you want to read the entire contract click here. 

To keep things simple, I will reference a range of days typically used for the contingencies.

Review of Key Sections of the Purchase Contract

Page 1 (top part of page)
Items written by hand or typed out will override printed parts, in case there is a conflict.

A-1 (Agency Disclosure)
Dual agency occurs if the same agent or the same brokerage represents both Buyer and Seller in a transaction. In this instance, the agent or agents “must remain neutral in negotiations”. This means your agent (whether you are the Buyer or Seller) cannot advise on price, terms or negotiation strategy.

B-1 (Initial Earnest Money Deposit)
The default language in the contract states the initial deposit is due by the next business day after acceptance. We will often change this to 2 to 4 business days after acceptance. If Buyer is overseas, it may not be realistic to get funds wired into an escrow bank account by the next business day. The initial deposit is typically about 0.5% to 1% of the purchase price.

C-1 (Addenda)
List of possible addenda to be included with the contract.
The “AS IS Condition” addendum is the most commonly used addendum and included in the majority of accepted contracts. There is no law in Hawaii requiring Sellers to complete repairs before closing. The AS IS Condition addendum restates the Seller is not interested in making repairs or giving credits in lieu of: “I am selling my property as is, don’t bother me with any issues you may find during the home inspection”. Buyer can still ask Seller to make repairs or extend a credit at closing, although Seller can reject any such request from Buyer.

D-1 (Offer to Buy)
Date and time the Buyer’s offer to purchase expires.

D-2 (Purchase Price)
Schedule of Buyer’s payments due.
Initial deposit: See B-1.
Additional (2nd) Deposit: Typically 1% to 10% of purchase price and typically due 1 to 3 business days after J-1 (home inspection contingency) removal.
Balance of Cash: Due 2 business days prior to closing (if funds arrive late, then closing will be delayed).
Loan Amount: Lender typically wires the loan amount into the escrow account no later than 2 business days prior to closing.

CAUTION BUYER: Do NOT be late with any scheduled payments, as Seller can otherwise cancel contract based on Paragraph O-1, which means Buyer’s deposit(s) could be at risk.
If Seller has a strong back–up offer or regrets selling, a Buyer with late scheduled payments presents a great opportunity for Seller to cancel the contract.

E-1 Description
TMK (tax map key) number, is what the tax office uses to identify the property.
Check box whether property is fee simple or leasehold. Fee simple means permanent ownership. Leasehold means rights to the land reverts to land owner at a future date.
In this section we also write a brief property description, including number of bedrooms, bathrooms, parking etc.

E-2 (Inclusions)
Built-in furniture, attached fixtures, built-in appliances, if any, that are included with the sale.
This section has a list of about 20 items to check if included with the sale, such as washer, dryer, range, dishwasher, etc.

E-3 (Inventory List)
Seller must provide Buyer a list of furniture included with the sale, if any, by a certain date.
Buyer typically has 5 to 10 days to review and approve the list. If not satisfied, Buyer may cancel the contract based on Paragraph O-2.

F-2 (Scheduled Closing Date)
Scheduled closing date is the scheduled date the Buyer becomes the new homeowner. If the scheduled closing date falls on a day the Bureau of Conveyances is closed, then closing shall be on the following day when the deed, the legal document transferring ownership of title, can be recorded.

F-3 (Change to the Scheduled Closing Date)
Paragraph (a): Buyer and Seller typically agree either party may extend the contract for ‘reasons beyond their control’, typically by 7 to 10 days.
When Buyer requests an extension for reasons beyond Buyer’s control, Seller is likely to ask for reason for the delay of closing and normally accepts. In rare cases, Seller may argue the reason is not beyond Buyer’s control

F-4 (Escrow)
An independent neutral escrow company holds all funds deposited by Buyer, requests an attorney to prepare the deed, orders and reviews the title report and prepares the closing statements outlining all costs to Buyer and Seller.

F-5 (Prorations and Closing Adjustments)
Escrow prorates property taxes, maintenance fees, mortgage interest, tenant rent, etc. as of the closing date.  For instance, if a Seller has paid property taxes covering January through June of a given year and closing is April 15, then escrow charges the Buyer and refunds the Seller for property taxes covering April 15 through June 30.

F-6 (Closing Costs)
List of standard closing costs and allocation of costs between Buyer and Seller.
Examples:
A) Escrow fee is split 50 / 50 between Buyer and Seller,
B) Buyer’s standard title insurance is paid 40% by Buyer and 60% by Seller,
C) Conveyance tax (transfer of property ownership tax) is paid 100% by Seller.
D) Costs associated with the Buyer obtaining a mortgage are typically paid by Buyer.

F-7 (Notice of Conveyance Tax)
The conveyance tax paid by Seller is lower if the Buyer is purchasing the home to occupy as their principal residence. The Buyer has to make a selection to indicate if the property will or will not be Buyer’s principal residence.

F-8 (Assessments)
Buyer and Seller agree who pays for an assessment levied against the property before the acceptance date. An assessment could arise for a number of reasons, such as cost of making improvements to the property (new drain pipes, spalling repairs, new roof), cost of litigation, etc.
If an assessment is levied against property after the acceptance date, then Buyer and Seller need to agree within 5 days of both Buyer and Seller learning about such assessment. If Buyer and Seller can’t agree within the time period then either party may cancel the contract based on paragraph O-3.

F-12 (Keys to the Property)
Seller shall provide Buyer all existing keys and at a minimum 1 set of keys at closing.

G-1 & G-2 (Preliminary Title Report & Title)
Shortly after Buyer and Seller accept the contract by signing it, escrow orders a preliminary title report, which shows names of owners on title and if there are any outstanding mortgages and liens, etc. against the property. Escrow’s title company division carefully reviews the title report since the title company’s responsibility is to insure a clear title and issue a title insurance policy for the Buyer.
If Buyer is not satisfied with the preliminary title report, Buyer may cancel contract typically within 5 to 7 days of receipt based on Paragraph O-2.

G-3 (Vesting and Tenancy)
When listing the name of Buyer it may be worthwhile to write “NAME and / or assignee”. Let’s say Buyer’s name is “John Smith”, then consider writing “John Smith and / or assignee”, which would give John Smith the option to assign contract to someone else, without needing Seller’s approval. If we wrote “TBD” (to be determined) then we would need an amendment signed by Buyer and Seller.
In Hawaii we have 4 types of tenancies – 4 ways Buyer can hold title. For married couples “Tenants by the Entirety” is the most common type of tenancy and for an individual owner “Tenant in Severalty” is the most common type of tenancy. Learn more about the 4 types of tenancies here.

H-1 (No Contingency on Obtaining Cash Funds)
Select if Buyer has no contingency on obtaining the cash funds. Buyer shall provide proof of cash funds to Seller, typically within 2 to 4 days of acceptance. Proof of funds could be a letter from Buyer’s banker stating Buyer has sufficient funds for the purchase, or a bank statement that shows name of bank, Buyer’s name and balance ( make sure you white-out account number). Some clients show proof of highly liquid assets (stocks, bonds). However, the Seller can cancel the contract based on Paragraph O-3 if the proof of funds is not satisfactory to Seller, which is an ambiguous term. Rarely happens, but I have seen it happen.

H-2 (Contingency on Obtaining Cash Funds)
Buyer’s purchase is subject to necessary cash funds becoming available and Buyer must explain reason and list a date by which such funds will be available. If Buyer is unable to provide proof of available funds by a certain date then Seller may cancel contract based on Paragraph O-3.

H-3 (Financing Contingency)
If Buyer is unable to obtain a conditional loan commitment letter or is unable to satisfy all conditions of the loan within timeframes outlines in Paragraph H-4, then Buyer may cancel the contract based on Paragraph O-2.

 H-4 (Buyer’s Obligations)
Buyer must submit a completed loan application typically within 5 to 7 days of acceptance, obtain a pre-qualification letter typically within 0 to 3 days of acceptance, and provide to Seller a Conditional Loan Commitment Letter typically no later than 12 to 15 days prior to the scheduled closing date. Buyer also needs to provide Seller proof that all conditions have been removed, typically within 7 to 10 days of the issuance of such loan commitment letter, except those conditions Buyer can’t remove prior to closing.
If Buyer fails on either count, then Seller may cancel the contract based on Paragraph O-3.

H-5 (Seller’s Right to Cancel)
If Buyer fails to fulfill obligations outlined in Paragraph H-2, H-3 and / or H-4 with the timeframes specified, then Seller may cancel contract based on Paragraph O-3.

Section I (Seller’s Obligation to Disclose)
Hawaii law requires Sellers to fully disclose, typically within 5 to 10 days after acceptance, “any fact, defects, or conditions, past or present, that would be expected to measurably affect the value of the Property to a reasonable person.” This is typically done by the Seller completing a standard Disclosure Statement – about 100 questions – a way for the Buyer to learn about possible issues, defects, repairs or improvements (leaks, damages, remodel work, etc.) the Seller is aware of (click here to see the standard Disclosure Statement). The Seller is obligated to provide Buyer an updated disclosure during escrow with any later discovered information, if any, that had not already been disclosed on the initial disclosure statement.
If Buyer finds something that “directly, substantially, and adversely affects the value of the property”, Buyer may consider this later discovered information. Buyer may cancel the contract within the review / approval time period of the disclosure, the updated disclosure, and or later discovered information, based on Paragraph O-2.

J-1 (General Inspection of Property Contingency)
Buyer has the right to conduct a home inspection – typically by hiring a professional home inspector. Buyer may also have general contractors, concrete specialists, structural engineers and other subject matter experts inspect the home as well.
If Buyer is not satisfied with the inspection results, Buyer may cancel the contract within the specified time period, typically within 7 to 14 days after the acceptance date.

J-3 (Property Condition Maintenance and Final Walk Through)
Buyer can have a final walk-through inspection, typically no later than 4 to 6 days before closing, to verify the property is in the same condition as it was during the J-1 home inspection or as otherwise agreed with Seller. If the property is not in the same condition, then Paragraph J-4 shall apply. However, as addressed in Section I, if Seller becomes aware of defects or conditions that could “directly, substantially or adversely affect the value of the property” then Seller is obligated to disclose and Buyer may cancel based on Paragraph O-2 of the contract.
Would a missing light bulb require Seller to update Disclosure – probably not. Would a major leak damaging the entire kitchen and floors require Seller to update Disclosure – certainly. What about a damaged kitchen cabinet door where Seller argues it cost $50 to replace, but Buyer argues we can’t find the exact color of cabinet again and that significantly impacts the value of the property – that’s a tough call!

J-4 (Withheld / Collected Funds for Repairs / Maintenance)
If Seller fails to maintain the property in same condition as it was during the J-1 home inspection or as otherwise agreed in writing between Buyer and Seller, then escrow shall withhold 150% of the estimated repair cost from Seller’s proceeds at closing and Seller shall make needed repairs / corrections no later than as specified in the contract, typically within 0 to 5 day after closing.
If Seller fails to do so within the specified time period, then escrow shall release the withheld funds to Buyer.

J-8 (Removal of Items from Property)
Seller shall remove personal belongings and trash typically no later than 5 to 7 days prior to closing. If Seller fails to do so, then Paragraph J-4 shall apply.

J-9 (Cleaning)
Seller shall clean the property and have the carpets professionally shampooed typically no later than 5 to 7 days prior to closing. If Seller fails to do so, then Paragraph J-4 shall apply.

J-10 (Pet Related Treatment)
Seller shall have the property treated for fleas/ticks by a licensed pest control operator, after carpet has been shampooed. If Seller does not get this treatment done prior to closing, then escrow shall withhold 150% of the estimated cost from Seller’s proceeds. If Seller does not get treatment completed, typically 1 to 3 days after closing, then escrow shall release funds to Buyer.

K-1 (Staking – Boundary Points)
Applicable for single-family homes – not for condos.
Seller is obligated, at Seller’s cost, to have a land surveyor stake the Property. Buyer should understand staking is not the same as a survey, described in Paragraph K-2, and staking does not confirm if there are encroachments. It is recommended to select K-2 Survey instead of K-1 Staking.

K-2 (Survey): Applicable for single-family homes – not for condos.
Seller is obligated, at Seller’s cost, to have a land surveyor survey the property even if boundary points are visible and create a map that shows any improvements close to the boundary of the property.

K-3 (Boundary Encroachment): If there are encroachments then Buyer can accept such encroachment or ask Seller to either remove encroachment (not always easy – think of a rock wall) or get an encroachment agreement in place with the adjoining owner.
If Seller can’t cure the encroachment (removing or getting agreement in place) then Buyer may cancel contract within the specified time period based on Paragraph O-3.

L-1 (Scope of Termite Inspection Report): Buyer understands a termite inspection report is likely to only report visible evidence of live termites and is unlikely to address possible termite infestation in inaccessible areas. Seller agrees to disclose any current or past termite issues Seller is aware of.

L-2 (Termite Inspection Contingency): If box is checked then we typically check box for Buyer to select termite inspector and check box for Seller to pay for the inspection and a termite inspection report shall be delivered to Buyer typically 10 to 15 days prior to closing. If the termite inspection report reveals live termites then Seller shall pay for the recommended treatment. Buyer is only obligated to purchase the property if Buyer receives a termite inspection report saying there are no live termites or the recommended termite treatment has been completed at the latest 5 days prior to the scheduled closing. Otherwise, Buyer may cancel based on Paragraph O-3.

L-3 (Termite Damage): If the termite inspection report reveals visible damage caused by termites and the damage ‘directly, substantially and adversely affect the value of the Property” then Seller shall disclose per Paragraph I-2, which means Buyer may cancel contract based on Paragraph I-4.

M-1 (Contingency on Documentation Approval): Applicable for condos and homes managed by an association.
Seller shall provide Buyer a complete set of all current condo and or association documents at Seller’s expense, typically within 10 to 12 days from the Acceptance Date. Documents commonly include Bylaws, Declaration, House Rules, Approved Minutes of the last 3 Board of Directors meetings, Financials, Insurance Summary, etc.
If Buyer is not satisfied with the documents, Buyer may cancel the contract typically 7 to 10 days of receipt of these documents based on Paragraph O-2.

N-1 (Rental Documents): Applicable for properties with tenants or rental agreements in place.
Seller shall provide any existing Rental Agreements, Rental Management Contracts, Short Term Vacation Rental Reservations, etc., within the time period specified, typically within 3 to 7 days after the Acceptance Date.
If Buyer is not satisfied with the documents, Buyer may cancel within the specified time period, typically 5 to 10 days after receipt based on Paragraph O-2.

O-1 (Termination Due to Default): If Buyer is in default failing to perform as outlined in this contract, Seller can terminate the contract and Buyer’s deposits may be at risk. Seller can also seek compensation for damages.
If Seller is in default Buyer may cancel the contract and receive a refund of the deposits. Buyer can also seek compensation for damages.

O-2 (Termination Within Contingency Time Period): Either Buyer or Seller with the right to cancel based on the contingency may cancel the contract within the specified time period before the contingency expires. If the Buyer cancels within the time period, Buyer receives a refund of deposits paid. Unless canceled prior to the contingency expiration, the right to cancel has been waived.

O-3 (Termination After a Specified Contingency / Condition Time Period): Either Buyer or Seller with the right to cancel based on the contingency may cancel the contract within the specified time period after the contingency expires. If the Buyer cancels within the time period, Buyer receives a refund of the deposits paid. Unless cancelled within the specified time period after the contingency expiration, the right to cancel has been waived.

P-1 & P2 (HAPRTA & FIRPTA): Learn about HARPTA & FIRPTA here.
If Seller is not a resident of Hawaii then Buyer must ensure escrow withholds HARPTA from Seller’s proceeds and escrow pays such funds to the department of taxation. HARPTA is a withholding mechanism and not an actual tax.
If Seller is a foreign person then Buyer must ensure escrow withholds FIRPTA from Seller’s proceeds at closing in addition to HARPTA withholdings and escrow pays such funds to the IRS.
In reality a Seller will fill out HARPTA & FIRPTA declaration forms during the transaction, clarifying if HARPTA and/or FIRPTA withholdings are required. Buyer reviews and acknowledges Seller’s completed HARPTA & FIRPTA declaration.
If the Hawaii Tax Department and / or the IRS do not receive any required HARPTA and or FIRPTA withholdings from the Seller’s proceeds, the Buyer could be held responsible!

Q (Special Terms): List of any additional “special” terms to be part of the contract.

This sums up my simplified review of the Hawaii real estate Purchase Contract. I hope it has been helpful. Feel free to leave feedback in the comments section below.

Disclaimer: This information is for general information purposes only and should not be relied upon in making any decisions. Always consult with your attorney for advice. Also, keep in mind, the Purchase Contract, rules, regulations, guidelines, laws etc frequently changes.

The post Nuts & Bolts of Hawaii’s Real Estate Purchase Contract   appeared first on Hawaii Living Blog.

A client recently asked me if they should sell their Honolulu properties since values have increased significantly. Oahu’s single-family home and condo median sales prices have been increasing by 4.84% and 4.67% respectively, on average per year, since 1985.

Before I share with you the only three reasons why I would sell my rentals, let’s clarify Hawaii’s market reality.
In general, an increase in the value of an appreciating asset like real estate is never reason enough to sell. Just because the value went up doesn’t mean it is going to reverse. If the fundamental reason for the increase remains in place, the value could increase further. This especially applies to Hawaii real estate, a global commodity with limited supply and endless demand. Continuing strong demand and limited supply suggests values for Hawaii real estate will continue to increase.
Let’s take an example. Since April 2017, every 1-bedroom condotel in the popular Ilikai, Ilikai Marina, Waikiki Banyan, and Waikiki Sunset building increased by a whopping ~20%. That is a disproportionately larger amount than the overall market increase. Because these units are being bought primarily by investors, the market value is measured by the income generated. Another record year of tourism arrivals combined with record tourism spending could move prices even higher. Keep your winners.

Rumors and Reality:

A) Rumors have been predicting a real estate market collapse in spite of a lack of evidence. One popular pseudo-explanation has been around since the Summer of 2003 when 30-year fixed rates dropped for the first time below 5.5%: “Since interest rates will be moving up, prices will need to come down.” Instead, we have observed that during times when interest rates rise, people tend to select more affordable adjustable-rate mortgages instead of the fixed rate option. In other words, instead of postponing their purchase, buyers simply selected more affordable, riskier adjustable loans with the expectation to refinance when 30-year fixed rates become favorable again.
The following two graphs show data from 1987 through 2017: a) average US 30-year fixed mortgage rates, and b) the median sales price for Oahu homes and condos.

30-year Fixed Rate 1987 – 2017

Oahu Median Sales Price 1987 – 2017

There appears to be no correlation between 30-year fixed rate mortgage rate gyrations and Oahu’s median sales price. Notable times of steep interest rate increases have been:

• Between 3/27/1987 and 10/16/1987, from 9.03% to 11.58%.
• Between 10/22/1993 and 11/25/1994, from 6.74% to 9.25%.
• Between 2/16/1996 and 7/12/1996, from 6.94% to 8.42%.
• Between 10/9/1998 and 5/19/2000, from 6.49% to 8.64%.
• Between 6/20/2003 and 7/20/2006, from 5.21% to 6.80%.
• Between 11/21/2012 and 8/22/2013, from 3.31% to 4.58%.
• Between 7/7/2016 and 12/29/2016, from 3.41% to 4.32%.

Take a close look at the graph above and you will not see any downturn in the median sales price during these periods of interest rate increases.

B) Another recent rumor predicts: “The US housing market could collapse 10% because of the new Tax Cuts and Jobs Act 2018.” The new tax law caps the mortgage interest deduction on loan amounts at $750K instead of $1Mill. The aggregate amount of deducting state, local, and property tax are now capped at $10K per year. In exchange, all tax brackets have been lowered across the board. – Raise your hand if you believe this will cause widespread suffering in the housing market to the extent of a 10% price drop. We shall see in the fullness of time and compare notes. The last time the Oahu median sales price dropped 10% was because of the 2009 financial crisis, nothing compared to today’s broad-based stimulating US tax cuts. Filter the noise and calmly analyze the probability of rumored doomsday scenarios.

C) A recent forecast by CoreLogic predicts that by November 2018 US property values could increase ~ 4.6% nominal (2.6% after inflation), and 30-year mortgage rates could increase 85 basis points compared with November 2017. Real disposable income is expected to increase ~4%.

At this time we see a strengthening economy in the US and around the world with minimal inflation risk and no imminent recession threat. These are conditions for Hawaii real estate values to move higher in 2018.

• Back to answering the question: “Should I sell?” My answer is “no.” I believe in the long-term benefits of owning real estate in Hawaii.

To remove emotions and guessing from important selling decisions, I established my personal rule of thumb: I never sell my rentals, unless one of the following three reasons apply:

1) “The property is killing me.” Sometimes you may discover your property is just a ‘bad apple.’ It could be the neighborhood, or the property itself. Perhaps it is impossible to keep good tenants and the property has turned into a perpetual money pit. Evaluate the true reasons why the property isn’t performing well. If it turns out to be an incurable defect, it could be time to cut the rope. Consider a 1031 tax-deferred exchange and move on.

2) “I absolutely need the money.” That could include an incredible new opportunity so fantastic that I would consider selling the existing rental property and rolling the money into this new, more lucrative opportunity. I constantly ask myself: “What else could I do with my time and my money?” Be careful, the grass is not always greener on the other side.

3) “There is a significant shift in the marketplace.” For example, I have rentals next to a large military base ensuring strong rental demand. If the base were to close down I would consider liquidating because the closure would greatly diminish future cash flow.

Conclusion:

Determine your real estate needs and check if any of the above three reasons apply to adjust your real estate holdings. Ignore the noise of trying to forecast and time the market. Stay consistent with your long-term objective. May you live well and prosper.

Let us know what you think. We love to hear from you!  Reciprocate Aloha!  Like, Share and Comment below.  ~ Mahalo & Aloha

The post The Market Is Up! Should I sell My Hawaii Investment Property? appeared first on Hawaii Living Blog.

The beach is beckoning. The pool is inviting. Leave everything behind and suit up. Of course, the only suit you need when living in Kailua on the windward side of Oahu, is a swimsuit.

Whether you’re an avid kite surfer or just prefer to lounge poolside, there’s no escaping beach attire.  Beachwear often does double duty in Kailua, with residents’ active lifestyles.

So where do you get the look?  There’s no shortage of stores selling beach attire for women, men and kids too.  

Bikinibird

A top go-to for the fashion set is Bikinibird. This one-stop shop for women’s beach wear is the vision of Tiana Becker Gamble, a North Shore gal who is swimming with the Kailua set now. Gamble’s got style. She definitely knows how to make you look great in her high-end, on-trend designer swimwear. Most of the top-designers featured at Bikinibird have local connections including Mikoh (Kalani and Oleema Miller are part-time Hawaii residents); Tori Praver’s from Maui; Acacia (designed by Kauai-based Lyndie Irons and Maui-born Naomi Newirth); and Issa de’ Mar (from Oahu’s North Shore designers Marissa Eveland and Melisa Jasniy). You can also find Island-inspired exclusive designs from Bikinibird, Aila Blue, Indah, and Bec & Bridge at this Hekili Street shop.

To buck the traditions of brick and mortar leading the way, Bikinibird started online – not as a shop — but as a lifestyle blog. The blog and Gamble’s keen vision were so successful that the online store was launched. Now, of course, Kailua residents are benefiting from the style-savvy Gamble who launched her Bikinibird’s flagship store in January 2017. The finds are a bit pricier than your average suit – but these aren’t average suits! Cover-ups, an in-house line of graphic tees, hats, bags, sunglasses, jewelry, and even towels are at your fingertips to complete the look and make a splash at any poolside party.

Bikinibird is located on Hekili Street.  bikinibird.com

Twin Islands

Just down the street from Bikinibird, also on Hekili Street, is Twin Islands, aptly named after the Mokulua Islands. The twin islands, just off the coast of Lanikai, are Kailua’s defining landmark in Kailua Bay. Not coincidentally, the owner of Twin Islands, Mike Miller, is also a twin. He spent much of his time growing up in Kailua, hanging out and surfing at the Mokulua Islands with his twin brother, Peter. The brothers competed in surfing competitions all over the world. Surfing and then becoming airline pilots were their life passions. Unfortunately, Pete died in a tragic airplane crash in 2006. In honor of Pete, Mike created the Twin Islands logo that adorns the shop and its apparel. The Twin Islands logo has become symbolic of Kailua and is one of Kailua’s most famous logos. Owning a Twin Island logo piece is a must for Kailua residents. If you’re new to Kailua, come on in and be part of the community. Twin Islands sells more than just the logo Ts –choose from men’s, women’s and kids T-shirts plus board shorts, rash guards, hats and accessories. Whatever you select, it will be an original from Twin Islands and will proudly represent where you live.

Twin Islands, Heikili Street.   tisurf.com 

Pakaloha Bikinis

Kailua residents are now able to get a taste of what Maui residents have been buying:  active but sexy styles from Pakaloha bikinis. Kailua gal and surfer, Julie Dahl, was encouraged by her son to create a line of swimwear. As the story goes, he was tired of hearing mom complaining about suits riding up or not staying in place while surfing. And so, Pakaloha was born.

Pakaloha suits hit a balance of cheeky but sporty. The bikinis are sold as separates and range in size from small to extra-large and offer a variety of styles, cuts and coverage. Bottoms range in cuts from suns-out-buns-out to just a bit cheeky and can be mixed or matched with tops which flirt with the sun or are ready to hit the water. One style of top is named after Paige Alms, a top-big-wave surfer, and is designed to stay on whether you’re surfing, swimming or playing. Pakaloha sponsors Paige and big-wave surfing competitions.   

As experts in the field, the staff knows how to help you choose styles that stay put if that’s your goal. In addition to bikinis, you’ll find mono-kinis and other one-piece suits, cover-ups, beach accessories and a beach-inspired line of jewelry from North Shore designer Nikki Parlow.

While you’re in the store, remember to pick up sunscreen that is reef safe. A passion of those of us who live by the ocean is to stop coral bleaching. One step is to use reef safe sunscreen and you can get that right at Pakaloha. Ask for Kuuleana Sun Protection.

Pakaloha is on Kuulei Road.    pakalohamaui.com

San Lorenzo Bikinis

If sizzling in the sun is more your style, check out the suits at San Lorenzo Bikinis. The signature South American style was brought to us from Peru by Lisseth Figueroa. Figuero moved to Hawaii from Lima, Peru, to attend college. She was unable to find suits that featured that now well-known cheeky style. This inspired her to start her own line and business. Since 2002, San Lorenzo swimwear has been the go-to store for sexy, sleek and cheeky styles. Mix-and-match bikinis from extra small to large are all original San Lorenzo designs and fabrics. The quality material of nylon and spandex is silky smooth and all suits are reversible. Besides the bikinis, the to-be-seen set will find retro high-waist bikinis and higher-cut one-piece suits. Alongside the Lorenzo brand, designer brands such as Acacia Swimwear and Frankies Bikinis are in the mix. Cover-ups, rash guards, rompers, sunglasses, and hats round out the choices. San Lorenzo is conveniently located on Kailua Road by the beach park, so if you break a strap – you don’t have far to go!

sanlorenzobikinis.com

Island Snow

Next to San Lorenzo Bikinis is one of the favorite Kailua stops for former U.S. President Barack Obama and his family: Island Snow. Of course, we can all get a great shave ice after a day at the beach, but you can also get Island Snow threads. Guys need to look good at the beach and poolside too and even though there’s a women’s section of suits and clothes at Island Snow, the guys are often seen getting great T-shirts, board shorts, backpacks, and aloha shirts. Surf brands like Quiksilver, Volcom, Billabong, Hurley’s, Vans and Roxy dominate the look. Island Snow in Kailua now also features Patagonia.  There are two Island Snow locations in Kailua – the one by the beach and the one in Kailua Town – both with Kailua Road addresses. The Kailua Town Island Snow also has a Stussy Chapter Store in the loft. It’s definitely worth checking out if wearing surf labels is the vibe you are looking for.  

islandsnow.com

Brazilian Showroom

Across the street from the Kailua Town Island Snow is the Brazilian Showroom, owned by Nadia Ribeiro who came up with a plan to provide local residents with a taste of Brazil. Originally, Kailua residents had to drive to the North Shore to wear the Brazilian look. No more! Now that Ribeiro brought her storefront to Kailua, it’s easy for Kailuans and visitors alike to scoop up the Brazilian bikini look. Crafted by top Brazilian designers such as Enseada da Praia, Cila, Sauipe, Banco de Areia, Ki-Korpo and Jangada with the biggest selection from BSR, the Showroom features a wide range of sizes from extra-small to extra-large. Mix-and-match bikinis line the shop in a large variety of styles and colors.  You can find anything from thongs to more traditional American cuts, even a great number of kids’ suits – some boys, but mainly cute bikinis for girls in sizes 1- 16. Brazilian Showroom even features a line of Brazilian-cut men’s trunks. Brazilian Showroom is located on Kailua Road.

brazilianshowroomhawaii.com

Hawaiian Island Creations

If Brazilian trunks are too daring, try opting for the look of amphibian board shorts that easily go from beach to bar or anything in between. The look is easy to get at Hawaiian Island Creations on Hahani Street. Hawaiian Island Creations, established in 1971, has been the go-to for Hawaii’s surf and skate set. Board shorts, rash guards, T-shirts, sweatshirts, slippers and sandals in all the popular surf and skate brands including Hawaiian Island’s Creations (HIC) own brand are in one convenient place for all sizes and ages. In addition to HIC’s boys’ and girls’ sections, girls can also cruise through the Roxy store within-a-store to mix and match with other surf brands for suits, cover-ups, sundresses, tops and pants. Be in the know and watch for their tent and sidewalk sales on holiday weekends!

hicsurf.com/stores/hic-kailua

Courtesy – Adam Jung Photography

Still haven’t found the perfect swim gear or board shorts? Take a peek in any of the boutiques or big name stores in Kailua, many of which feature beach attire in addition to their other fashion-forward designs. Consider popping into the surf or skate stores like Kailua Sailboards and Kayaks, 808Skate and Naish Hawaii, that often have the best suits for SUP, surfing, kitesurfing and the like.

It’s also an easy short drive to Windward and Ala Moana malls for a wider selection of looks — there’s no need to wait to make a splash and look the part. Make Kailua part of your lifestyle. Grab that dream property and suit up!

The post Bikinis to Board Shorts – Kailua is Suiting Up! appeared first on Hawaii Living Blog.

Comparing Central and West Oahu is a big job. Those 2 areas take in a lot, especially Central Oahu, which claims everything from the teeming activity of Pearl City and Waipahu, all the way up to the wide open, planned communities of Waikele and Mililani.

Despite that, choosing between them is a common process for many homebuyers in Hawaii. There’s many factors they weigh between the two. including commute time, an ever-present issue for almost everyone on this Island.

Our job here is to underline where they diverge in important ways that will affect not just your general lifestyle, but your daily life – the kind of things that can bend a homeowner’s memory of that purchase toward Delight or Dejection. That’s the kind of real estate background it’s critical to know. So why wait any longer? Let’s get started.

As we all know, life in Hawaii has its own style and rhythm. That must be accounted for in your home choice. One way that plays out is the accessibility of the water lifestyle that drives so many locals. For some, getting into the ocean regularly, whether for swimming, surfing, paddling or just to recharge a soul depleted by the daily grind, is vitally important, even required. That significance can certainly drive a real estate decision.

No one would suggest that you can’t do it from a home in Central Oahu. It’s no secret that many do. The issue is that it does take more time and effort than if they were based in West Oahu. In plain terms, there are no beaches, even in the coastline areas of Aiea and Pearl City. So a drive on the highway is required, because your nearest sands are in Ewa Beach.

There the coast is almost one long stretch of soft oceanside playground, from Iroquois Point on the east end all the way to Ko Olina on the west. Puuloa Beach Park, White Plains Beach, Barbers Point Beach Park, the Ko Olina Marinas – just some of the places here that you can listen to the waves or wade in to greet them.

White Plains Beach

Not everyone on the Ewa Plain can walk to these recreational spots, of course, but the trip is a shorter and more convenient one than the trek your neighbors must take from the areas immediately east. While this would be a major point for residences almost anywhere, it is elevated to another level entirely when it comes to Hawaii and the profound connection locals feel with the ocean.

We should point out that the also enticing prospect of an ocean view can be a part of your life in both areas, however. The sloping terrain of Aiea and Pearl City and the entire Central geography affords many a lookout over the Pacific, including historic Pearl Harbor. In fact, you may have a better chance at, and a more affordable entry to, an ocean view than on the flatter lands of the Ewa Plain, where the sight lines are more restricted and therefore harder to get, outside of Makakilo.

THE DIFFERENT OPTIONS YOU GET IN REAL ESTATE
One other area Central Oahu does come out ahead is an additional option in housing. While West Oahu also has single family homes and townhomes, it lacks high-rise condominiums, the most common residence on the Island. For some that is a selling point, but others like the elevated outlooks and usually more affordable price points.

Ko Olina Lagoon and Beach Villas

While it is true that the 2nd City can claim the Ko Olina Beach Villas, it is the exception that proves the rule. Not only for being the only condo tower in that entire region, but also for its luxury status and broad use as vacation rentals, rather than year-round residences.

Aiea, Pearl City and Waipahu all have multi-story condominiums within them, the landscape returning to heights under 4 stories in Waipio, Waikele and Mililani. If having that option on the table is important, Central Oahu is where you will find it.

Pulewa at Mehana, Kapolei

Kapolei and Ewa Beach have some options of their own to offer, too. One is the obvious fact that the newest homes have been, and will be, built here. New projects like the in-progress Hoopili and Pohakala at Mehana are just two of the most recent. If you’re shopping for a late model or even a still-to-be-built residence, the Ewa Plain is your destination.

Another feature West Oahu has over its eastern neighbor is fulfilling the dream of a home with a yard. There are certainly houses and even townhome condos to be found in Central Oahu that can satisfy that yearning, but there’s no real comparison. You can see street after street of lots with lawns and yards in the 2nd City, a selling point for so many who thought having that was not possible in today’s Hawaii. That assumption is gone forever now with the rise of this region.

CENTRAL & WEST OAHU – BOTH MARKET ENDS COVERED BETWEEN THEM
Across both Central & West Oahu you can find generally comparable homes and communities within the mid to higher-mid range market. The extremes, though, are each better covered in one than the other.

Ewa Beach and Kapolei are always cited as where affordable homes are to be found. That is undeniably true, but a greater source of lower-priced Oahu real estate are listings in the Waipahu-Pearl City section. The median price, using recent figures, in those towns is $50K or more below the median of the Ewa area.

Lei Pauku in Hoakalei

At the other extreme, luxury properties are almost exclusively the domain of West Oahu. This is best typified by the resort-living experience that can be purchased in the homes of Ko Olina, and now Hoakalei, too. Days surrounded by leisure, with hotel/resort amenities available for you to enjoy and an manicured environment that soothes like a warm embrace. There’s just nothing like it, not just in West Oahu, but anywhere else in Hawaii.

CENTRAL OAHU – URBAN ENVIRONMENTS & BUSY HIGHWAYS
While Waikele, Mililani and Mililani Mauka share the same open, planned layout of the 2nd City, Central Oahu also has the longstanding towns of Pearl City and Waipahu, places that have existed for some time and filled in more organically to satisfy surging demand from the mid-20th Century on.

Waikele Townhomes

Little was planned and the lots were often smaller sized in general, leading to neighborhoods where homes sit very close together today. The original Ewa Beach town is like that, and for similar reasons, but the size and scope of it is not on the same scale. In comparison, that part of the Ewa Plain is almost a bedroom community.

Major highways – Kamehameha and Farrington – travel right through Pearl City & Waipahu, with large strip malls on either side of those arteries, adding a traffic element that also separates them from anything else in Ewa. It’s an unmistakably urban environment, something West Oahu does not possess, and it even stands out from the rest of Central Oahu as well.

Those highways are important and they are present throughout all of this section of the Island. Almost every community has a main route running right beside it or even cutting through the middle of it. Mililani Town has Route 99/Kamehameha Hwy bisecting it and H2 makes up the border between there and Mililani Mauka. A little further south, Waipio sits sandwiched between those two roadways.

Pearl City & Waipahu, along with the Farrington & Kamehameha Hwy’s mentioned before, also have H1 lining much of their mauka sections.

The 2nd City is both blessed and cursed with having only H1 to access anywhere east of them. While this makes for an obviously longer commute time to Honolulu than Central Oahu residents, there’s also nothing like the congestion you can get into driving through Pearl City or Waipahu’s central districts. A mixed blessing, as they say.

If weather is a concern of yours, then there’s a clear winner to be declared. The Ewa Plain has always had higher temperatures, so it’s an accepted part of your day in Ewa Beach and Kapolei.

Waipahu and Pearl City, especially of the Central Oahu areas, have similar patterns of raised temperature compared to most of the Island. The change comes with a drive upward into the heart of the Island where you’ll feel a distinct difference.

Both Mililani Town and Mililani Mauka, up on the plateau made up of the two mountain ranges meeting, dwell in an atmosphere that ranges from 52 degrees at its low and 88 as its high, with averages that top out in August at 76 degrees. It’s a very nice, and distinct, selling point for many when you compare it to the, on average, 4 to 5 degrees higher those in Kapolei and Ewa Beach experience.

Mililani Mauka Homes

The heights of Makakilo do give some protection against that, but it’s unevenly given. Think of it this way. Makakilo is a hillside community, so there’s a certain height to be reached before you the difference begins to be felt. So, Makakilo residences that are lower down don’t get the same advantages as those higher up. Every home in Mililani Town & Mililani Mauka, however, is up on the mid-Island plateau, so everyone there enjoys the advantages of the higher elevation’s climate. It comes with the property.

Makakilo Homes

WHAT YOU SHOULD TAKE AWAY
Ultimately, the wonderful aspect of life on Oahu, and all of Hawaii, is that the individual neighborhoods and communities each have something distinctively theirs. Still, understanding where these 2 regions stand out and apart is important to focusing on where your Oahu real estate needs will be best met. The answer won’t be the same to everyone. It’s just important what yours is.   

The post Central vs West Oahu Living – The Differences in Lifestyle appeared first on Hawaii Living Blog.

An appraiser from Honolulu’s Real Property Assessment Division will determine the assessed value of a property on October 1st of any given year. The appraiser will look at 5 comparable sales (ideally comparable sales in the same building, but could also be comparable sales in other buildings), which have sold prior to June 30th and then also take in to account any possible market movements July through September to determine the assessed value on October 1st. The October 1st assessed value is used to determine property taxes due the following fiscal year.
Example: October 1, 2017 assessed value is used to determine property taxes due fiscal 2018, which runs from July 1, 2018 through June 30, 2019.

For new condo projects – to be completed – the appraiser does not know the sales price agreed between the developer and Buyer, since there is no transfer of ownership / no recorded sale yet. So how does the  appraiser at the Real Property Assessment Division determine an assessed value for a unit in a to be completed condo where there are no recorded sales?

The appraiser will put a lot of weight on building costs – typically substantially lower than the actual market value – and that means the October 1st assessed value is likely to be low compared to the actual market value.
Example: Waiea (a new condo in Honolulu) was completed November 2016 (first group of buyers took ownership November 2016) and October 1, 2016 assessed value for those units appeared to be a fraction of the expected market value. The appraisers have likely put substantial weight on the cost of building Waiea, in determining the assessed value for those units, which makes sense, since Waiea was not completed by October 1, 2016.

Recently, I looked at some Anaha (a new condo in Honolulu) October 1, 2017 assessed values and to my surprise the assessed values appeared – for several units – close to the actual market value. If Anaha wasn’t completed by October 1, 2017 (no units recorded / sold by this date) and the cost of building Anaha surely isn’t close to the market value, then what is the reason for such high assessed values?

I called the Real Property Assessment Division and spoke with an appraiser who had appraised a unit in Anaha and asked her on this matter. She – the appraiser – told me Anaha was pretty much completed by October 1, 2017 and she therefore used 5 comparable sales in nearby and similar buildings (sold prior to June 30, 2017) to determine the assessed value. I asked her what are the determining factors to be considered pretty much completed and to my surprise there were no clear guidelines – subjectively determined by the appraiser. I was told if a project is about 95% complete then they would likely look at comparable sales, but if project is only 75% complete then they would probably focus more on cost of building the project in determining the assessed value.

Conclusion
If you purchase a new condo completed shortly after October 1st, don’t count on the October 1st assessed value, in that same year, to be artificially low – it may be, it may not be. It seems reasonably fair, although a bit disappointing the Real Property Assessment Division does not have more clear guidelines on this matter.

The post How Is Assessed Value Determined for New Condo Developments in Honolulu? appeared first on Hawaii Living Blog.

Divorcing Your Home
Whether your divorce is friendly and just the best thing to do for both of you – or it is a contentious situation and neither of you can talk without your attorneys present – or you are somewhere in between, if there’s a house involved, your situation just got a little, and sometimes, a lot more complicated. That’s why we put together this ‘Divorcing Your Home’ Guide. It is a simple guide to give you the most important facts on what you need to know when there is a house involved in the divorce.

Part I. Options to consider in a divorce when the home is owned by both parties together.

Sell the house and split the profit.
A. Selling the house before the divorce is final.
1. Takes one of the major causes of stress out of the divorce process.
2. Permits both parties to buy replacement residences before the courts interfere.
3. Splitting the proceeds.
a) It is a simple division of the proceeds, 50 – 50, unless the couple is separated and a relative or one partner has been making the mortgage payments. (See 5c)
b) Before the sales proceeds can be divided, the mortgage and any second mortgage or HELOC (Home Equity Line of Credit) will have to be paid. This will make final divorce court proceedings simpler. Real estate broker’s fees will also have to be paid.
c) Capital gains taxes might apply and would have to be paid. (See #6 Disadvantages.) However, if the couple remains married while selling, there might be as much as $500,000 capital-gains exclusion, depending on the tax laws at the time of sale.
4. What is the best procedure to follow?
a) Choose a Realtor who both parties are comfortable with.
b) It is advisable not to use a Realtor who is a friend or relative of either party.
c) Turn the decision as to the asking price over to the Realtor to prevent more conflict.
d) Prepare the house for sale by making minor repairs, freshen up paint and have the house cleaned. Remove clutter. If necessary, put things in storage to speed the process up.
e) If neither party is still living in the house, use a professional stager. Some Realtors are trained in this area.
f) If one spouse is still living in the house, he/she should be compensated for taking care of the preparation to sell. Both parties involved in the divorce should make this decision before going any further with sale of the real estate.
g) Accepting the buyer. It is possible that there will be more than one offer. The decision as to which buyer to choose must be made jointly. If it is a sticking point, ask for professional advice.
5. Who divides the money?
a) The money from the sale will be in escrow. The escrow company will pay off the mortgage and any second mortgages or liens.
b) Other joint marital debts (credit cards, loans, etc.) can also be paid off by the escrow company at the request of the parties involved.
c) If there has been a separation of spouses, and one spouse has been making mortgage payments on the house in question, it is possible that by reducing the principal owed, the equity in the house has risen. In that case, the spouse who had been making payments should get an adjustment to his/her distribution total, making the payout not completely equal. Example: Using
round figures, one spouse has been making payments of $4500 a month on the mortgage, with $1,000 going toward the principal and $3500 toward the interest for the past year. That reduced the principal by $12,000 increasing the joint equity in the house. The spouse who has been making the payments could fairly ask for his/her share of the payout to be $12,000 more than that of the other spouse.
d) Once the amounts for all of the above are subtracted from the proceeds of the sale, the balance will be divided 50-50. The escrow company will make the two payments. The sale will be final. The profits shared. And the house will not be part of any divorce proceedings, making the divorce a much simpler process.
6. Disadvantages
a) If one or both spouses have lived in the house for a number of years, improvements most probably have been made. Therefore, when sold, the house usually gains in value from when it was purchased. According to the tax laws at the time, it is likely that capital-gains tax will be owed on any increase in value.
b) The value of the property will in all probability increase. Waiting to sell the house after the divorce is final adds time for the value to increase.
c) Fact: Divorce is stressful. Adding the high-pressure factor of selling a house just increases the stress factor.
d) Both parties involved in the divorce will have to find places to live as soon as the house sells; possibly much sooner than is preferable.
e) The couple’s mortgage could be under water. This means that the mortgage is higher than the value of the house. Selling at this time will mean that neither party will get any proceeds from the sale of the house. In fact, it will cost them.

Part II. Options to keeping the house in a divorce when the home is owned by both parties together.

A. Keeping the House
A. Both parties stay in the house.
1. Both parties would have to maintain separate lives while living under one roof.
2. This is especially helpful if the mortgage is upside down or there are financial problems. It gives the couple time to repair their finances and and/or bring down the principal on the mortgage before selling.
3. Disadvantage
a) Staying in the house together can put either or both parties in an uncomfortable position – conflict is almost inevitable.
B. Only one of the parties stays in the house.
1. This will only work if both parties can agree as to who will pay utilities; who is responsible for maintenance and the other party has a place to stay.
2. Use this alternative if you have yet to set a final date to put your house on the market.
3. This is another alternative that can add some stability for children who are caught in the middle of a traumatic divorce.
4. Once the children are grown, the couple can sell the home and split the profits.
5. It is wise to make sure that separation or divorce agreements include plans to sell the house at a later date.
6. Disadvantage
The spouse staying in the house may be neglectful in maintaining it which could lower the selling value of the home.
C. Buying the house from your spouse.
1. One of the parties becomes the sole owner by buying the other spouse’s share. The mortgage can be refinanced or the buyer spouse can get a new mortgage. Another method is to work out a payment plan. Legal help is definitely advised.
2. If you have emotional ties to the house or you have young children who need a stable environment, this could be your best option.
3. Once you buy-out your spouse, you will then be solely responsible for the mortgage, the maintenance and taxes.
4. Both parties should hire an appraiser to get a professional opinion as to the value of the property. Real estate professionals can also help in giving you a current assessment of market value. (Online estimates are not necessarily accurate.)
5. Disadvantages
a) If you have been dependent on your spouse’s paycheck to pay for these operational expenses, and you cannot afford to pay them on your own, this option is not the right one for you.
b) The buying spouse will have to qualify for the new or re-financed mortgage. Showing enough income can be difficult since only one income will be considered. Of course, if you have enough cash in hand this could be a moot point.
c) The selling spouse will still have the mortgage debt on his/her credit record which could make it more difficult to buy another property (until the mortgage is paid off in full).
D. Renting the home in question to a third party.
1. Another answer as to what to do about the house is to rent it to a third party.
2. This option lets you continue to increase the equity in your house (very helpful in an upside-down mortgage) while living in a new residence.
3. Since the house generally can be rented for more than the monthly mortgage payment and cover utilities and maintenance, there might be some excess dollars.
4. It would be wise to have a property management firm handle the rental. This will give you peace of mind. A good property manager will assure that tenants are approved, repairs are made and potential damages are repaired and paid for so as not to lower your property value.
5. Disadvantages
a) Rental leases and who is going to pay for utilities and maintenance, etc. have to be put in writing and both spouses must agree and sign the legal papers.
b) The mortgage debt will still be listed on both parties’ credit records.
E. One spouse at a time
1. This is a unique alternative to selling a home in a divorce, although not unheard of and applies only if there are children involved.
2. The house remains as the children’s residence while the parents each retain other places of residence.
3. The parents alternate living with the children (weekly/monthly basis), returning to their own new residence when their turn is up. It’s the reverse of children being shuttled to different parents each week in a divorce and is a better solution for children instead of shuffling them off to a different house every week.
4. Both parties split the expenses and appropriate tax deductions for the mortgage, maintenance, utilities, etc.
5. Disadvantages
a) The high cost for each spouse to pay 50% of the marital home plus 100% of an individual new residence puts this arrangement more out of reach financially than any of the other alternatives.
b) Each parent is under a great deal of stress as they alternate living quarters on a regular basis. However, this disadvantage is outweighed by there being much less stress for the children.

Part III. Options when considering a divorce and the marital home is owned by one spouse.

When the house is in only one name.
A. Sell the house before you are legally separated or file for divorce.
1. Once you are legally separated or file for divorce, all property owned separately by you or your spouse, along with all property owned by you and your spouse together becomes part of the divorce proceedings. Selling the house before these legal procedures are in effect, removes the house from the divorce proceedings.
2. If you and your spouse are on friendly terms, determine whether you are going to keep your home, or if one of you is going to buy the other out, or if you are going to sell the home. If one of you is going to buy the other out, put all the numbers on paper to make sure the refinancing of the mortgage is affordable. Check with a mortgage broker, a Realtor, your CPA/accountant, and a tax attorney too.
3. This will also prevent the most emotional, complicated part of any divorce proceedings – the selling of a house you have lived in together.
4. Consult with a divorce attorney. Once you file for divorce, the laws are very strict as to what you can keep and what belongs to your spouse, what you can sell, and how property is divided. A divorce attorney can help you understand your legal rights and protect you from doing something unwise.
5. You have already started divorce proceedings.
a) The court will issue a temporary order preventing you and/or your spouse from transferring ownership of property and all other assets to another party.
b) Your home, that you both lived in together, is still part of the divorce whether or not your spouse’s name is on the title or deed or ownership papers.
6. Definition of separate property.
a) What constitutes separate property: Property that you bring with you when you entered into the marriage and you keep in your name.
b) Separate property also includes gifts and inheritances.
c) In some states, divorce proceedings allow for the division of separate and marital property; with the origin of the property taken into consideration.
7. Definition of marital property.
a) The state you live in determines what is marital or community property.
b) Generally, marital or community property is that which is acquired during the marriage including work income, pensions, real estate, furniture, and personal property.
c) Marital or community property does not include individual gifts and inheritances.
d) It does, however, include your house.
8. Community property state or equitable distribution state.
a) In a community property state, the marital property is divided equally. Each party gets 50% of the property or its value.
b) The opposite of a community property state is called an equitable distribution state. In this situation, the divorce court divides the property as it determines to be valid, fair and equitable.

Above all else, whether you own your home together, or only one of you is on the title/mortgage, make divorce and the decisions about your home by using your head, not your heart. Treat the sale of your house as a business decision.

The post WHEN YOUR HOME IS INVOLVED IN A DIVORCE appeared first on Hawaii Living Blog.

The Central Ala Moana is a planned new condo project in Honolulu. Sales expected to begin late 2018. This post will be updated as we learn more about the project.

What We Know So Far
Location: 1391 Kapiolani Blvd – ocean side of Kapiolani Blvd
512 units, 43 stories, 400ft tall
60% affordable housing and 40% market rate units
Developer: SamKoo – same developer of Kapiolani Residence
Sales expected to commence late 2018 and break ground early 2019
Many units above 10th floor expected to boast incredible ocean views, looking over Ala Moana Shopping Center and Park Lane
Expected to be fairly similar to Kapiolani Residence, although slight higher ceiling, likely somewhat improved / upgraded (e.g. keyless entry system for units, internet based fridge touchscreen panel etc) and certainly more units will have spectacular ocean views.
General Contract: Hawaiian Dredging Construction
Designer: Design Partners.

The post The Central Ala Moana appeared first on Hawaii Living Blog.

It is becoming increasingly difficult to purchase a high-end condo in Honolulu under $1,000,000 – depending on how one defines high-end, obviously!

We decided to take a closer look at 5 popular condo neighborhoods – Kakaako, Waikiki, Diamond Head’s Gold Coast, Hawaii Kai and Downtown – and select the best condo from each of these neighborhood where you sometimes – or often, in some cases – can purchase a great condo under $1,000,000 (as of writing).

Koolani (Kakaako)

The area of Kakaako is rapidly becoming the most places to live in Honolulu. Conveniently located within walking distance to shopping, parks, restaurants, bars and movie theater, many residents of Kakaako rarely need to drive a car to get where they want to go. Just minutes from the coast, Kakaako is bordered on the south by Ala Moana Beach Park, right next to Magic Island. Inland, the Ala Moana Shopping Center has all your shopping needs covered. Hip, vibrant, and family-friendly with some of Honolulu’s top schools in close proximity, Kakaako is up-and-coming and first part of Ward Village in Kakaako is already nicely taking shape.

About 20 new condos are planned in the Kakaako neighborhood over the next decade or longer. At the moment, however, Koolani offers the best deal around the $1M price point. Located a stone-throw away from the beach, most of Koolani’s 2BR units offer spectacular ocean views. Two proposed project by Howard Hughes between Waiea and Hokua could change that, however, the development is not set to be completed for many years to come.

Most of the 2BR units are about 1,150sf and the layout of all 2BR units are very similar, except the 08 stack which boasts more than 1,400sf. Koolani features one of the most comprehensive gyms of any condo in Honolulu, arguably the best, with a steam room, yoga classes & more. Koolani is also located right by a popular park where many families with kids gather daily.

Allure Waikiki (Waikiki)

Waikiki is what most people imagine when they think of Hawaii: sandy boardwalks packed with visitors and locals soaking up the sun and the breeze. A whopping 72,000 tourists visit Waikiki each day and is the single neighborhood with most hotels and condos on Oahu.

Popular for those who love a vibrant neighborhood close to unlimited shopping and restaurant options while being exposed to a large tourist scene.
There is more than 100 condos in Waikiki, however, Allure offers one of the best deals in the $1M range. Most 2BR units – in the 1,000 to 1,200sf range – are sold under $1,000,000 and some 3BR around 1,400sf are also closed to the $1,000,000 mark. Ocean views are non-existing or average for most of the units around or under $1,000,000.

Allure Waikiki has one of the most spectacular resort like swimming pools in Honolulu and the BBQ area is also very inviting and resort like. Popular for its location with even distance to central Waikiki (where all action takes place) and Ala Moana Shopping Center.

Tropic Seas (Diamond’s Head Gold Coast)

Set at the foot of majestic Diamond Head, the Gold Coast is where the elite of Oahu have flocked for decades. Because of setback requirements instituted since the heyday of condo development in the 1950s and 60s, the Gold Coast condos are one-of-a-kind and can never be replicated. Sitting right on the ocean’s edge, each development boasts the best ocean views you will, arguably, find anywhere in Honolulu. At the beginning of the Gold Coast (near Waikiki) you will find Kaimana Beach, one of the most amazing beaches in Honolulu – popular among swimmers, paddle surfers, surfers and canoers.

Of the 16 condos on the Gold Coast, Tropic Seas offers one of the best deals for a $1,000,000 budget. For less than this price point you can purchase a beautiful removed 1BR unit with picture perfect ocean views. 2BR units with stunning ocean views, tend to go for substantially more than $1,000,000.
The building is simple, like all Gold Coast condos. You pay for the ocean views, location and not for a modern building with fancy amenities.

Peninsula at Hawaii Kai (Hawaii Kai)

For those who love life on the water, there’s no place like Hawaii Kai, a planned development that almost feels like a tropical Venice. Located on the east side of Maunalua Bay, Hawaii Kai is about a 25 min drive to Waikiki (off peak hours), but it feels like a world away.
Several condos and townhomes are built on man-made marinas, waterfront, which is a unique appeal of Hawaii Kai. Some owners, who have a boat on the marina, even use their boat as a means to go shopping from time to time.

There are a few excellent condos in Hawaii Kai to choose from, but Peninsula at Hawaii Kai offers the overall best value in the $1,000,000 price range. This project is gated and there are a mix of condos, townhomes and single-family residences. A number of 3BR units with about 1,450sf interior in a townhouse setting sell for around $1,000,000.

The Pinnacle Honolulu (Downtown)
Located in Downtown Honolulu, The Pinnacle offers luxury living in a central setting with stunning views (from higher floors) and easy accessibility to government and business offices, restaurants and bars, and just a short walk to Chinatown. This 37-story building offers access via elevators that open directly into your private foyer. Each floor has a maximum of two units, increasing space, privacy and guaranteeing you a panoramic view from your lanai.
The Pinnacle’s west side faces Honolulu Harbor and the Keehi Lagoon. To the south, from higher floors, you’ll get views Kakaako, Diamond Head & more. The downside of living here is that your views include nearby buildings and the area in general lacks energy and excitement of a place like Waikiki.
Most of the Pinnacle’s units are about 1,400sf in size and go for around $1M, although a few of the floors have been combined into 4BR units that sell for a much higher price point.

Closing Remarks
When purchasing, consider the neighborhood carefully too, not just the building. You may get space in Hawaii Kai, but will be quite a distance from the busy part of Honolulu (Waikiki & Ala Moana). On the Gold Coast you get views and spectacular surroundings, but buildings are old. In Waikiki you have access to most of what you may need, but it is fast paced, busy and noisy. In Kakaako you will be part of a modern community, but may be exposed to ongoing noise from new construction.

The post Great Honolulu Condos Under $1,000,000 appeared first on Hawaii Living Blog.

Hawaii Real Estate – The Sellers’ Obligation To Disclose
– Sellers of Hawaii real estate are obligated to disclose any “fact, condition or defect, past or present, that could measurably affect the value of the property for sale to a reasonable person.” Realtors representing sellers require their clients to complete the Seller’s Real Property Disclosure Statement. See a blank copy of the form here.

Sometimes sellers take ‘facts, conditions or defects’ for granted, taking their disclosure obligation lightly. Sellers may have gotten used to certain facts, conditions or defects and consider them less relevant. Perhaps the seller’s basement only floods during occasional torrential rains, about once every few years or so. The seller might argue: “It is not really an issue because it only happened a couple of times a long time ago.” — What? Think again!

If you are selling your home, try to imagine yourself as the buyer. Wouldn’t you want to know about the occasional flooding before buying? Of course, you would. Just because you, the seller, have become numb to the issue does not mean it is irrelevant to the buyer.

Here are two recent real-life examples where sellers almost forgot to disclose:

1) Condotel Dedication For Residential Use

Last year, the city adopted Ordinance 17-013 which allows owners to dedicate their condotel for ‘residential use.’ Owners that apply for the dedication are able to lower their property tax rate from 1.29% of assessed value (hotel/resort rate) to 0.35% of assessed value (residential rate for use as a principal residence). The lower tax rate takes effect the next fiscal year starting July 1st in the year after the September 1st filing deadline. Depending on when the owner files the application in relation to the annual Sept 1st filing deadline, the date the dedication takes effect could be 10 to 22 months after filing!

The issue is that the seller’s application to ‘dedicate the property for residential use’ restricts the owner’s rental options to rental terms of 180 days minimum per tenant. A condotel ‘dedicated for residential use’ can no longer be rented as a short-term vacation rental. Some sellers forget to disclose that they filed for the dedication months earlier. Unless the seller discloses the dedication for residential use, the buyer might not realize this until after closing.

If the new owner violates the use restriction, the dedication is canceled retroactive including the full tax year prior to the violation. The buyer will be charged back taxes including the full fiscal year prior to the violation, equal to the difference in the tax rate, plus a 10% penalty.

Example: You bought a $1Mill condotel with a 5-year residential dedication. On January 1st, 2018 you start short term vacation renting of the unit. The ‘cost’ in back taxes and penalty could be: $10,340 for full fiscal 2016 ($12,900 – $3,500 = $9,400 + 10% = $10,340), plus $4,620 for half of fiscal 2017 (12,900 – $4,500 = 8,400 : 2 = $4,200 + 10% = $4,620). The total ‘cost’ for 12 + 6 months back taxes plus penalty could be $14,960! Oops, surprise.

2) Potential For Future Development

The Ilikai is one of my favorite Waikiki condotels. We explained what makes the Ilikai special and its investment potential in previous articles. On 11/21/2017, the Ilikai AOAO mailed a letter to all Ilikai owners notifying them that the state of Hawaii has announced their intention to ‘redevelop’ a vacant parking lot on the ocean side of the Ilikai. Click here to read what is known so far today.

Ilikai boat harbor

Recently an Ilikai seller was rather casual by not disclosing the notification letter to the buyer. The seller argued that the state’s intention to develop has been “public knowledge for years already and no specific plans have been approved. Therefore the issue wasn’t relevant!” — What? Think again!

Remember, the seller is required to disclose any “fact, condition or defect, past or present, that could measurably affect the value of the property for sale to a reasonable person.” The seller has the obligation to disclose the receipt of the AOAO letter to the buyer. Neither the issue being public knowledge nor the lack of specifics exempts the seller from this obligation. Regardless of what the seller might think, the potential impact of redevelopment on future Ilikai values is crucial for the buyer to assess before finalizing their purchase.

Conclusion

The examples above seem rather obvious and should be common sense to anybody. Nevertheless, some sellers’ casual attitude towards detailed and accurate disclosure is real and therefore needs to be addressed. When in doubt, sellers should err to over-disclose.

‘Facts, conditions or defects’ are in the eye of the beholder. Sellers of Hawaii properties need to disclose what is prudent for the buyer to know. Sellers who do not responsibly disclose are exposing themselves to potential litigation. It’s not worth the risk. Buyers pay big bucks for Hawaii properties and would not want to be stuck with surprise discoveries that the seller had known but failed to disclose.

Let us know what you think. We love to hear from you! Reciprocate Aloha! Like, Share and Comment below. ~ Mahalo & Aloha

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The overriding question is: “What else could I do with my time and my money?” The answer to this question depends on the current state of your financial affairs. Financial health requires a balance of: a) growth above the rate of inflation, and b) prudent risk management. You need both, but depending on where you are in life, your focus might be slanted toward either growth mode or preservation mode.

Growth mode means you are accumulating income-producing assets or otherwise increasing your income stream. Ideally, you want to reach the point where your financial assets generate enough passive cash flow to pay all your living expenses for the rest of your life. I call this financial orbit. To get to financial orbit you will need a sufficient escape velocity. You will need to grow your net cash flow faster than the rate of inflation. How soon you reach financial orbit depends on: a) how much of your assets you consistently dedicate toward investing, and b) the ‘real growth rate’ of your investments after inflation. Here are Seven real estate investment strategies that might help you get to financial orbit.

Preservation mode means you are more concerned about managing risk, mitigating loss, and simplifying life. You minimize risk by sheltering your assets, diversifying, eliminating debt, adding insurance and utilizing other hedging strategies.

If your disposition is towards financial growth, ask yourself the following two questions:
1. Are you able to get more financing for additional properties?
2. Are you comfortable taking on the additional leverage and risk?

—If both answers are ‘yes’: → Go for it. Get more cash flowing properties.
—If either one of the answers is ‘no’: → Consider paying down or paying off your loan(s).

Only you can determine how much risk you are willing to handle. Paying down a loan gives you a guaranteed return equal to the interest rate on the mortgage, plus the additional ‘peace of mind’ that you shorten the term and decrease leverage and risk. Paying off your mortgage requires the financial resources to retire the loan completely. We will see shortly that paying off a seasoned loan has an entirely different rate of return.

Wayne Dyer said: “When you change the way you look at things, the things you look at change.”
Here are two ways to ‘change the way you look at things’ that might help you evaluate and compare the real rate of return.

1)   You may be aware that Hawaii rental properties rarely generate close to 5% net cash flow. However, the net cash flow is only one of six components that make up your real estate investment return. The six components are: 1) cash flow, 2) tax benefits, 3) appreciation, 4) financing leverage with equity pay down, 5) force equity, and 6) buying on discount. It is the cumulative effect of these six components, compounded over time, that has created substantial wealth for wise real estate investors. We explore this in the article Wealth Creation With Real Estate.

The article discusses eight purchase scenarios and calculates the cumulative real estate returns considering these eight different scenarios:

Scenario #1: Cash purchase, buyer’s income <$100K/y, not eligible for sec #469.
Scenario #2: Cash purchase, buyer’s income >$150K/y, not eligible for sec #469.
Scenario #3: Cash purchase, buyer is eligible for sec #469.
Scenario #4: Financed purchase, buyer’s income <$100K/y, not eligible for sec #469.
Scenario #5: Financed purchase, buyer’s income >$150K/y, not eligible for sec #469.
Scenario #6: Financed purchase, buyer is eligible for sec #469.
Scenario #7: Financed purchase, buyer is eligible for sec #469, + $50K forcing equity.
Scenario #8: Financed purchase, buyer is eligible for sec #469, + $50K forcing equity, + buying with $20K discount.

ROI – Cumulative Compounded Return

The chart shows scenarios #4 through #8 using leverage with financing could generate between 20% to 77% ROI after the first year. I’m in the growth mode and when I buy additional rentals I aim to find properties with a minimum of 25% total annual return. If a 25% total annual return is attainable with buying more investment properties, why would I consider paying down an existing low interest rate mortgage?

Maybe this is a mature loan where the balance has been paid down significantly over years. Could the ROI be better by paying off the loan in full?

2)   Instead of looking only at the interest rate, you should consider the remaining mortgage balance in relation to the annual mortgage payment. For example, I have a few 6.75% mortgage loans going back to 1992. Paying down a 6.75% investor loan does not fit into my growth mode. But the remaining balance is rather low since the loan has been amortized over the last 25 years. If I pay off the remaining balance I would instantly eliminate my monthly P&I payment and increase my monthly cash flow by the same amount. That could yield a substantial ROI.

Sample calculation: I purchased an investment property in 1992 with a $100K, 30y fixed rate mortgage loan at 6.75%. The P&I payment is $648.60 per month or $7,783.20 per year. After 25+ years the remaining loan balance diminished to $25,722.34. At this late stage of the loan term most of the P&I payment goes towards principal. The mortgage interest deductibility dwindled to an insignificant amount. Now, if I pay off the $25,722.34 balance today, I would eliminate the $648.60 monthly payment and increase my cash flow by $7,783.20 per year – for the rest of my life. $7,783.20 : $25,722.34 = 30.26% payoff rate of return. Bingo! In this case paying off a 6.75% loan looks attractive.

—  Remember: “When you change the way you look at things, the things you look at change.” Perhaps generating a 30% return makes paying off your mortgage worthwhile, even if your focus is still growth. My personal threshold return rate to pay off remaining mortgages is >25%. Otherwise, in my current growth mode, I’d rather buy more rentals. Your threshold return rate might be higher or lower. You should know what it is.

Here is a simple flowchart to demonstrate the thought process.

Flowchart – Paying off your mortgage or buying more rentals

You are now ready to analyze and answer the main question:

• Determine if you are in the growth mode or the preservation mode.
• Ask yourself the questions on the flowchart above.
• Analyze each remaining mortgage balance in relation to its P&I payment. Determine which one, if paid off, would yield the highest payoff return.
• Establish a roadmap and a predetermined minimum threshold return rate to help you remove emotions when making financial decisions. Ask yourself: “Is the payoff rate of return sufficient and does paying off fit my current financial situation?” If the answer is ‘yes,’ ask yourself: “What else could I do with my time and my money?” If you do not have a good answer, and you have sufficient funds without compromising your emergency reserves, paying off your mortgage might be a prudent strategy.
• Depending on how many properties with mature loans you have, you might end up alternating between the two choices: 1) buying another Hawaii rental property with financing, or 2) paying off an existing mature loan. The flowchart will guide you.

Disclaimer: We are a real estate brokerage selling real estate and not investment securities. History is not an indication of future returns. With all important investment decisions, always check with your favorite qualified financial planner, tax adviser and attorney.

May you live well and prosper. ~ Mahalo & Aloha

We love to hear from you. Let us know your thoughts. Reciprocate Aloha! ‘Like’, ‘Share’ and ‘Comment’ below.
~ Mahalo & Aloha

The post Should I pay down or pay off my mortgage? Or should I buy more investment properties? appeared first on Hawaii Living Blog.

Saikyo Bank – headquartered in Yamaguchi-ken with main loan center in Tokyo – began overseas lending to Japanese nationals who live in Japan since November 2017. When this program launched there was a stipulation to qualify for the loan that Buyer must own at least one other overseas property, which could be used as collateral against such additional purchase.

March 2018 Saikyo Bank updated its program, so Japanese buyers no longer need to own any other property overseas to qualify for the loan program.

Some Overseas Loan Program Highlights:
1) Saikyo Bank has partnered with Nihon Hosho, which will act as hosho gaisha for such overseas loans.

2) Cash down payment must be at least 50% of the purchase price.

3) For purchases over $2,000,000 an appraisal is needed and Buyer can borrow up to 50% based on the appraised value.

5) Loan amount is up to max JPY500,000,000

5) Saikyo Bank can lend on both 2nd home and investment properties.

6) Buyer must hire a property management firm, which has a contract with Nihon Hosho. In other words, if Buyer plans to rent out property, Buyer must use a property management firm, which has a contract with Nihon Hosho. If Buyer plans to leave property vacant as 2nd home, Buyer also needs to hire a property management firm, which has a contract with Nihon Hosho.

7) The property management company is responsible to report if anything is broken or damaged in the property and also if payments are late (e.g. property taxes, maintenance fees etc) among other things.

8) Saikyo Bank cannot lend on leasehold properties.

9) As of March 2018, a 20 year fixed mortgage rate is 2.8%. This rate covers Buyer charges to Nihon Hosho.

11) Loans are yen denominated and can be anywhere from 1 year to 20 years max.

12) Loan program only available for Japanese nationals who live in Japan.

The post Japanese Bank Lending for Overseas Purchases appeared first on Hawaii Living Blog.

Hawaii Real Estate and The Power of Staging –
Neuroscience has proven that people buy on emotion and justify with logic afterward. This holds true even for Hawaii real estate. 95% of the time this emotional buying decision is made subconsciously, often within seconds of experiencing the positive emotion. “It just felt right when I first saw the property.” This intuitive gut feeling then triggers the urge to explore the feasibility which ultimately confirms the decision logically. Studies have shown this decision sequence of ‘emotion before logic’ unfolds regardless of how rational you think you are.

When we represent real estate sellers it is our obligation to provide the experience for the buyer that creates the desired emotion leading to the sale. We showcase your home for sale in the best possible light using:

1. Professional photography to evoke online curiosity and broad appeal to generate showing requests.
2. Effective staging to move the buyer emotionally within seconds after they see the property.

Both are essential when we market your home for sale. Effective staging can cost more than $4,000 but it has been shown to be a worthwhile investment in obtaining a higher sales price in a shorter amount of time.

The buyer typically asks: “Wow, are the furnishings included?” We explain that the furnishings have been rented for staging only and are not included. It is the mere experience of seeing the property professionally staged that evokes the positive emotion in the buyer. The furnishings not being included ends up being irrelevant. The sales decision has been made. We also know that without staging the sale might not happen, as explained in the final example below.

Here are sample properties we recently sold where staging contributed to the success of the sale:

1) Moana Pacific #4708

This high floor 3-bedroom condo at Moana Pacific had been a rental for the last ten years. We recommended replacement of the deteriorated carpet with engineered hardwood floors and painting all the walls. We also recommended replacement of the original granite countertops with quartz ‘snow white’ counters, and new sinks and faucets. The unit looked brand new again, but it was the staging that gave it the finishing ‘wow’ effect and translated into a sale close to the full asking price.

Moana Pacific 1 – before

Moana Pacific 1 – after

Moana Pacific 2 – before

Moana Pacific 2 – after

Moana Pacific 3 – before

Moana Pacific 3 – after

Moana Pacific 4 – before

Moana Pacific 4 – after

Moana Pacific 5 – before

Moana Pacific 5 – after

2) Lanikea At Waikiki #2803

This gorgeous high floor 2-bedroom condo at Lanikea At Waikiki had also been a rental unit. We replaced the worn carpets with new engineered hardwood floors but kept the granite countertops and existing wallpaper. After professional staging, we achieved the look we needed to sell the property at full price.

Lanikea 1 – before

Lanikea 1 – after

Lanikea 2 – before

Lanikea 2 – after

Lanikea 3 – before

Lanikea 3 – after

Lanikea 4 – before

Lanikea 4 – after

3) Canterbury Place 19B

This 2-bedroom, 2-bath condo at the Canterbury Pl had been listed with a different brokerage company for almost one year without receiving a single offer. The condo was not staged and looked clean with all white floors and walls, but it felt empty, sterile and uninviting. I showed the condo to potential buyers and noticed how uninspired they were as they looked at the white empty rooms. They had difficulty visualizing the property as their future home. Prospective buyers could not explain what it was that made them skip this condo as a possible choice. They often could not even recall how good of a view the property offered. It was as if the buyer had a limited recollection of the property because there was no emotional connection made during their visit.
The listing was withdrawn and the seller approached us to re-list the property. We staged the condo appropriately and it sold within two weeks for the price the seller desired.

Canterbury Place – Living room

Canterbury Place – Master bedroom

Conclusion

Each property for sale should be evaluated to determine what cost-effective alterations are most practical to maximize the emotional response of the buyer and increase the opportunity to sell. Staging has become an important tool to achieve that goal.

Call us to discuss the best strategy to sell your home. We are here to help with repairs, renovations, decluttering, staging and maximizing market exposure — to get you top dollar for your home.

We love to hear from you. Let us know your thoughts. Reciprocate Aloha! ‘Like’, ‘Share’ and ‘Comment’ below.
~ Mahalo & Aloha

The post Hawaii Real Estate And The Power of Staging appeared first on Hawaii Living Blog.

Lifestyle, environment and fashion come together in Kailua creating an exciting trend of boutiques that provide unique experiences beyond typical shopping.

Living in Hawaii and particularly in Kailua offers a relaxed, but modern lifestyle where the environment clearly determines much of what we wear. Thanks to the ingenuity, creativity and collaboration of several local fashion partners, finding the right wardrobe without leaving Kailua, is now a breeze. Some new to the trade and some tried and true, these entrepreneurs have unique ideas filled with bold designs and aesthetics, and are hoping to make the world a better and more beautiful place.

Starting off the beaten path, on Uluniu Street, at one of our favorite pockets of fashion in paradise, is Aloha Superette. Aloha Superette is the concept store and vision of owner, designer, photographer and local resident Jennifer Binney, who just oozes style.

Aloha Superette

Clever, creative and constantly changing, Aloha Superette is a retail space by day and an art venue at night. The concept is ‘unexpected shopping’ where you never know what you might find when you pop in – be it art, fashion, photography, and/or home design. Additionally, this collaborative space features artists, authors and musicians in a variety of evening events like book signings, art openings, or live music.

What you can expect to find at Aloha Superette and must have is one of Jennifer’s own designs under the Samudra label. Samudra, which is the Sanskrit term for gathering waters, is apropos for her colorful graphic collection too. Items such as pouches, totes, and cover-ups, as well as home accessories will instantly transport you to a life of wanderlust and oceanside visions.

alohasuperette.com

A different set of collaborators and style-makers, Ali McMahon and Parker Moosman are the husband and wife team and owners of Olive & Oliver. Olive Boutique and Oliver Men’s Shop are located on Kihapai Street with a deliciously chill coffee shop, Chad Lou’s, sandwiched between the two. Olive Boutique, run by local Kailua girl Ali, specializes in women’s clothing and accessories; while her imported, but very cool husband, Parker, runs the male counterpart, Oliver Men’s Shop. These two certainly know how to collaborate, yet keep it separate for the best of both beach worlds.

Ali, owner of Olive & Oliver, with Marcel from Hawaii Living.

Although the two shops complement each other, they have very different vibes. Olive, under Ali’s watchful eye, is a very modern, coastal-chic haven for a quality, handpicked collection of comfortable, and yet, on-trend finds. There’s no need to take a trip to Honolulu for your favorites. Look for upscale but affordable pieces from name brands, Free People, Scotch & Soda, Spell/Byron Bay, Cleobella, Sol Angeles, Clayton, Sundry, et al. Choose from cute tops, relaxed beach pants, on-trend jeans; and we suggest a special nod to their year-round assortment of casual dresses as well as holiday attire. Handmade jewelry from local designers is also a top find at Olive.

On the other hand, Oliver Men’s Shop is a treasure trove. Part curiosity vintage, part hangout and part clothing store, this retro-styled high-end surf shop is the place to be. If you look closely (or feel free to ask), there’s a framed picture of the great Duke Kahanamoku and owner, Alie’s grandfather, John McMahon. Even Alie’s grandfather’s swimsuit from the 1930s is on display. What’s current then? — The fashion gear and mix of T-shirts, sweaters, shorts, shirts plus beach and about-town accessories of hats, shoes and sunglasses. Try on styles such as, but not limited to, Banks, Journal, Saturdays Surf NYC, Scotch & Soda, Fred Segal, Napoli, and Birdwell.

oliveandoliverhawaii.com

Men seem to be of the moment in Kailua and those in the know will head over to Aloha Beach Club on Hekili Street, where they revel in the clean designs and aestphetics of this mixed-use retail space. Another concept store, Aloha Beach Club is part lifestyle-menswear shop and part local-hangout (The Local is inside the store – natural shave ice, craft sodas and café.) Perfect for your shopping pals to enjoy some treats while you select and model your new garb.

Aloha Beach Club

The menswear is an exclusive collection designed by a collaborative effort of artists, friends and entrepreneurs from Hawaii and California, who appreciate the finer things in life, including good design, clothes, art, and, of course, the beach.

Founded by local Kailua boy Kahana Kalama and his friend, Billy Wickens, the two have created a very, clean-lined, beach-inspired look that works as well on surf or turf. The story goes that Kahana and his brother Kamohai tried to borrow dad’s Aloha shirts (must-have business wear in Hawaii) and were swimming in the boxy big shirts. Today, crisply tailored, smart, yet comfortable aloha shirts line the shelves of the minimalist space at Aloha Beach Club. Current trends of board shorts, hats and home goods round out the look. A big plus is most of the apparel in the store is made in Hawaii.

alohabeachclub.com

Teams of twos seem to be the driving force in many of Kailua’s go-to boutiques and Fighting Eel is no exception. Owners and fashion designers Rona Bennett and Lan Chun began showcasing their designs under the label, Fighting Eel, in 2003 and have since opened premier made-in-Hawaii boutiques including one location in Kailua.

Fighting Eel

The award-winning dynamic designers produce original pieces from scratch for the store that are both sophisticated, yet relaxed, and perfect for paradise living. The core of their collection is uncomplicated feminine designs that can take you from the beach to brunch, including dresses, tops, shorts, pants, kaftans, jumpsuits and rompers.

The two have recently launched a second label, Ava Sky, inspired by Lan’s daughter Ava. Ava Sky collection also features a ‘mini-collection’ in children’s sizes, 2- 10. The girls’ styles are highly sought after, particularly for special occasions. Matching looks for mom and daughter will make any picture perfect. Designer jeans such as Mother denim, swimsuits, bralettes, beach accessories and even locally-designed jewelry add to the Fighting Eel label and shopping experience at the boutique.

fightingeel.com

To our benefit, these aesthetics, concepts and partnerships have made it that much easier for us to look smart and current while living in Kailua and Hawaii. These aren’t the only fashion know-how partnerships. Look for future updates on Kailua’s current fashion scene to be in the know of what to wear and who is collaborating with whom.

The post Kailua’s Fashion Collaborators Have You Covered appeared first on Hawaii Living Blog.

Colony Beach #4 was just listed by Marcel Chan for $3,500,000. Address: 2893 Kalakaua Ave.

The Colony Beach is arguably the most exclusive condo building on Diamond Head’s Gold Coast and one of the most unique condos in Honolulu.

This highly coveted property has just 8 apartments total – 1 per floor with a private keyed elevator opening up to your own foyer. Colony Beach #4 is a large 2BR unit with an oversized balcony (300+ sq ft) boasting amazing ocean and beach views.

The building is located in between 2 of Honolulu’s most stunning white sandy beaches: Kaimana Beach in front of Sans Souci and Outrigger Canoe Club Beach in front of Colony Surf.

Here are a few pictures from Colony Surf #4:

Contact Marcel for more information.

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