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$8000 First Time Home Buyer Tax Credit Explained in Video – Do You Qualify?

Thanks to “Neenz” Faleafine for adding it there!

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Hawaii Real Estate Reporter on ALLTOP.COM

What did you think of this video? Please leave comments below!

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How Interest Rates Effect Buying Power

The data is supplied by EDR, Environmental Data Resouces Inc., and you can get a complete inspection from the company for a property for $99.

Probaly not a bad idea to plug in your address and give it a try. Even better if you are planning on buying a place to take a look. Did anyone find anything bad they didn’t know about by thier house? Let me know in the comments.

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Free Basic Environmontal Hazard Profile for Your Home

Question: 4% Comission or Price Reduction?

Aloha Bill,

My client is very frustrated that his property is not selling. He is currently priced above market, but is asking if whether offering 4% commission or reducing his asking price would be more productive in today’s market. Do you have an opinion?

Anonymous (to protect client privacy)

RE: 4% Comission or Price Reduction?

Aloha Anonymous,

Great question. The price reduction is probably better. The 4% commission is designed to attract more attention to the property, and it may generate more activity (calls, showings etc.). However, activity doesn’t always translate into a sale.

When you’re selling a lower-priced product, there is a very strong relationship between “foot-traffic” and purchases. If more people walk into the The Gap, they are going to sell more sweaters. This principle doesn’t apply well to overpriced homes because people are much more serious about getting a good deal on a home than they are on a sweater.

The 4% commission is also often interpreted as a sign of weakness by buyers.

Thanks for the question.

Bill

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Ask Bill Chee: 4% Commission or Price Reduction?

How to price a property to generate interest, momentum, and better offers:
1. If a home is priced just below market, the excitement of the market produces more competition between buyers and higher sales prices.

2. Calls to realtors turn into showings when price is excellent.

3. When salespeople are excited about a home and its price, they make special efforts to contact all of their potential buyers.

4. At market value, you open your home up to more people who can afford it. More potential buyers, means more potential offers.

5. When a home is priced right, buyers fear they might lose out on a good home, so they are less likely to make lowball offers.

6. Keep in mind that statistics show that generally the first offer is the best offer.

7. When your home sells faster, you save carrying costs, mortgage payments and other ownership costs.

8. During the first four weeks your home is on the market, the most eyes are on your property—therefore it is essential to price your home right. Homes priced at market-value will ensure solid interest from brokers and buyers.  See the chart at the bottom of the article.

The downside to overpricing
9. If your house is overpriced, agents are going to show similar homes that are priced more attractively. Your listing will get passed over.

10. Don’t overprice. If you do, it may become necessary to drop the price, often below market value, to compete with new, competitively priced listings. Once you start lowering the price, other agents and astute buyers wait for further price reductions which further reduces interest and momentum.

11. The most common mistake sellers make in overpricing is to use other ‘Listed Prices’ of properties to determine their sales price. A listed price is not the market value of a home. It is the ‘asking’ price of another seller and may have no relation to the actual market value.

determining the right selling price
12. To help determine a selling price, use Comparative Market Analysis or CMA. CMAs give the sold price of comparable homes in your neighborhood. Your realtor can get you this valuable information.

No Realtor, no friend, no neighbor can set the market value for your home.
Only the “Market” sets the price for a home.

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12 Tips for Pricing Your House to Sell

How do you sell a house in 7 days in a market where, for most sellers, 50 to 60 days is the norm?

Colonel Christopher Mullin, weapons systems officer in the U.S. Marine Corps, says he did it with the help of a Realtor he trusted completely who developed a tailor-made marketing and pricing strategy.

“I had the right guy,” says Colonel Mullin, who originally purchased his Aiea Heights home from Prudential Locations agent Marshall Mower. “Marshall knew how to market my property. I pretty much gave him clear instructions that I needed to sell quickly, and he executed the task flawlessly.”

Mullin originally purchased the home in 2004 when he received what he envisioned being his final set of military orders to the Marine Corps base at Kaneohe Bay. He had already served two tours in Iraq and one in Afghanistan and was ready to make Hawaii home for himself and his son.

“My intent was to come out here, work on my MBA at UH, and retire from the Marine Corps … so I bought a home,” recalled Mullin, a single parent. “But like the military often does, they change things and 11 months later they gave me new orders and I was transferred to South Carolina.”

He and his son moved four times during the last five years. In 2006, he was deployed to Iraq for his third tour — this time as the commanding officer of an F/A-18 fighter squadron.

Throughout his deployments and his moves, he was able to keep his Aiea home rented, but the rental income was not covering all his costs. And because he owned two other homes, his debt-to-income ratio was high, which together with tighter lending criteria made it difficult for him to refinance. In April, he decided to sell the Hawaii property. Being 5,000 miles away, he knew he needed to rely on his Realtor completely for sound advice, to take care of all the details and to come up with a strategy.

Pricing strategy
“Our pricing strategy involved studying the ’sold’ comparables and then pricing at or slightly below current market value to gain the most interest from buyers,” says Mower, who has helped many military servicemen buy and sell their homes. “Buyers see the property as priced well and being a good value compared to other overpriced listings. In fact, the overpriced listings actually help my listings to sell more quickly and for the best possible price.”

The strategy made perfect sense to Mullin.

“I had been thinking like an investor and was not being realistic about learning where the market was at currently,” says Mullin. “That was probably Marshall’s most convincing advice to me.”

Marketing strategy
Mower also informed his client that there were a lot of buyers out there looking and that it was critical to show the property in the very best light. He recommended several repairs be made.

“Marshall was my eyes and ears,” says Mullin. “He sent me pictures of items in need of repair and estimates of how much each would cost, emphasizing that we only get one chance to make that first impression.”

Everything was aimed at what would appeal to the buyers.

“Marshall said all the right things in the ads,” recalls Mullin. “He made sure people knew that people in the neighborhoods drove slowly because there were families with kids there.”

A heart-to-heart with the tenants, enlisted their support — an important component.

“After talking with the renters, I found that they realized this was a buyer’s market and really wished they could be out there buying something,” Mullin says. “They were happy at the idea of being able to get out of the lease and became real accommodating giving us access to show the property. It was a win-win for everyone.”

Mower says after two open houses and seven private showing appointments in as many days, “we accepted an offer for $1,000 above our asking price.”

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How to Sell Quickly and Get Your Price

By Lisa Scontras
Custom Publishing Group

Waiting for the right time to release a summer blockbuster movie makes show-biz sense. Waiting for a bottle of wine to be perfectly aged is almost an art form. But waiting until the price of homes in Hawaii come down? You might just wait forever, says Carl Worthy, training director at Prudential Locations.

“I remember one of my first open houses in Manoa in 1972, the home was listed at $65,000,” says Worthy. “And at that first open house, most of the people who attended told me very emphatically that prices were going to fall and that ‘these high prices cannot possibly hold.’ I wonder how many of them missed out altogether?”

Worthy’s 35-plus years of experience in the real estate business says that “waiting is the human default position taken when we’re confused or not sure of what we’re doing.”

“I hear things like,’My hairdresser says prices are falling so we better wait,”‘ he says. “But waiting can be very expensive.”

Worthy says there is a misconception that home prices are falling in Hawaii. In fact, while there have been slightly fewer sales, the average price for single-family homes on Oahu is up 2.4 percent through May 2008, and the median price of condos is rising as well — setting an all-time record high in May of $337,300. Prices are actually up.

With interest rates on the rise, he adds, waiting is going to actually cost you.

“Interest rates will be heading up very soon,” says Worthy. “Count on it.”

Rates have been at their historic lows for several years now. Consumers have almost become complacent — in a form of denial not believing that low rates are poised to change anytime soon. The Federal Reserve has kept rates low to date to stimulate a sluggish economy and earlier this year to bring some liquidity to the financial markets to offset the destructive subprime nightmare. But now, according to Worthy, there are bigger problems.

The U.S. dollar is weakened by the repeated lowering of rates. Inflation is high because of the weakening dollar. In the minds of the Feds, the one thing worse than a weak economy and market liquidity is escalating oil prices and inflation.

“The Fed has one response to inflation, and that’s higher interest rates,” say Worthy. “Today’s low interest rates are headed for extinction — quickly. And they are not likely to return anytime soon.”

Once rates start rising, even if the price of a home does go down, buyers will pay more. Remember when rates began falling from 8 percent in early 2000 to 7 percent about a year later, 6 percent in mid-2001 and then dipped under 6 percent in 2003? Buyers realized that as rates fell, their buying power increased. And the inverse is also true.

When interest rates go up, the amount a buyer can borrow for a home goes down.

“If home prices were to drop by 10 percent and interest rates increased by 1 point, the buyer’s monthly payment would actually be higher for the same home,” says Worthy. “If rates go up, the loan amount goes down — in direct proportion. That means the price a buyer can pay for a home goes down — a lot.”

For example, on a $600,000 home, he says if interest rates go up just one point, the buyer loses $60,000 in buying power. That means the same buyer is now only qualified to purchase a home for $540,000.

Interest rates ultimately have a much bigger impact on cost than the purchase price does.

Worthy adds, you’ll feel the effect of the purchase price of the home only once … you’ll feel the effect of the interest rate you pay every month, when you make your mortgage payment.

“So the question you should ask is, what is more likely to happen: a 10 percent fall in home prices or a 1 percent rise in interest rates?” he says. “Truthfully. I have been selling real estate since 1972 and I can’t recall anyone ever telling me that they were sorry they went ahead and bought something. However, I have had hundreds tell me their horror stories when they waited.”

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Buyer beware of what waiting can cost