Being diligent and watchful of the Wailea real estate market, when particularly good values come on the market we inform clients so they can make a timely decision if they are interested in pursuing. Today, we will share with our readers some opportunities that have recently become available (more…)

Time and time, we are contacted by buyers who are ‘looking for a great deal on a foreclosure’, because… well, just because. They have heard – on the news, radio, newspaper, bulletin board, through a cousin, wherever – that REO’s and short sales are the best deals. And the resulting absorption rate of these properties is impressive. Our current inventory of condos is 1,001 and 37 of those are REO’s (easy math on this one, 3.7%), yet in the past month 18% of closed sales were REO’s.

So with all the frenzy about ‘smoking deals on foreclosures’, it begs to question whether they really are the best values on the market. For example, we had posted about what we considered to be a particularly good deal at Na Hale O Makena, which ended up selling a month ago for $925K, at 72.54% of the reduced asking price ($1.275M).  Since Na Hale O Makena was built in 2002, only 3 units have sold for less, and in the 2 years prior to this sale, the average selling price had been $1.63M. The sale in question was not a REO or Short Sale. Compare that to a Halama oceanfront home we had mentioned on a previous post. It was a REO (foreclosure/bank-owned) listed for $2.6M, went under contract within 2 weeks of listing,  and its sale closed a few days ago for $3.02M, 116% of the asking price. On multiple-offer scenarios, it is not uncommon for a buyer’s emotion to take charge and result in a bidding war. Was it a good deal? Arguably it was well within its fair market value spectrum, but  not an obvious well-below-market sale.

Properties are priced individually and reflect different motivational levels on the part of the seller (as well as their grasp on reality). There are many properties in the Maui real estate market in which a conventional sale property is priced below its comparable REO counterpart. Instead of focusing on classification (i.e. REO), buyers would best be served by being represented by a knowledgeable Buyer’s agent who can find/negotiate the best deal on their behalf.

Disclaimer: Information above relating to real estate values are the opinion of the poster based on available data and are not a formal appraisal of said properties.

One of the biggest pieces of legislature concerning the foreclosure process is Hawaii’s Act 48, which was implemented in May. Take a moment to read more about Act 48 and how it changed the foreclosure process in Hawaii. There have been a myriad of consequences, some expected by those who crafted the legislation and some unforeseen.

First, Fannie Mae et al quickly adapted by changing their policies, whereby they would be pursuing foreclosures through the judicial route rather than non-judicial. Some critics say that foreclosing lienholders are skirting around what the legislation intended to do (protect homeowner’s rights), but clearly the judicial route was always an option. When there is a traffic jam in your favorite shortcut home, you take the longer way that still gets you there. This should have been expected and is well within the lienholder’s rights to do so. In addition, as owner-occupants are allowed to request mediation on non-judicial foreclosures, this is allowing homeowners more time in their home. Although the intent of this legislation is to allow homeowners (who must be occupants of the property) an opportunity to meet with their lender and try to work out mutually agreeable resolution, it is also clear that many may use this method to stall the process and prolong their stay in their property – presumably without paying mortgage payment during the foreclosure process. Furthermore, with some of the largest lienholders foreclosing judicially now, it has created a logjam in the courts, which were already underfunded and understaffed. This is merely prolonging the inevitable: these distressed properties must be absorbed by the market. Whether it happens now or in 2 years, it is a reality that we have to face.

Act 48 had a noble intent: protect rights of homeowners at a time when lienholders may be hastily foreclosing on properties. However, the implementation of this legislation fell short of its mighty objectives. If you have been impacted by Act 48 or have feedback, leave us a comment.

The real estate industry has been rocked to its core this week, with more and more news developing on the Robo-signer scandal.  In essence, a few lenders are said to have associates who signed affidavits regarding foreclosure proceedings without properly verifying that the information was accurate/correct. It specifically relates to 23 states permitting judicial foreclosure proceedings  in which these ‘robo-signed’ documents are in question (Hawaii being one of those states). How will this scandal affect the real estate market? Some of the biggest lenders in the industry, including Bank of America and PNC Financial, have already halted the sales of foreclosed properties as well as GMAC Mortgage and JP Morgan Chase reviewing their policies as they regard to foreclosure proceedings in judicial foreclosure states to ensure compliance with applicable state laws and statutes.

This scandal can have the negative effect of putting ‘cloud’ (doubt) on the title of a property and making the purchase process considerably lengthier (that is, when lenders  lift their halt). Those seeking to buy REO’s (foreclosures) must do so with caution and employ the services of a real estate agent knowledgeable with the local market. With many conventional sales competitively priced to REO price-levels, I’d urge potential buyers to seek the best deal and not focus on REO’s and Short Sales exclusively. Should you wish to explore the Maui real estate market, contact Mariah at Mariah@MauiRealEstateSearch.com or at 808-385-5034.

REO offers great opportunity to own in Maui Meadows

Interested in a great deal in Maui real estate? Then this Maui Meadows REO is one to consider. It is a 3 bedroom / 2 bathroom home with a 2 bedroom / 1 bathroom detached cottage (Ohana) on half an acre is listed for $851,400. The average price per square foot in this area is approximately $360, whereas this home is priced at $280 per s.f.

For those not familiar with Maui Meadows, this area is among the most desirable (and unique) areas in Maui, with large multi-million dollar estates nestled among Hawai’ian inspired homes.  Most homes in this area sit atop large parcels, making it ideal for those looking for privacy, exclusivity, and a taste of the Aloha lifestyle.

Search for other Maui Meadows homes for sale and contact us for more information on this and other fine Maui properties.