Single Story Homes Vs. Two Story

When you're searching for a home, one of the first things you'll decide is how big a home should be for you. In Hawaii homes are smaller than on the mainland overall. You might be coming from Texas where a $300k home has over 6000sqft. On Oahu that same money will buy you a 2 bedroom condo of about 900sqft. Hey, it's Hawaii.

One way to get more home for your money is to look at single story homes. A two story home has around 15-20 steps, each of which take up square footage. There is usually also a landing area and some hallway that is not really usable space.

Yesterday I was looking at homes in Ewa Beach around 1200-1400sqft, and we found that the 1200ft single level homes felt larger, and had more usuable space in the living room and bedrooms.

We saw a little 1069sqft house that seemed bigger than all the 1300ft two story homes we looked at. It had a larger living room and kitchen, and even the master bedroom was quite a bit larger.


So if you are thinking about how many square feet your home should be, remember it's a different number if the home is a single story home. And the funny thing is, you might pay more for two story homes even though they are cheaper to build. Single story homes by their nature take up more land on a lot, which is why two story homes can be more preferable if you're trying to save lot space.

How to negotiate when buying or selling a home in Hawaii

One of the most important skills a Realtor must possess is that of negotiation. It's one thing to market and make a house look nice, and even to get people to bring in offers, but the bottom line is almost always the price. (Sometimes it's the timing.)

So let's take an example from my recent negotiations. Suppose you're my client on a purchase, and we want to buy a house that is listed for $700k in Kailua. You like the house and you're willing to pay about $680k for it. What should you offer?

Not so fast. The fist step is to find out as much information about your seller as possible. Is he buying a condo somewhere? Is he in escrow already? Is he moving to the mainland? Has he already bought another house in Kaneohe? Is he paying two mortgages? Is there a divorce or a marriage? Kids? Job transfer, layoff, or promotion?

All these things can be discovered in a few short minutes by talking to his agent. If his agent is smart, he won't reveal a lot, but you would be amazed at what people are willing to disclose once you show them that you are a nice person who is not going to be disrespectful.

So based on the information you get about the seller, you might realize that the seller really wants to close fast, or close slow and have a big non-refundable deposit. Or you may find that the seller is in a bind on his mortgage, and it would help if he could get some rent from you before closing.

The point being, sometimes you can put things in the contract that are about as valuable as money. I've had sellers take very low offers because we offered to close quickly, or because we offered to move in and pay rent up front.

I've also had buyers pay more to move in at their timing, which is sometimes slow. I've had buyers willing to pay more if the seller is willing to stay in the house after closing and pay the buyers some rent.

So take our Kailua house for $725k. If you want to pay $680k, and you know the seller is motivated, what should you offer? Probably something closer to $660k, so the seller has room to counter offer. But first, you should check and see if the price is going to be offensive, and cause them to not respond.

Usually I'll prepare and offer and then call the listing agent to see if our offer is going to result in some bad blood. Often, just talking about it ahead of time can make it easier for the seller. If they know that we aren't trying to be offensive, then it can make things smoother. In Hawaii, there isn't really a standard amount that you can offer below an asking price, but when I represent sellers I tell them to expect low offers that we will counter offer and get to where we want.

When I'm functioning as a listing agent, I tell my sellers to take a position of strength. Do we need to hold out for a good offer? Maybe we need to keep countering on low offers to keep the process going, so that other people who are interested can know that we already have an offer.

When you're negotiating the difference of tens and hundreds of thousands of dollars, you want a strong Realtor who is willing to do what it takes to get the best deal for you, whether you're the buyer or seller.

It's kind of like playing Poker. Sometimes you have to act strong when you're weak. Maybe that's why I like it.

As for the house in Kailua, I can't disclose the price yet because we're still in escrow. But we did pretty well...

The Oahu real estate market always picks up in January

It's Christmas time, and I'm in Montana visiting my wife's family, but between chasing kids and watching old Christmas movies, my mind has been on Oahu real estate. I'm getting showing requests even on Christmas Eve, with some buyers using their vacation time to shop for a home.

While the week of Christmas is always slow in every real estate market, the first couple weeks of January are always the big pick up in the market. There are plenty of sellers waiting to list their properties until after January 1st, and plenty of buyers also waiting to buy something until then.

The best way to stay on top of the pick up in January is to actually prepare before then. If you're planning to sell a home after the new year, get your documents in order now, take your pictures, prepare your advertising, and get your survey ordered. Don't wait until January 2nd when everyone else will be hustling. Instead, if you get all your ducks in a row now, come January you will be ahead of everyone else and ready to move.

If you're thinking about buying a house in Oahu right now, start narrowing your list of properties, preview them if possible, and make an appointment with your Realtor (me) early. I already have bookings for mid and late January, so you don't want to wait long! In fact I have clients coming just after Christmas, even before the new year begins.

Each year the inventory drops down a bit in the fall and picks up a lot in January, along with the number of sales. It's the perfect time to act. You want to be done with everything early so you're not stuck on the market in the late Spring. The hottest times of the year are January-February, and June-September.

So if you're thinking about moving in the New Year, now is the time to act.

Multiple offers on Oahu homes. Beat them all with this sure fire strategy.

While most of America's real estate market is struggling along, Oahu homes are still selling fast. Multiple offers are still coming in for homes that with a reasonable list price. So if you find a house that you really love, let's say in Kailua, and you want to make sure your offer is the one to get accepted, what should you do?

One great tactic is the "escalation clause." Since that term doesn't mean anything to most people, I call it the "outbid clause", because it's more obvious. Once you have written the offer you want to present, you call the listing agent to find out when they are planning to present their offer to the seller. Send your offer in at the latest possible time, and put something in your offer that says something like, "if the seller receives a higher offer than this one, this offer to automatically increase by $10,000 over any other offer up to a max of $800,000 purchase price."

Yes, it's nearly bullet proof, unless their are factors out of your control, like the terms of other offers. If all the terms are similar to yours, then you should be the lucky buyer. Usually .

It's true that most properties today are not selling with multiple offers, but when you find something really great at a great price, you can bet the buyers will be jumping on it. Even in Ewa Beach, if a house is priced right, it may get lots of attention. With the military announcing a huge influx of soldiers to Hawaii over the next couple years, I'm sure housing on the west side is going to get very tight again.

The problem right now is that you can't find a decent house on the east side for under $2million. And even then, a lot of the homes are a bit junky. Yes, it costs $2million for a nice luxurious feeling house. Sure you can get a decent place for a lot less, but not the type of house that most people from the mainland are used to.

When I visit my relatives in CA and MT, and see their massive suburban homes, I realize how hard it must be for people to come to Hawaii Kai and Manoa and see these tiny lots with old homes for a million dollars. Home on the mainland that would cost only $250k or so sell for over a million in Kailua, Diamond Head, and anywhere in Honolulu.

So when you find a real good deal and a nicely built house, you may have to jump on it with several other buyers at the same time. And if you really want to make sure you get your offer accepted, use an escalation clause.

Using VA above the conforming limit

Did you know that VA will allow you buy above the conforming limit of $625,500?

I was just told yesterday that you can buy a house over that amount, if you have 25% down on the amount over the limit. So if you are buying a house in Kailua for $700k, you just have to have 25% of the $74,500 by which you have exceeded the limit. In this case it would be $18,625.

Of course you'll have closing costs on top of that, so it's not quite as easy as the zero down VA loan which so many military families love. But if you want to live in one of the more expensive areas like Windward Oahu and Hawaii Kai, this option may be the best thing for you.

Usually, military families buy homes in cheaper areas like Mililani, Waikele, Royal Kunia, Kapolei, and Ewa Beach. But some of the higher ranking guys get a very nice housing allowance, which means they can afford the payment on a great house in either East Oahu or the Windward side. In that case, I would recommend either talking with Navy Federal credit union about their Veteran's Advantage program, or using the VA jumbo loan.

In places like Royal Kunia and Mililani, houses can be well over the VA loan limit, so having alternatives is important. A nice house in Mililani these days is running right around the $650k mark and looks like this.

Want to sell your home? A lockbox can be all the difference

Last night around 6pm I got a request to show my listings on the beach in Waialua, which are $3.2mil and $2.7mil. They are beautiful brand new houses on the water, with huge 4 car garages and great lanais overlooking the ocean.

When the request for the showing was made, it was late in the day, way too late to go up there and let anyone in. Also we needed to get a cleaner in there before the showing. Thankfully we had a lockbox.

Some sellers insist that they don't want a lockbox, because they are afraid people will somehow abuse it by keeping the code and coming back unannounced. I've never had this happen to me before. Well this situation, we would not have been able to show the property without the lockbox because the seller was out of town, and his friend who was house sitting was not available right away. The lockbox saved the day.

Some Realtors want to be at every showing, which I suppose is easier when you have only a couple listings. This is not only very difficult to do, it can actually keep you from selling your home. If people can't see your home, they're not going to buy it, period.

In Oahu most Realtors sell property on the entire island, because the island is only about 50 miles across. So if I have an appointment in Kailua and your house in Mililani needs a showing at the same time, the only answer is to have a lockbox. If you're serious about selling your real estate, you need to have a lockbox.

Ok, You're planning to move to Hawaii, but when should you start looking at houses?

Most of my blog posts are prompted by questions that people ask me by email or phone. This week someone emailed me and said they are planning to move in April, about 8 months out, wondering if they are looking at houses too soon.

Well the short answer is you should start as soon as possible.

As soon as you even the thought of moving to Hawaii, even if your plans are not definite, you should start looking at homes here. The more time you have to look at homes, the more you'll understand our market. You'll see that homes in nice condition tend to sell in about 45 days, and you'll be able to see the sales prices very close the list price in certain areas.

Also the longer you have to look at the market, the more you'll be able to get a feel for what type of homes come up for sale in certain areas. For instance, in Hawaii Kai there are only a few homes on the marina for sale at any given time. If something comes up that you really like, you might have to move on it before your time to move comes, because only a few are listed each year. Maybe 30 a year, which is not a lot.

In Mililani, you'll find that some homes have an ocean view, but not many, because it's about 15 miles inland. In Kailua, only a few homes a year are listed for sale that are lake front, on Enchanted lake. Or if you want Lanikai, you better start looking really early, like a year, because half the listings in Lanikai are completely junk, and the other half tend to be about $5million.

If you study the market in Oahu for a while, you'll find that in many areas, homes are each unique, because a) there were not big home developers planning this island and b) depending on type of person lived in the house, there could be a lot of strange improvements made over the years.

You just can't be too prepared when looking for a house in Oahu. The more you know, and the longer you have to learn, the better your buying experience will be. Then if you come to Oahu and spot something that you know hasn't been on the market for a long time, you'll be aware that you should act on it fast. I've had several clients who didn't act fast enough or write an offer high enough, who ended up really disappointed later.

I had one client who kept wanting to offer about $20k under the asking price, even though I kept telling him he would never get the offer accepted. Each of 3 times, his offer was flat out rejected and sold to someone else within days. Why? Because he didn't understand that the market in Oahu is not like the mainland. Our supply is limited and the sellers are very confident (in most areas, not Ewa Beach.)

So if you even have an inkling that you may be coming to Oahu in the next year or two, it's time to start watching the market. Email me all your parameters and I'll setup an automatic Hawaii MLS search for homes for you so you can keep track of what's going on.

Order your survey before you find a buyer

The Hawaii real estate purchase contract allows for buyers to review the survey of any single family home or land for a number of days agreed upon by the buyer and seller. If you wait until you find a buyer for your home, the buyer can take a look at something on the survey and decide to cancel the transaction, especially if he is already looking for a way to cancel.

Here is what the Hawaii contract actual says:

No later than days prior to the Scheduled Closing Date, Seller shall, at
Seller's sole cost and expense, have a registered land surveyor (a) stake the
Property even if the stakes are visible and, (b) if improvements exist along the
Property line, provide Buyer with a map (with surveyor's stamp) and accompanying
report to show the perimeters of the Property and the location of any improvements in the vicinity of the perimeter Property lines. This survey and map may not address whether improvements on the Property are in compliance with State and/or County requirements, and/or subdivision covenants, conditions, and restrictions. Boundary Encroachment. If an encroachment onto an adjoining
property or onto the Property by an adjoining owner is revealed or discovered,
such encroachment either shall be removed or Seller shall obtain encroachment
agreement with the affected adjoining owner(s) which is acceptable to Buyer. If neither occurs within ______ days of discovery or by the Scheduled Closing Date, whichever occurs earlier, Buyer may accept the encroachment(s) or elect to terminate this Purchase Contract and the termination provisions of Paragraph C-30 shall apply. Under Chapter 669Hawaii Revised Statutes (deminimis), certain tolerances for discrepancies involving improvements built along the boundary line of the Property for specific zonings are established, and such improvements shall not be considered encroachments.

It's the blank in the 2nd paragraph that you have to pay attention to. The property lines of Hawaii real estate are very often a mystery when you view them for the first time. Since our topography is so hilly and roads tend to be windy, lot lines are frequently curved and odd shaped. You rarely see just square lots anywhere, even in the new home tracts, because our land just isn't square and flat. Imagine trying to build a bunch of evenly spaced square houses on an island shaped like this.

So when walls and buildings are built, it's very common to have encroachments over boundaries of a house, especially in older areas of Kailua, Aiea, and Honolulu (town). I'm not sure if it's because of the surveying practices from the early days, but newer homes in Oahu have far less issues with encroachments. I rarely see problems in Ewa or Kapolei, and even Hawaii Kai, which was mostly built in the 60's and 70's.

So what you don't want is - you don't want your buyer to back out of a transaction 20 days into it because he sees that your land has a couple encroachments. It's better to show them the encroachments up front while they're still in love with the property. You can even demand that they sign off on the survey on the day of acceptance, so it doesn't become an issue at all. This is just plane smart. Even though the survey costs around $850 for a flat lot of about 7000sqft, it's money that you're going to need to spend anyway. Plus, the survey doesn't expire or need to be updated unless new walls are put up or old ones are moved.

So if you want to save yourself some headache when selling your home in Hawaii, get the survey done before your buyer shows up.