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Short Sales in Hawaii Are Alive and Well

By 1SG (Ret.) David Kucic

Real Estate Agent with Hawaii Military Realty, Inc.

November 27, 2008 01:20 PM

This article is meant to dispel rumors about Short Sales in Hawaii. It may apply to other states as well but I am unfamiliar with the laws of other states and cannot claim to know their procedures.

Many uneducated real estate agents don't want to touch a Hawaii Short Sale whether they are representing a buyer or a seller. This holds true for Hawaii VA Short Sales too. That is too bad for you, the consumer and potential buyer of a Hawaii home.

Some of the most common excuses that I read and hear from these Hawaii real estate experts and specialists is that "short sales are difficult to work with and take a long time".

Damn right they are difficult to work! But if you want to practice what you preach and do what is best FOR YOUR BUYER OR SELLER and QUIT THINKING ABOUT HOW MUCH WORK ITS GOING TO BE FOR YOU!

Sellers don't want to be in a short sale situation. The Hawaii real estate market has forced these Sellers into this situation and they need PROFESSIONAL HELP which from what I read, is what all of the agents say they give. Profiles that say thing such as.................

"I am looking out for your best interest", "Call me for courteous professional service". "I will provide you with the best information possible for you to buy a house". All of these claims are a bunch of crap unless you are willing to show Hawaii Short Sales to you buyer and at least explain FACTS to them rather than EXCUSES for not showing them Hawaii Short Sales.

If you are a buyer and are not being shown Hawaii short sales and if you are not getting help with the sale of your Hawaii short sale as a seller, then I seriously question why that is the case.

These are some facts about Hawaii Short Sales:

Not all HAWAII SHORT SALES FALL UNDER ACT 137 SO DON'T LET THAT SCARE YOU.
Some of these short sales are in EXCELLENT condition and look better than properties that are not in a short sale situation.
Short sales can be difficult but if you have a Hawaii Real Estate professional that knows what they are doing, the process can be much easier.
Short Sales can be closed in as little as 30-60 days if the Hawaii Real Estate agent has been thorough and diligent in preparing the short sale for purchase.
Hawaii Short Sales can allow a buyer to purchase a property for as little as 82% of fair market value and possibly lower.
Hawaii Short Sales can take many, many months to close IF the proper preparations have not been made.
You CANNOT be on a strict timeline to purchase a home and need to have a Plan B.
The real estate brokerage may earn less of a commission on a short sale. This is absolutely true but if it is in the best interest of the Buyer or Seller.....then so what?

If you are interested in purchasing Hawaii Real Estate and have time to wait on a short sale, make sure you are being shown ALL of the available properties to include Short Sales in Hawaii.

For more information on the availability of Hawaii Short Sales and Hawaii VA Short Sales, contact me anytime.

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Randy L. Prothero

eXp Realty - Hollister, MO

Missouri REALTOR, (808) 384-5645

Two of the local escrow companies reported they are currently averaging 6-7 months for an escrow with a short sale to close. That is a number that we also need to share with our buyers, so they can plan accordingly. I am finding most of my buyers are not prepared for the delays and the hassle. The banks need to improve this situation. They causing a lot of unnecessary pain.

Nov 27, 2008 02:43 PM

1SG (Ret.) David Kucic

Hawaii Military Realty, Inc. - Ewa Beach, HI

President and Owner

Those numbers you use are a direct reflection of "Uneducated Real Estate Agents". Many agents that list Hawaii Short Sales should not be listing them because they dont know what they are doing and dont want to go the extra mile to make it a successful short sale. An "Average" means that there are some less than the numbers you used and some more than those numbers. Buyers deserve the opportunity for their real estate professional to do some research on available short sales and determine if there is something available for them to pursue that may be a short term aquisition rather than the long term. All banks cant be classified as giviing "un-necessary pain". Wells Fargo and US Bank are currently doing a great job with two of my short sales. I agree that its not for all buyers and they need to have time and patience but if they do have time and patience, they should be shown short sales.

Nov 27, 2008 03:28 PM

Randy L. Prothero

eXp Realty - Hollister, MO

Missouri REALTOR, (808) 384-5645

Which short sales are you finding do not fall under Act 137 and how do you determine that? Even listings that are not short sales may fall under Act 137, if they get behind on their mortgage payments. Many lenders will not do a short sale until sellers fall under that category.

In training sessions the experts are saying that over 1/2 of the short sales in Hawaii are being handled in violation of Act 137.

The mainland banks with most of the short sales are the ones taking the longest to close escrow. I have a buyer who got a verbal acceptance of our offer for an REO with one of them about 10 weeks ago. They still have not provided the needed documents to even open escrow.

Nov 28, 2008 04:55 AM

1SG (Ret.) David Kucic

Hawaii Military Realty, Inc. - Ewa Beach, HI

President and Owner

In order for a short sale to fall under Act 137, you must have both of these elements: A Distressed Property and a Distressed Property Consultant (Per clas with Real Estate Attorney James Stone of Lawfirm Pitluck, Kido and Stone).

In order for you to have a Distressed Property, the Seller must be more than sixty days delinquent on on the loan, nonpayment of taxes, lease assessments, association fees or maintenance fees and therefore had a lien or encumbrance charged against it.

THIS IS WHERE THE REAL ESTATE PROFESSIONAL NEEDS TO DO THEIR DUE DILIGENCE TO DETERMINE IF ANY OF THOSE EXIST WHETHER THEY ARE REPRESENTING THE BUYER OR SELLER. THIS IS ALSO WHERE, WHEN REPRESENTING THE BUYER, THE REAL ESTATE PROFESSIONAL MUST KNOW WHAT QUESTIONS TO ASK THE SELLERS AGENT SUCH AS:

Is this a Distressed Property?
Has the short sale been approved by the lender?
Has the lender approved the purchase price?
Has an appraisal or BPO been done/ordered?

Here is something that may come as a surprise to many real estate agents: From my experience in dealing with many short sales for both buyers and sellers and doing research on them, most sellers are up to date on all of these items and are NOT SUBJECT TO ACT 137.

Nov 28, 2008 05:58 AM

Randy L. Prothero

eXp Realty - Hollister, MO

Missouri REALTOR, (808) 384-5645

I honestly have not seen many short sales that are not distressed (fall under Act 137). The lenders with most of the short sales I am running into will not do a short sale until they are distressed.

Most of my buyers are asking me not to show them short sales because they do not have the flexability to handle a potentially long closing.

Nov 28, 2008 06:52 AM

1SG (Ret.) David Kucic

Hawaii Military Realty, Inc. - Ewa Beach, HI

President and Owner

I have seen a few that fall under Act 137 but I advise my Buyers that those may be next to impossible since they very well could go into foreclosure before an offer gets accepted.

Again, it just takes some homework to figure this stuff out and know what questions to ask.

If your buyers ask you not to show them short sales then it only makes sense to not show them short sales.

As long as the Buyers are informed of facts about short sales, I leave it to them to make their decision as if to pursue them or not. I have one buyer now that wants nothing but a short sale and there are plenty out there for him that are not distressed properties. On the same token, I also have buyers that dont want to mess with short sales.....their decision.

I just recently closed a short sale. From the date of the offer being signed and submitted by the buyer, the closing took place 30 days later (Citi Mortgage). I have another one that will close within the next week. Sames story......30 days from acceptance of offer and it too will most likely close on time (Wells Fargo).

Nov 28, 2008 08:13 AM

Robin Rogers

Robin Rogers, Silverbridge Realty, San Antonio, Texas - San Antonio, TX

CRS, TRC, MRP - Real Estate Investment Adviser

You go, David! Best of luck with those short sales--I know your clients appreciate all your hard work to get them a good deal.

Aloha,

Robin

Dec 11, 2008 09:57 AM

1SG (Ret.) David Kucic

Hawaii Military Realty, Inc. - Ewa Beach, HI

President and Owner

Thank you Robin. As a veteran in the real estate industry I know that you understand short sales and the difficulty they present but the bottom line is that these people that are forced to do short sales need our help. I am happy to be there for them even when the going gets tough. Aloha! Do you miss Hawaii much these days?

Dec 11, 2008 10:06 AM

Robin Rogers

Robin Rogers, Silverbridge Realty, San Antonio, Texas - San Antonio, TX

CRS, TRC, MRP - Real Estate Investment Adviser

Hi, David:

I do miss Hawaii a lot, especially when the weather gets cold here! I miss the people, too, and the aloha spirit.

Happy holidays!

Robin

Dec 26, 2008 01:33 AM

Michael Hege

Beach Villa Realty,LLC - Kapolei, HI

Aloha David, We have adopted the policy in our office of having an outside DPC on any short sale that we act as the listing agent for. It works well for us as it places a 3rd party into the mix to consult with the seller and to determine what the best course of action is for the individual. If it is a short sale, then it also puts a lender negotiator into place to negotiate the actual short sale. It keeps us doing what we do best, marketing and selling homes and provides a seller with someone who is best prepared to negotiate the best deal they can on the short sale without the transaction itself taking too large a role in the negotiations. It also does a great deal to remove the potential of crossing the line from REALTOR to DPC.

Feb 19, 2009 12:52 PM

1SG (Ret.) David Kucic

Hawaii Military Realty, Inc. - Ewa Beach, HI

President and Owner

Aloha Michael! I have heard of others doing the same thing. I personally wont deal with DP but dont mind handling short sales. You are right about crossing the line to a DPC.....not a good situation.

Feb 20, 2009 03:56 AM