I remembered this from real estate class. Last week, I was vacationing in Kona and staying at a vacation rental condo. Construction seemed to be happening in several condos around us. Somehow the words “quiet enjoyment” just hung in my head as I had anything but! May is definitely not peak season in
Hawaii, so many owners use this time to upgrade. Quiet enjoyment is one of the rights that is given to the property owner and usually conveys to any lessee (renter).

Often the words used in legal documents are not very understandable. But how perfect can “Right of Quiet Enjoyment” be? I like to be able to sit on my lanai with my coffee and hear the rhythmic sound of the waves. I like to be able to talk on the phone without having loud sounds drown out my voice. But alas in reality, quiet enjoyment is subject to a lot of interpretation.

Having a neighbor hanging pictures (must have been 3 dozen!) on concrete walls is at best “torture” and certainly could never be considered “quiet enjoyment”. I wanted to go buy the stick-up hangers and hand to them! Our friends were in a different condo complex and had someone removing 2 layers of tile upstairs! They called the owner who was willing to discount their weekly rent based on the horrendous noise.

Whether you are a renter, vacationer or owner, you need to understand quiet enjoyment and take it seriously. Most condo associations have rules regarding what hours are appropriate for construction projects. Even the best rules do not say it will be quiet always.

Most court cases on quiet enjoyment tend to be from renters who are suing landlords for either harassment or for things that the landlord has limited control over such as noisy neighbors.

Here are a couple definitions I picked up off a real estate terms website.

• The right of a purchaser, or lessee, not to have his proper use and enjoyment
  fettered or substantially interrupted by any act of the vendor, or lessor, or
  any lawful act of someone rightfully claiming under or in trust for the vendor,
  or lessor.
• One of the covenants that by statutory implication a vendor undertakes to
  provide if he sells land as beneficial owner and for valuable
  consideration, i.e. he undertakes that “the subject matter shall remain to and
  be quietly entered upon … and enjoyed … without any lawful interruption or
  disturbance …” Law of Property Act 1925, s. 76, Second Schedule, Part I.

Make sure to review your homeowners or condo association rules thinking about the right of quiet enjoyment. Sometimes the HOA rules seem like they are overbearing but think about the worst case and you understand why they are in place. If they are good, just hope that they are enforceable! If they are not so good, make sure to disclose this to any renters or buy yourself some good earplugs!

Today I just selected a few of the great properties on caravan to go to. I currently don’t have any buyers in the $1.5 million range so I skipped all except the one where they were serving Komodo donuts! (I hear they are closing soon so go visit them TODAY!).

Certainly a BEST BUY is located at the Palms at Wailea 1, unit 405 (MLS 329109). It is a spacious (over 1000 square feet!) ground floor unit with 1 bedroom and 2 baths for just $649,000. It is a short sale, so it may be a complex purchase but so far there are no offers. It is currently in the Outrigger vacation rental program and I’ve requested rental history. It only has a peak of ocean view but is convenient to pools. It is a nice unit and great deal!

I’m not sure the agent had to bribe us with great donuts (including to-die-for cream puffs) but the home I’d most like to live in was in Kanani Wailea at 80 Po’alilani Place. (MLS 331189) It is a new development so the street doesn’t show on the map but it is off Kapilli Street. From the street, it appeared to be a small home. I don’t care for the narrow streets and limited parking in this gated community but I was blown away by the exceptional layout and beauty of this home.

It has several bedroom suites that all enter into a private garden courtyard. Although just 2,242 square feet on a small lot, it is very spacious and currently offers great ocean views. Some ocean view might be preserved even if there is further building, but there is no guarantee. 4 beds/4 baths, stunning home for just $1,938,000. As I look at comparable sales though, this unit is overpriced by several hundred thousand dollars.

Maui Meadows is a community on the mauka side of Pi’ilani highway right where Kihei meets Wailea. Minimum lot size is 1/2 an acre and many lots have wonderful ocean views so it is a popular place to live. You get a lot of variety in Maui Meadows, ranging from old to new, and pristine to barely liveable. (MLS 331062) The home I saw today was a bit dated had and an awkward layout but spacious room and beautiful ocean views. Located at 620 Kumulani Drive, it has very little curb appeal. You enter into what looks like a converted garage/family living area. From there is a doorway to the kitchen, and a side door to a very large spacious bathroom. The kitchen is spacious but the green/blue painted cupboards are “interesting”. The kitchen opens to a great room which in turn opens into the pool area. The pool is smallish and L-shaped, but has nice ocean views. All the rooms are spacious. The master suite has an old dated bathroom. If it were up to me, I’d upgrade the other large bedroom to integrate with the nice bathroom and make that the master suite. One area of the house was configured so that it could be used as an Ohana with small kitchen and separate entrance. Priced at $1,485,000. Virtual Tour

As a relatively new real estate agent, I’ve spent a lot of time observing the good, the bad and the ugly. As a professional in any field, you’re always looking to learn from the best and adopt their example. There are many good agents out there and you deserve to find a great one. There are also those who could end up costing you precious time and money if you don’t know what to look for. You need to know how to spot them and if necessary, cut your losses before you start throwing good money after bad.

If you’re looking for your first agent, here are some things you should watch out for. If you’re looking for a reason to fire the one you have, here are 10:

1. You agent is not listening to you. You say you need to sell your house in three months. Two months has gone by and there has only been one showing and no offers. Your agent keeps saying she thinks you can get this price if you just wait. Meanwhile, your holding costs are sucking you dry, or the moving van is here to take your belongings to the state you’re relocating to, where you can’t buy a new house until you’ve sold this one. Another example: You clearly tell her that you are painting a room and can’t have carpet cleaners come until after noon. She arranges for the carpet people to arrive at 8:00 a.m.
2. There are less than 10 photographs on the MLS. Statistics from NAR state that listings with less than 7 photos rarely get viewed. Think about it – 84% of potential buyers start their search for homes on the Web, where photos are key to generating interest. Do you really want to cater to the elite 16% who don’t look on the Internet?
3. The agent has not posted your property on the usual popular websites to get it in front of the 84% of buyers who will be looking for it there. In most cases, this is free and only takes minutes. If your agent relies only on print media, you better be talking “luxury” property, or again, only want to cater to the 16% of elites who shun the Internet (see previous point). If this is not the case, your agent is either not Internet-savvy, or just lazy.
4. The photos are out of focus, overexposed, crooked or shows the agent’s reflection in a mirror with a big blinding flash going off where his head should be. Then there are the ones made with an ultrawide-angle lens from the wrong angle and is so distorted you can’t tell if it is a bathroom or a recreation room! And let’s not leave out the “so-dark-I’ll-have-to-take-your-word-for it” photo. If you really love everything else about that Realtor and don’t want to fire her, insist that she get a professional to make the photographs. It will be worth every penny and a good Realtor will usually cover this cost.
5. The MLS listing has incomplete or incorrect information. Here in Hawaii, we are required to have the seller sign off on the MLS input form. Yes, there are cases where you may want to omit something from the listing, but if you don’t say you have a pool, how will people looking for a pool find your property? “As complete as possible” is the best rule of thumb. If it is easy to show, state that. If it has a lockbox, so much the better! Make sure to ask your agent which fields can be seen by everyone and which are only visible to agents.
6. The agent says anything disparaging about your property or family that you haven’t authorized them to say. A seasoned agent once advised me to not say anything I wouldn’t say if the client was standing right beside me. I’ve taken that to heart and used it as a guide on many occasions! Too many agents break this rule when talking to clients or other agents. When you interview agents, ask about past clients. If they start saying things that you wouldn’t want said about you, thank them find another agent.
7. The agent doesn’t do what they say they will. If they say that they’ll advertise in 3 magazines and they only advertise in 2, or if they say they’ll post the listing regularly on Craigslist and only do it once, or you have to complain constantly to remind them to, it’s time to find a new agent. If they say that they’ll hold open houses often and hold only 2… you get the idea.
8. Your property has been on the market for more than 60 days with only one showing and the agent hasn’t talked to you about a new strategy.
9. Your agent hasn’t asked the question, “Are you current with your mortgage payments?”. In these hard times, your agent can be your biggest advocate in knowing what steps to take to avoid foreclosure or bankruptcy. Whether you are current or not, don’t be offended by an agent who asks. A true professional will have a plan for you either way, and be mindful of your welfare throughout the process. An agent who doesn’t ask may proceed under the wrong assumption and end up putting you both in unfortunate circumstances.
10. For any reason at all, you find you don’t trust your agent to do their job and represent you and your property in the best light possible. If you’ve signed a listing agreement or a buyer’s agreement, you effectively have a employment agreement with this person. Regardless, most agents, if they’re professionals, will accept your stating that you don’t feel the arrangement is working out, and terminate the contract.

Last week at an Open House someone asked what a 3/2 meant. This is just common terminology for 3 bedrooms and 2 baths. Although a 3/2 is the most common type of home, there are lots of variations.

This week, I hit my own neighborhood of Ka’ono’ulu and Kenolio Estates in North Kihei. It is a very nice neighborhood that is an easy walk to Sugar Beach. Prices have dipped significantly here, making for some very good deals. Except where noted any of these home are in move-in-ready condition.

Reviewed Homes (View MLS Listings)

My BEST BUY of the week would have to be 693 Imahale St. which is listed at $525,000. It has only been on the market for 5 days and won’t last long. This 3/2 with only 1282 square feet was well laid out and felt spacious. A little color on the walls would make it feel more comfortable, but it was in good condition. You enter into a great room with living, dining area and kitchen with well-done laminate flooring (I did a double take because it looked and felt like real hardwood!). Kitchen has ceramic tile and is nice and open. Two small bedrooms are at the front of the house and the master is at the rear with sliding glass doors to the backyard. The bedrooms are small and the bathrooms are simple. The yard is large and simply landscaped. Lot size is 7559 sq ft which is why I made this a best buy over the next home. The home was built in 2002.

Another good buy is 132 Kawailani Circle listed at $505,000. This is the only one not in the estates but is in nearby the Pi’ilani 2 neighborhood and was built in 2001. The biggest drawback to this one is that it is close to the Pi’ilani highway. It doesn’t back directly up to the highway but a tip of the back wall does. Pi’ilani is a true highway with a good eal of noise. I live 2 blocks away and hear the traffic all day and night when our windows are open. This home is a little larger with 1256 sq ft but lot size is 5141 which makes for a small back yard and close neighbors! The seller is providing a credit to put in sound-insulating windows.

698 Alulike St. is a 3/2 home with 1318 sq ft and a large 8539 lot. The list price is $569,000. This one has the best curb appeal and would be a very livable family home. You enter into the great room with the large kitchen off the the right. The biggest drawback to this home is that there is no formal dining area although the kitchen has a large area for a table. Mature landscaping makes for nice outdoor living. The master suite features walk-in closets and a large bathroom with separate tub/shower which isn’t common in this price range.

133 Makalauna St. is a well maintained home. There is a nice front entrance into a compact living area. The kitchen has been fully redone and is adjacent to the living/dining area but does not have that “great room feel”. Bedrooms are small but the layout is nice. Nice backyard but it does back to a street that tends to have some traffic. This one has been on the market for a while.

As an investor, I often look at short sales as potential deals (depending on your exit strategy). 671 MaliMali is a short sale. It is a nice 3/2.5 home with a good sized 8111 sq ft. lot. The lot backs to open space which is designated as a road thoroughfare. Just behind this space is the Pi’ilani highway so I would guess you get significant highway noise. The house is in good condition but the yard needs a little more work. The list price is $539,000 which doesn’t make it much of a “deal” given than short sale processing can take up to 6 months.

All Homes on Caravan (View MLS Listings)

I also took a quick look at some vacation rental condos. The Kihei Holiday unit is one of the lowest priced 2 bedroom units available. The complex doesn’t offer lush surroundings but it is a nice unit with good ocean views (through electric wires) for just $439,000!

Another good buy is the large 1 bedroom at Koa Resort for $367,000. Koa Resort is one of my favorites because of its large spacious grounds and amenities.

If it is the world famous Maui views you are after, check out Menehune Shores 2/2 for $675,000. It on the 6th floor with really fabulous views. Good condition, great price for these views that would cost over a million in South Kihei!

To find out more about these or similar properties, contact me!

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Ka’ono’ulu in Hawaiian means “The Delicious Breadfruit” — three words in the right order! Once you learn a little Hawaiian, the names start making a little more sense. It’s helpful to try and break up a word into its individual parts. For example, the upcountry town where our local winery resides is Ulupalakua, which means Breadfruit (Ulu) ripens (Pala) on the back (Kua)!

This is the first of what I hope is a weekly blog highlighting some of the houses and condominiums that I see on caravan. A caravan or a broker’s tour is a weekly event where agents are invited to go from house to house in a certain area. It is a great way to see a lot of properties in a short period of time.

In Maui, we have caravans running in the different districts most weekdays, so you could spend most of your time on caravan if you wanted to. Just as an example, here is what our current caravan schedule looks like:

• Tuesday is South Maui and rotates each week between Wailea, South Maui and North Maui (including Ma’alaea).
• Wednesday is West Maui (covering Lahaina, Ka’anapali and Kapalua and rotating between North and South).
• Wednesday is also Central Maui every other week.
• Thursday is Upcountry and North Shore rotating between Kula, Haiku/Pa’ia, Makawao/Pukalani/Olinda.

On each caravan we normally have 10-20 properties and about 2 hours to tour them. Agents don’t always go to every property or in the planned sequence.

Why can understanding caravans benefit a buyer or seller?

• Agents who attend caravan regularly know their inventory! It is one thing to see an MLS listing and pictures. It is a totally different experience to experience a property. An agent who previews properties and knows the inventory will save you tons in time. When interviewing agents, ask them when they last attended a caravan. Many “experienced” agents never attend caravan but the top agents usually do!
• Ask your local agents about when caravans are held in your area. Although they are designed for agents only, they are usually “Open Houses” that are open to the public too. Here in Maui, you may be able to see places that are rarely available for regular opens due to having renters and bookings for vacations rentals. While this may not be as effective as having an agent set up a tour of homes, it may be good thing to consider if you are “just looking”. You can talk to the hosting agents and listen in on comments from other agents as they tour homes.
• Agents work to entice other agents to see their listings. Food and prizes are common. When you interview an agent, ask them about plans to put your property on caravan. For example, I had a listing last year in a condominium that most agents know well. Knowing that it would be tough to get people to see it, I offered a prize drawing and had 23 agents come through! Without the prize, I may have had 5. Of the showings that I had, about 75% were from the agents who saw it on caravan, and I sold the place in 77 days through one of those agents.

Aloha and happy caravan!

In this installment of our series, I offer some miscellaneous thoughts for your consideration:

• Many second-home buyers think that a vacation rental unit is the best way to go because they can make lots of income on nightly or weekly rents. The reality in the numbers is that it is often more cost effective and convenient to own a lower priced property and be able to call it yours.
• If you are moving to Hawaii to live, you should know that many people who move here only stay a year or two. It may be best to rent before you buy, or get into a lease option where you can buy if you decide to stay, or decline to buy if you decide to leave.
• If you are an investor looking for cashflow, Maui may not be the best place to look. Appreciation has been pretty good but based on typical properties, you need to put 40-50% down to have a chance of cashflow, which makes for a less than ideal cash-on-cash return. There are ways to cashflow but most opportunities are in residential properties with multiple rental units which are often non-conforming.
• Everyone wants a great ocean view! For a mid-range condo in Maui, you pay an average of $50K more for a limited ocean view, and panoramic views can be much higher. Properties with views often have higher occupancy rates and higher income and appreciation. But buyer beware! Make sure that view won’t be obstructed by growing trees or new construction. Many people prefer a quiet tropical garden setting that is near a beach!

Timeshare, Fractional, Fee Simple or Leasehold

In this third segment, we’ll look at some concepts that are more unique to Hawaii than most other places in the country.

Timeshares

With timeshares, you own 1-6 weeks per year in a particular unit, and have a right to use the property for that period of time. Many condominiums have a handful of timeshare units. Most timeshare management companies allow you to “exchange” these units for those in other vacation spots around the world.

I have owned a timeshare in Hawaii since 1983. In my opinion, it has been a great purchase that has allowed my family and me to enjoy many vacations here and other places without having to stay in expensive hotels. Maintenance costs in these units have gone up over the years, but not nearly as much as hotel rates. I like having a home away from home where I can store groceries and have my husband cook me a meal. (Ladies, cooking lessons as anniversary gifts can be the best investment you’ll ever make. Ask me how I know!)

I would not however, classify these as an “investments”. Yes, you can resell a timeshare, but don’t expect to make much money on it. In fact, if you buy one as the result of a typical high-pressure sales pitch, after signing on the bottom line, you may only be able to sell it for about half what you paid.

I would advise everyone to look into timeshare maintenance costs and resale values before buying, and weigh the costs against what you think you’ll be paying for vacations over several years. Keep in mind that if you do take vacations regularly, as I do, you may never want to sell it.

Fractional Ownership

This concept is fairly new to Maui, but many feel it will take off because of the transient nature of many homeowners. In a fractional ownership, you own up to 1/6th (2 months use) of a condo or residential home. It is an official deed and gives you rights very similar to full ownership.

Statistics show that the majority of second-home owners use those homes a total of about 7 weeks a year. Due to Hawaii’s remote location, people don’t typically fly in for a weekend, as they might in other areas of the country. Instead, they typically stay for one to two months at a time. This is an excellent option to consider if you fall into that category.

Fee Simple or Leasehold

The majority of the properties on Maui are now sold as fee simple. This is the traditional mode of ownership, where you own the land as well as the structure on it.

There are still properties that are leasehold. This goes back to the days of old Hawaii, where all the property was owned by the ali’i, the ruling or noble class families. With leasehold, you own the property but you lease the land. Leases are often 50 or 100 years. If the land owner decides not to renew the lease, you lose rights to your property. Most leasehold properties on Maui are right on the beach which is very attractive to buyers and vacationers. This may be a risky investment, but it can be a great one if you’re aware of the time lines of the lease and plan for it with respect to financing and other relevant concerns.

Condominiums – Short Term Rentals, Condo-tels

For the second installment in this series, we will explore the possibility of having short term rentals in a condo unit.

If you want to be able to rent your condo legally for a period less than 6 months, the property must allow for short-term or vacation rentals. Short-term rental properties can be rented out nightly, weekly or monthly. Rental occupants are charged transient taxes of 11.25%.

Units that don’t allow short-term rentals tend to have more owner-occupied units and show more pride of ownership. So, if you like getting to know your neighbors, you probably don’t want to choose a short term rental condominium. They can be rented out for a minimum of 6 months.

Many short term rental units have on-site staff. Some of these are known as “Condo-tels” and are operated like hotels, complete with receptionists, concierges and room service . When the owners are not using their units, they can leverage the marketing and management done by a property management group to rent and maintain the condo unit as it would any other hotel room. People sometimes face challenges with financing on condo-tels, but most reputable Hawaii-based mortgage brokers are skilled at handling these details. Property tax rates on condo-tels are also higher. It is important to remember that there are several condominium complexes that allow short-term rentals but are not classified as condotels; check zoning and condo association regulations to be sure.

I haven’t met a single visitor to Maui who doesn’t dream of owning a home here at some point. Who can blame them? Our lovely beaches, lush flora, cool trade winds and abundant sunshine are enough to make anyone want a vacation to last forever.

There are ways this dream can become a reality. This is the first in an ongoing series called Options in Paradise, where I will offer things to consider when buying your island home in small, digestible segments to ponder over a mai tai.

Condominium vs. Single Family Residence

• Condominium
• Pros:
• Don’t have to do yardwork, as much of the maintenance handled.
• Some condos have as much living space as a single family home.
• Amenities such as pools, workout rooms, etc.
• Locations are often close to shopping areas and beaches.
• Cons:
• Close proximity to neighbors.
• Maintenance costs.
• Rules and regulations
• Often limited outdoor living space.
• Some older condo’s have special assessment costs to cover items such as roof replacement and elevator upgrades.
• Single Family Residence
• Pros:
• More flexibility in features.
• Ability to make change and upgrades easily.
• More outdoor living space.
• In Hawaii, many residential homes have attached or detached Ohana units (extra space for guests, offices, rental units, etc.)
• Cons:
• Responsible all maintenance and yardwork.

Future related blogs will compare short-term (vacation) rentals to long-term condominium living, discuss timeshares, fractional ownership and compare fee-simple to leasehold properties. Don’t let the beauty of Hawaii allure you without having the knowledge to make great decisions.

There’s a lot of buzz going around these days where the words “short sale” and “foreclosure” are being tossed around, but I’ve noticed a disturbing trend in some of the people I talk to who are confused about these terms. Many don’t really know what they mean, or worse, they think they’re the same thing. Given the state of the economy today, this is worth a little clarification.

Simply put, a short sale is when a lender will accept less than the amount owed on a mortgage when a property is sold. Why would they do this? The truth is banks are in the money business, not the real estate business. If it can be shown that they will end up with a piece of real estate falling into their laps if they don’t take steps to allow its sale, they’ll most likely do it and cut their losses.

If for whatever reason the value of the property is less than what is owed at the moment a homeowner needs to sell it, a short sale is the most likely strategy. When this happens, the homeowner ends up getting nothing from the sale except the opportunity to preserve their credit and a perhaps little pride.

Homeowners end up in this situation in a variety of ways. A common scenario is one where they default on a mortgage and end up owing back payments, late fees, property inspection fees, attorney fees and so on, quickly eating up whatever equity they might have had on the property.

If they are unable to bring the account current, the lender will have no choice but to foreclose, which is a process by which they repossess the property due to the lender’s inability to comply with their agreement. At that point, the lender will most likely try to sell the property at an auction to recoup their losses.

As sad as this scenario can be, it presents some great opportunities for investors who are trained in executing short sales or transactions at the pre-foreclosure or foreclosure phases. There are also opportunities for Realtors® who are trained in dealing with bankruptcy specialists and loan mitigation representatives. Lenders will often prefer to work with real estate professionals in negotiating short sales for clients. Short sales expert Will Weaver of Royal Oak, Mich., explains why:

1. They’re licensed by the state.
2. They adhere to a code of ethics.
3. They carry errors and omissions insurance.
4. They have too much at stake to cut corners. As licensed professionals, they aren’t likely to commit fraud that could put their entire careers at risk.