Category: Real Estate

Mistakes To Avoid When Selling Your Maui Home

selling home Maui
It’s exciting to put a house on the market and to think about making new memories in new spaces, but we can have deep sentimental attachments to the homes we’re leaving behind, too. Growing emotions can help or hinder a sale, depending on how we manage them.

Homeowners need to know what it takes to avoid costly mistakes. Being mindful of these things and prepared for the process can help you avoid some of the most common mishaps when selling your house.

1. Overpricing

When inventory is low, like it is in the current market, it’s common to think buyers will pay whatever we ask for when we price our home. Don’t forget that the buyer’s bank will send an appraisal to determine the fair value for your Maui home. The bank will not lend more than what the house is worth, so be mindful that you might need to renegotiate the price after the appraisal. A real estate professional will help you to set the true value of your home.

2. Getting Emotional

Today, most homeowners have been living in their houses for an average of 10 years. This is several years longer than what used to be the norm, since many homeowners have been recouping from negative equity situations over the past 10 years. The side effect, however, is when you live for so long in one place, you may get even more emotionally attached to your space. If it’s the first home you bought after you got married or the house where your children grew up, it very likely means something extra special to you. Every room has memories and it’s hard to detach from the sentimental value.

For some homeowners, that makes it even harder to negotiate, separating the emotional value of the home from the fair market price. That’s why you need a real estate professional to help you with the negotiations in the process.

3. Not Staging

We’re generally quite proud of our décor and how we’ve customized our houses, but not all buyers will feel the same way about your design. That’s why it’s so important to make sure you stage your Maui home with the buyer in mind. Buyers want to envision themselves in the space, so it truly feels like their own. They need to see themselves in the space with their furniture and keepsakes – not your pictures and decorations. Stage and declutter your home so they can visualize their own dreams as they walk through your house. A real estate professional can help you with tips to get your home ready to stage and sell.

Today’s seller’s market might be your best chance to make a move. If you’re considering selling your Maui house, sit down with a local real estate professional to help you navigate through the process while avoiding common seller mistakes.

Likely (and Unlikely) Features in New Homes

Home builders make a lot of decisions about how to run their businesses every day. Among their most critical determinations is what features to include in the homes they build. Experience, region, trends, target audience, and many other factors play a role in a decision that directly affects their bottom line. In order to provide our members with actionable research, NAHB conducts a nationwide survey annually to find out the most likely (and unlikely) features builders will include in the typical home they build during the upcoming year.

The graph below shows the features builders are most likely to include in their homes in 2020. At the very top, with average ratings of 4.8 or 4.9 are a walk-in closet in the master bedroom, low-e windows, and a laundry room (on a scale from 1 to 5, where 1 means not at all likely and 5 means very likely). Also likely to show up in homes this year are energy-efficient features: efficient lighting, programmable thermostat, and Energy Star appliances and windows. Kitchens most likely will have a central island, a walk-in pantry, and granite countertops.
Maui real estate
On the other hand, there are features builders are rather unlikely to include with the price of the home. Heading this list are cork flooring for the living areas of the main floor, geothermal heat pumps, solar systems, and dual toilets in the master bath. Also unlikely are specialty rooms like a sunroom or a media room as well as two-story family rooms or foyers.
Maui real estate

Source: NAHB

What To Spend Money On When Building A Home In Maui

Maui home construction
Building a dream home in Maui from the ground up is one of the most exciting things that you can do, but you need to be sure you’re investing your money in the right places.

With a little bit of planning and research, your new home will be the perfect blend of form and function. Here are some of the best areas to invest the most money in:

HVAC System

Your HVAC system could be responsible for most of your energy usage, which is why it’s crucial that you invest in an efficient system. Once you have the exact dimensions of the space, speak with an HVAC contractor about the size of the unit you’re going to need and where all of the vents should be placed. An HVAC contractor will also be able to help you come up with a plan for where your ducts are going to be installed in the attic.

Roof

Your roof will protect your home from the elements, and you should never go with a second-rate company or shoddy materials. Luckily, installing a roof is a relatively straightforward project. With the proper maintenance, your new roof should last well over 40 years.

Appliances

No one wants to move into their new home only to realize that all of the appliances are hard to use or inefficient. When you’re conceptualizing each room, you might want to spend a little extra time figuring out where the appliances are going to be placed. After you have those dimensions, you can then take a look at some of the leading manufacturers, read reviews and even ask for recommendations from friends.

Insulation

Even though your insulation will most likely need to be replaced at some point in the future, you should still consider going with high-quality materials. The insulation in your new home is going to have a huge impact on your monthly energy bills, as well as your family’s comfort, and purchasing the right materials will be a wise investment. In addition to traditional batts and rolls, you might also want to take a look at high-efficiency blow-in cellulose insulation.

When building a custom home in Maui, you must also make sure you have an excellent insurance policy. Without the proper coverage, a single accident or mishap could end up ruining your finances for years to come.
Source: Meghan Belnap

How Much Do You Need To Make To Live In The 15 Largest U.S. Cities?

Maui real estate
Home values vary considerably across the country, and that means aspiring buyers will need more—or less—money depending on where they’re putting down roots. For example, the median home value in San Francisco is nearly $1.2 million, compared to $170,000 in Philadelphia.

Researchers with SmartAsset, a personal finance website, sought to find out how much consumers need in order to afford home payments in different areas of the country. They analyzed data for the 15 largest U.S. cities, factoring in five major metrics: median home value, property tax rate, down payment, homeowners insurance, and other monthly debt payments.

Maui home buying

Source: SmartAsset

Reasons To Use A Real Estate Agent To Sell Your Maui Home

Maui real estate
People often try to sell their home on their own (FSBO…For Sale By Owner). While this may certainly work for some, there are several things you should consider before you list your home yourself. Real estate agents perform many important services and often times deliver better results than a home seller could achieve on their own.

Advertising

According to NAR (National Association of Realtors), here’s where buyers found the homes they actually purchased:

  • 55% on the Internet
  • 28% from a Real Estate Agent
  • 10% Other
  • 6% from a Yard Sign
  • 1% from Newspapers

The days of selling your house by putting up a sign in your yard or placing an ad in the paper are long gone. Having a strong internet marketing strategy is crucial.

Negotiating

Here’s a list of some of the people with whom you must be prepared to negotiate if you decide to FSBO:

  • The buyer, who wants the best deal possible
  • The buyer’s agent, who solely represents the best interest of the buyer
  • The buyer’s attorney (in some parts of the country)
  • The home inspection companies, which work for the buyer and will almost always find some problems with the house
  • The appraiser, if there is a question of value

Paperwork

The paperwork involved in buying or selling a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.

Sales Price

Many homeowners believe they’ll save the real estate commission by selling on their own, but the seller and buyer can’t both save the commission. A report by Zillow revealed that FSBOs are inclined to do so because they believe it will save money, but they don’t actually save anything, and eventually end up listing with an agent. The same report revealed that, “While 36% of sellers that (at first) attempted to sell their homes on their own, only 11 percent of sellers—in other words, less than a third…actually sold without an agent.”

Questions to Ask Before Buying a Fixer-Upper in Maui

Maui fixer upper
The last thing you want to do is purchase a home that ends up costing you more to fix than you calculated for. So before you spend a lot of your time and money on a fixer-upper, you need to know the questions to ask first.

Is the Investment Worth It?

Deciding on whether to purchase a fixer-upper is a big deal. You need to make sure that it’s an investment you’re willing to commit to. If you have a contractor, they’ll make you aware of the state of the home, and also give you a rough estimate of the total costs of fixing the house.

Even when you have a trusted contractor, it’s essential to have a professional home inspector look over the property. A home inspector is trained to find problems that a contractor might otherwise overlook, discovering what is often referred to as “inspection deal breakers.”

Do You Have the Time to Invest?

This is a project that’s going to take up a ton of your time. Whether you have any help or not, at the end of the day, it’s going to be your home. That means you’ll be in charge of that home day in and day out.

If anything goes wrong and there’s an accident that occurs in the home, you’ll be the only one responsible for dealing with that situation. So if you’re serious about buying fixer-uppers, you need to learn how to manage your time. Additionally, if you’re not looking to hire a contractor, you will need more time to spare.

Do You Have the Money to Invest?

You need to be 100-percent sure that you have the money, or be willing to obtain the necessary funds to purchase the home and have it fixed. Like most fixer-uppers, you can never perfectly calculate the final costs, so be ready to pay a little more if things don’t go as planned. One of the most significant mistakes is not realizing there’s a difference between a fixer-upper and a rehab home. When you don’t understand this distinction, your budget can get shot very quickly.

If you’re getting a loan, you need to make sure you know exactly what you’re signing up for. A mortgage is a serious commitment of your trust and fiscal responsibility. If you have bad credit, a loan will probably be a bad idea for you. It’s advisable to get your financial house in order before committing to more debt.

Is the Home in a Good Area?

One of the biggest mistakes both investors and traditional homebuyers make all the time is discounting the importance of location. Agents constantly talk about how critical the location is in the grand scheme of things. It’s vital for your home to be in an excellent area. The location of your home helps determine how much your home appreciates over time.

Even the type of road a house sits on affects the price. The difference in value from a home located on a busy street versus a quiet neighborhood can be night and day. Great schools and public transportation are just some of the things you need to look at when purchasing a fixer-upper home.

Make sure to get a feel for how appreciation has been over the last decade. Is it keeping up with other surrounding areas? Consult with your buyer’s agent to get their opinion of how the appreciation will be before moving forward.

If you’re looking to start buying fixer-uppers, you have to able to spend a ton of time doing your research first. Additionally, as a beginner, you can make many mistakes, and it happens to a lot of people at some point. Don’t let your fixer-upper become a rehab money pit!

When a House Becomes a Home

Maui real estate
We talk a lot about why it makes financial sense to buy a home in Maui, but more often than not we’re drawn to the emotional reasons for homeownership.

No matter the size or shape of a living space, the feeling of a home means different things to different people. Whether it’s a certain scent or a favorite chair, the feel-good connections to our own homes are typically more important to us than the financial ones. Here are some of the reasons why

Stability to start and raise a family

From the best neighborhoods to the top school districts, even those without children at the time of purchase may have this in the back of their minds as a major reason for choosing the location of the home they purchase.

There’s no place like home

Owning your own home offers not only safety and security, but also a comfortable place where you can simply relax and kick-back after a long day. Sometimes, that’s just what we need to feel re-charged and truly content.

More space for you and your family

Whether your family is expanding, an older family member is moving in, or you need to have a large backyard for your pets, you can take all this into consideration when buying your dream home, so the space truly works for you.

Control over renovations, updates, and style

Looking to actually try one of those complicated wall treatments you saw on Pinterest? Tired of paying an additional pet deposit for your apartment building? Maybe you want to finally adopt that fur-baby puppy or kitten you’ve been hoping for. Who’s to say you can’t do all of these things in your own home?

States With the Largest Home Equity Gains

Maui home value
National home equity in the third quarter of 2019 rose 5.1% year over year, reaching an average of $5,300 per homeowner, according to CoreLogic’s Home Equity Report. States that saw the largest equity gains are Idaho (where homeowners saw an average increase of $25,800), Wyoming ($24,000), Utah ($21,000), and Montana ($17,800).

Maui home equity

Meanwhile, the number of homes with negative equity, meaning the owners owe more on their mortgage than their property is worth, dropped by 4% to 2 million—or 3.7% of all properties with a mortgage. “Ten years ago, during the depths of the Great Recession, more than 11 million homeowners had negative equity, or 25% of mortgaged homes,” says Frank Nothaft, CoreLogic’s chief economist. “After more than eight years of rising home prices and employment growth, [the number of] underwater owners has been slashed.”

Source: “Homeowner Equity Report,” (December 2019) CoreLogic

Home Prices Could Increase 5.4% by October 2020

Maui home values
Home prices grew by 3.5 percent year-over-year in October and are expected to rise by 5.4 percent by the same time next year, according to a CoreLogic Home Price Index and Forecast report. Between September and October 2019, home prices grew by 0.5 percent.

Nationwide, home values have been growing steadily since 2012 and the recovery period that followed the recession. February 2016 saw peak year-over-year growth at 4.2 percent. But now, CoreLogic’s economists predict new peaks for the coming year.

While low mortgage rates and a strong job market increase Americans’ homebuying ability and therefore competition for homes, some parts of the country are not reaping in the prosperity at equal rates. Thirty-five of the country’s 100 largest cities currently have an overvalued housing market while the Northeast division comprising New York, New Jersey and White Plains saw housing values fall by 1 percent over the last year.

“Local home-price growth can deviate widely from the change in our U.S. index,” said Dr. Frank Nothaft, chief economist at CoreLogic. “While we saw prices up 3.5 percent nationally last year, home prices also declined in 22 metropolitan areas. Price softness occurred in some high-cost urban areas and in metros with weak employment growth during the past year.” That said, the numbers show that the overall American housing market is looking fairly strong — and buyer sentiment is also changing to reflect its current conditions.

Should You Rent Or Own If You’re Retired?

Maui real estate
For many of us, the decision to rent or buy is dictated by our income. But for retirees, who are typically on a fixed income, deciding between renting and buying isn’t such a simple calculation. Retirees may choose to relocate for a variety of reasons, including downsizing, being closer to family, or to enjoy a warmer climate. But no matter what your motivation for moving, you may be wondering if renting or buying a home in is the smart choice. If you find yourself in a similar dilemma, ask yourself the following questions.

How stable is your income?

When you’re on a fixed income, it greatly helps to have fixed housing costs. That’s why taking out a mortgage might make sense for retirees. Having to worry about rising rent costs when you’re on a fixed budget can be stressful; owning your home means you have one flat payment every month that is also building equity for the future.

However, in some markets, renting may be a good financial decision. The overall cost of renting may be cheaper than buying—when you leave equity out of the equation.

It’s also much cheaper to move from one rental property to another than it is to sell a house because you don’t have to worry about closing costs, homeowners insurance, a large down payment, etc.

Can you afford routine maintenance?

One major concern for retirees to consider is the upkeep and maintenance that inevitably comes with owning a home. Cutting the grass, painting, and other home maintenance tasks are a hassle for anyone, but even moreso for retirees. Of course, these projects can be outsourced, but that costs money. And major home repairs—like a new roof, plumbing, or HVAC—can run to several thousands of dollars.

Do you qualify for a mortgage?

If you decide to downsize your home or move to another location, you may need to obtain a mortgage on your new home. Before 2008, it seemed like you could get by with a large down payment and good credit history to obtain financing. Today, one of the more important factors is income, so the money you might be receiving from Social Security or your pension must be sufficient to qualify you for the mortgage on the property you want to acquire.