Jack's Real Estate Questions

[Jack Hawksmoor]

What exactly, in your opinion, is a realtor? Is he like a car salesman but sells homes instead?

Who pays the realtor?

Is the realtor self employed so that he may buy the home and than turn around and sell them?

Prudential, is that a board of realtors or a company that hires them and sends them out?

Does the State of Hawaii by law require a realtor to be involved in the transaction between the two parties or just be present at closing?

Have you ever been insulted by a real estate agent? My pride bruises easily. :p


I like to do things by myself if it can save me money. You know, since when does anyone call a car dealer and tell him your selling your car (paid in full) on craigslist. It is none of his damned business.

[glossyp]

Selling your house or buying one is not comparable to selling/buying a car. The legal ramifications in this modern sue-happy world make real estate transactions potential minefields for the uninitiated. (BTW, I am not a real estate agent.) In a former lifetime I did work as a real estate appraiser so I have had enough contact with real estate agents to know that there are good ones and bad ones, just like in anything else. The profession does seem to attract more than its fair share of shark-type personalities - though it could be argued that the profession makes them this way. I tend to believe that those who go into real estate already have a predisposition - kind of like only those prone to self importance and power hunger become politicians.

Who pays the real estate agent? It depends, but generally it is the seller and that means the agent has a fiduciary responsibility to the seller, not the buyer. Many people don't realize this and it can lead to misunderstandings. If I were buying real estate, I'd hire my own agent and pay them directly to ensure I was represented. If I was selling, I'd list with an agent to maximize exposure and save myself countless hours of time and reams of paperwork that are now required by law.

And, FYI, the word "Realtor" is a trademark of the National Association of Realtors (http://www.realtor.org/)and only members of the NAR can legitimately call themselves a Realtor.

[Jack Hawksmoor]

Thankyou, i don't know what happened but when i tried to post my topic it kept disappearing and the message board kept telling me i was logged out and couldn't edit my post.

I will go back to doing my research because i think i am confusing a realtor with a real estate agent.:confused:

[Leo Lakio]

I see this thread, and all I can think is: in ANY line of work, you will find unscrupulous practitioners, and you will find those who are dedicated to doing the best job they can for their clients - same with car salespeople, attorneys, educators, journalists or mental-health workers.

[anapuni808]

I spent a few years working for a real estate investment firm. All "Realtors" are real estate agents. However, all "Real Estate Agents" are not realtors. There are 2 kinds of agents: Brokers and sales persons. A sales person can advance to Broker level with more education and experience. All persons designated as "sales persons" must be supervised by a Broker. and that pretty much exhausts my knowledge of real estate :D

If you are buying property, you should definitely have your own agent with no ties to the seller. Your own agent will be concerned with making the sale so they get a commission. The seller's agent also wants to make a sale but because most commissions are percentage based, the seller's agent is motivated to negotiate a higher sales price so their commission is larger.

Good luck!

[tutusue]

[...]Who pays the real estate agent? It depends, but generally it is the seller and that means the agent has a fiduciary responsibility to the seller, not the buyer. Many people don't realize this and it can lead to misunderstandings. If I were buying real estate, I'd hire my own agent and pay them directly to ensure I was represented. If I was selling, I'd list with an agent to maximize exposure and save myself countless hours of time and reams of paperwork that are now required by law.
Yes, the seller pays the commission to the seller's real estate company (unless it's stated otherwise in the listing). However, the buyer need not pay his/her agent directly as the sales commission is split between the sellers and buyers agents. I'm not really sure if a buyer paying his/her own agent directly is even legal. Someone please correct me if I'm wrong. I believe the standard is still 6% commission based on the selling price with 3% going to each of the real estate companies involved (again, unless it's stated otherwise in the listing). If an agent doesn't own his/her own company then each company has an agreement on how that 3% will be split between the company and the agent.

What should be avoided is both seller and buyer using the same agent during a transaction for the reason mentioned above...fiduciary responsibility. The listing agent's responsibility is to the seller.

There was a time when one could fairly safely sell his/her own home. I did it decades ago. It's still legal to do that but, if something goes awry, the ramifications are huge. This is not a transaction one should try to cut corners on.

For disclosure purposes, I had my RE license from the late 70s to early 90s and used it for personal transactions when I was flipping homes. I also helped 2 friends with their sales. I really disliked RE sales as a business and let my license expire.

There are many reputable agents around and, no, I don't classify them the same as car sales people!!!

[glossyp]

Yes, the seller pays the commission to the seller's real estate company (unless it's stated otherwise in the listing). However, the buyer need not pay his/her agent directly as the sales commission is split between the sellers and buyers agents.
In this case the commission is being paid by the seller so the agents for both buyer and seller have a fiduciary responsibility to the seller. I'm not really sure if a buyer paying his/her own agent directly is even legal. I'm not sure of the legality here, but in most jurisdications, including California, it is perfectly legal for a buyer to hire an agent to represent them; in this case the buyer's agent receives no commission from the seller which removes the fiduciary responsiblity to the seller, seller's agent and selling agency.

[tutusue]

In this case the commission is being paid by the seller so the agents for both buyer and seller have a fiduciary responsibility to the seller.
This subject is interesting enough to me that I've emailed a broker friend of mine for clarification. She's not always good about responding but if she does I'll report her insight here!!!
I'm not sure of the legality here, but in most jurisdications, including California, it is perfectly legal for a buyer to hire an agent to represent them; in this case the buyer's agent receives no commission from the seller which removes the fiduciary responsiblity to the seller, seller's agent and selling agency.
So, using Calif. as an example, when the buyer's agent receives no commission via the seller, does the seller's agent still expect a 6% commission upon sale or is negotiating the percentage common practice now?

[oceanpacific]

Seller's agent will often specify that they will share commission with buyer's agent.

[kamuelakea]

Realtors work only for closing the deal. They don't really work for either party. While the 6% might come out of the seller's escrow account, we all pay for it by simply adding to the cost of home ownership.

Realtors are at a crossroads. They probably won't go the way of the typewriter repairman but they are going to change drastically. I don't need a realtor or a real estate agent of any kind when I buy or sell property. I can get all the information I need from the internet. I do need a real estate attorney to advise me regarding the contract. Interestingly there aren't a lot of attorneys specializing in this type of service. They tend to try to charge the same 3% of the sales price as opposed to a reasonable hourly fee based upon time spent. I think there is a niche for attorneys out there in the near future.

The only reason the real estate profession was able to exist for so long with the 6% fee was their control of the MLS system. That is slowly breaking down and with that, they are toast.

Don't get me wrong, a good salesman is always worth their fee and I'm sure many a real estate agent has got their client far more than the 6% fee but the system has been and continues to be based upon an inefficient monopoly. But it's days are numbers.

[oceanpacific]

In this state, a licensed attorney is deemed to be qualified to handle real estate transactions.

[tutusue]

This subject is interesting enough to me that I've emailed a broker friend of mine for clarification. She's not always good about responding but if she does I'll report her insight here!!![...]
Insight report! This is from a broker who I've known for years and years:
There is a somewhat new thing called being a "Buyer's Agent". You have a Buyer-to-be sign a contract saying they will buy only thru you and you will look for things for them and then you are paid thru the Seller's commission (as usual). This protects the Realtor from working, showing, negotiating, etc. and then have a Buyer walk into an Open House and get emotionally involved and buy on the spot from the sitting Realtor. Or going to a For Sale By Owner and buying directly after you have spent time, effort, gas and tires showing him and educating him on the market. In either case he owes you a commission!
The newest Realtors' code of ethics requires us to treat all parties honestly (it used to say 'fairly' but that was hard to pin down). In our transaction, my fiduciary duty was solely to <buyer - name removed> but I could not take advantage of <seller's agent - name removed> nor her client, the Seller.
The really hard thing to do these days is "dual agency", representing both parties. There are addenda to fill out, etc. PRIOR to both the listing and the sale. There are law suits everywhere over this. Some Buyers will work only with the listing agent which is fine but it can trigger problems.
The business changes every day.

[Jack Hawksmoor]

Realtors work only for closing the deal. They don't really work for either party. While the 6% might come out of the seller's escrow account, we all pay for it by simply adding to the cost of home ownership.

So it is safe to say, that Realtors get thier 6% commision after completing escrow, closing. Do they have a flat rate?

What happens if they fail, what are the consequences? Say one of the parties violates a clause making the agreement void. Does the seller and buyer still have to pay that 6% to the Realtors? Or do they keep trying again and again to seal the deal?

[Jack Hawksmoor]

Selling your house or buying one is not comparable to selling/buying a car. The legal ramifications in this modern sue-happy world make real estate transactions potential minefields for the uninitiated. (BTW, I am not a real estate agent.) In a former lifetime I did work as a real estate appraiser so I have had enough contact with real estate agents to know that there are good ones and bad ones, just like in anything else. The profession does seem to attract more than its fair share of shark-type personalities - though it could be argued that the profession makes them this way. I tend to believe that those who go into real estate already have a predisposition - kind of like only those prone to self importance and power hunger become politicians.

Who pays the real estate agent? It depends, but generally it is the seller and that means the agent has a fiduciary responsibility to the seller, not the buyer. Many people don't realize this and it can lead to misunderstandings. If I were buying real estate, I'd hire my own agent and pay them directly to ensure I was represented. If I was selling, I'd list with an agent to maximize exposure and save myself countless hours of time and reams of paperwork that are now required by law.

And, FYI, the word "Realtor" is a trademark of the National Association of Realtors (http://www.realtor.org/)and only members of the NAR can legitimately call themselves a Realtor.

How much do Real Estate Appraisers charge?

Who pays the appraiser?

Do you have to sell a house for what an appraiser tells you to?

Your quote stuck out to me:

The legal ramifications in this modern sue-happy world make real estate transactions potential minefields for the uninitiated.

I heed your warning and rather not be locked in.

So it can say in the Purchase Agreement under ATTORNEY'S FEES: If someone screws up, and this goes to court, the loser pays court costs etc. Since you are not locked in, you cannot be accused of default. Like so:

ATTORNEY'S FEES: Any signatory to this agreement who is the prevailing party in any legal proceeding against any other signatory brought under or in relation to this agreement shall be entitled to recover court costs and reasonable attorney's fees from the non-prevailing party.

[Jack Hawksmoor]

http://en.wikipedia.org/wiki/Mortgage_broker

A mortgage broker acts as an intermediary who sources mortgage loans on behalf of individuals or businesses.


http://finance.yahoo.com/loans/article/103075/mortage-brokers-friends-or-foes

Mortgage Brokers: Friends or Foes?
by James R. Hagerty

"The mortgage broker does not represent the borrower," says Chris Holbert, president of the Colorado Mortgage Lenders Association. "We sell access to money." The industry group recently opposed language in Colorado legislation that would have required mortgage brokers to act "primarily for the benefit of the borrower." That provision was later deleted.

http://www.dontriskyourhome.com/whatis_predlend.htm

Predatory lending is actually a variety of harmful practices that are designed to take advantage of a consumer's inexperience or lack of sophistication to manipulate a borrower into paying more for their loan than they need to. We are most concerned with residential real-estate transactions.

In the real-estate world, predatory lending is terrible lending practice designed to take away your home equity. If you agree to a loan based on the equity you have in your home, you could easily be putting your home at risk. Through false promises and outrageous fees, predatory lending can ruin your credit and lead to foreclosure. Homeowners-especially the elderly, minorities, those with low income or damaged credit-should be extra careful when choosing their loans. These borrowers are often targeted with abusive and exploitative practices. Home financing is a complicated world of tough language and difficult-to-understand practices. Don't risk your home-be careful.

Does anyone here, on these threads, can please give me a simple definition of a mortgage broker?

What do you guys know about these guys? Have any of you dealt with them before?

I can't seem to understand what i dug up and need someone to translate it for me?:(

Pretty please.:p

[tutusue]

I don't have time to peruse this thread (http://www.hawaiithreads.com/showthread.php?t=13650) but it might be worthwhile taking a look at it.

[kamuelakea]

How much do Real Estate Appraisers charge?

Who pays the appraiser?

Do you have to sell a house for what an appraiser tells you to?

Your quote stuck out to me:[/B]

For the most part, appraisers also work to get the deal closed. Its not as much of a slam dunk as the realtors but enough that you should assume their opinion is worthless unless they are your brother or working directly for you and your agent and everybody knows it.

Here's an example of a home supposedly "appraised" for 2.2 Million but is for sale for 1.4 Million. Now either the seller is a fool or the appraiser was a fool or both. But since the appraiser is supposedly a trained professional, I put the responsibility to be accurate on him or her.

http://phoenix.craigslist.org/rfs/500683178.html

The whole real estate industry is full of crap right now. Beware. Never trust any of them. Get second opinions. Pay an attorney 300/hour to review everything you sign. Pay an appraiser on your own to get the appraisal. Best 600 you ever spent.

[tutusue]

It sounds like you had a terrible experience in the past, Kam.

[Jack Hawksmoor]

I don't have time to peruse this thread (http://www.hawaiithreads.com/showthread.php?t=13650) but it might be worthwhile taking a look at it.

Thankyou, i will look at the Mortgage Mayhem Thread.

[kamuelakea]

It sounds like you had a terrible experience in the past, Kam.

Not at all. Had some close calls though. In fact, I have had good experiences with agents, bankers and appraisers. But they were friends or friends of friends (typical Hawaii) but I still viewed them as adversaries.

[glossyp]

Appraisers (in the long ago time when I worked as one) were generally paid by the seller as part of the closing costs for a loan. In those days the banks used the appraised value as the basis for the loan. In other words, you could not borrow more than the house was appraised for and at that time you better have at least 20% of the appraised value as a down payment. So, if a house appraised for less than the selling price, you as the buyer either had to make up the difference or, if your agent was smart (and I never saw a deal where they agent had not specified what follows), they had written the contract so that if the property did not appraise for the sales price, you could back out of the deal without penalty. If you were a legitimate appraiser certified by the bank and licensed, you based the value upon a number of factors including recent sales of comparable properties, the condition of the property and other quantifiable values.

[glossyp]

In case there is anyone looking for more info about buyer's agents, here is a good resource. There is a national association known as NAEBA (http://www.naeba.org/index.htm) (National Association of Exclusive Buyer Agent) which has extensive information.

FYI, according to the code of ethics, a couple of points:
"2.01 An exclusive buyer's agent shall be employed by a client as evidenced by a written agreement which specifically states the services to be provided, the service fee structure, the method of payment for services, and the beginning and ending date of the agreement."
AND
"2.03 An exclusive buyer's agent shall account to his principal by disclosing any referral income that might be received through referring that client to a listing agent."

[timkona]

Speaking as an appraiser, I don't care about the deal itself because I charge a fee rather than a commission. I prefer to not know the contract price until the last minute, then put it into my appraisal in the appropriate slot. That way my analysis is not skewed by the contract price.

And speaking as somebody who knows a good deal about real estate, whenever I buy or sell property, I LOVE LOVE LOVE it when I find buyers or sellers, who are not licensed agents or attorneys, and who honestly believe that they can handle the deal themselves using what they learned on the internet, or in some seminar. Yup, those folks are my favorites. LOL :cool:

[kamuelakea]

Yup, those folks are my favorites. LOL :cool:

Hows the real estate going up 10% per year until 2016 going???? I'm sure your appraisals just get the automatic 10% per year inflation but it doesn't seem like the rest of the market is doing that anymore??????

[timkona]

Oh Kam...you are by far my favorite "wanna-be" liberal. You try desperately to mask your conservative attitude due to the political incorrectness of said attitude.

If you take the 10% number, and start from 2001, which is about where I start from, then you can easily see that the return is realistic up until right now, in spite of the fact that prices have easily dropped by 5% at the lowest price ranges, in the last year. Funny how price drop is lowest at the lowest price ranges. But don't let that simple fact skew your dogma.

I betcha that liberal protest does not slow down. I betcha that the number of babies being born here continues to outstrip the number of old folks moving in. And I betcha that it's good to be a slumlord.

Realism, courtesy of liberalism. Gotta love the liberals in Hawaii.

Damn the logic, full ignorance ahead.

[kamuelakea]

If you take the 10% number, and start from 2001, which is about where I start from, then you can easily see that the return is realistic up until right now, .......

Honolulu's current median is 610,000.

At 10% for 10 years, the median Honolulu home will be at 1,582,182.00.

I couldn't find Kona's median but the argument is the same.

If Honolulu's median is 1.5 million in 10 years, according to your prediction, then the median household income better be close to 500,000 per year.

Good luck!

[Jack Hawksmoor]

Prudential Locations LCC

http://www.prudentiallocations.com/

Hawaii Realty
Associates, LCC

http://www.servingoahu.com/index.html

Century 21

http://www.hawaiimoves.com/content/Homepage.asp

American Dream Realty

http://www.adrhi.com/


The most advertised i have seen so far is Prudential Locations LCC. I see them everywhere when i don't want to see them. So who are they? Do they have a monopoly on real estate and buy up all the property in Hawaii so they can and sell it back to people looking to become home debtors?

Or is Prudential a company that advertises Real Estate and assigns RAs to each property. Or do they just do the research, looking for potential profits?

[HWNJAP]

well these companies normally vie for property listings. They take a large cut of the selling price. Depending on the selling price it can be a lot of money.

They have a large enough network to make them attractive to investors and sellers.

Sort of a Walmart or CostCo. The smaller realtors have a hard time attracting business due to the fact that they do not have the broad base, and advertising power of these larger companies.

I guess to answer your question? NO! They don't buy up properties.

They simply list them.

[admin]

Combining these, as Jack continues his real estate awakening.

[Jack Hawksmoor]

Does anyone know the average market value of homes in Hawaii?

Combining these, as Jack continues his real estate awakening.

Thankyou.

[pzarquon]

Average home prices statewide are above $600,000. But there is huge variation by island, and by community. The average price of a single-family home on Maui in 2006 topped $1 million (though obviously that was caused by a few pricey outliers).

On O'ahu, the average price is $843,750.

Median prices may be more realistic: $645,000 for homes and $325,000 for condos. Median price for homes on the Big Island is $386,000. On Kauai, $650,000.

[Jack Hawksmoor]

Average home prices statewide are above $600,000. But there is huge variation by island, and by community. The average price of a single-family home on Maui in 2006 topped $1 million (though obviously that was caused by a few pricey outliers).

On O'ahu, the average price is $843,750.

Median prices may be more realistic: $645,000 for homes and $325,000 for condos. Median price for homes on the Big Island is $386,000. On Kauai, $650,000.

Thankyou.

Is there a department i can go to personally and ask for facts in a more official format, printed of course? Doesn't the city have like a futuristic map of Oahu with little Monopoly Tokens and average estimate price labels?

[Mista Bumpy]

Aloha!

Try these links for some related data on Hawaii housing and income. In fact, poke around the Census site. These's a lot of interesting stuff there.

http://factfinder.census.gov/servlet/QTTable?_bm=y&-geo_id=04000US15&-qr_name=DEC_2000_SF3_U_DP4&-ds_name=DEC_2000_SF3_U&-redoLog=false

http://factfinder.census.gov/servlet/QTTable?_bm=y&-geo_id=04000US15&-qr_name=DEC_2000_SF3_U_DP3&-ds_name=DEC_2000_SF3_U&-redoLog=false

http://factfinder.census.gov/servlet/QTTable?_bm=y&-geo_id=04000US15&-qr_name=DEC_2000_SF1_U_QTH1&-ds_name=DEC_2000_SF1_U&-redoLog=false

Hope this helps a little to understand the very general picture. The labor force profile is especially interesting - From the point of view of a generally healthy economy, is rather distorted. Note the precentage of people employed in trade versus manufacturing. Also, military employment is omited, as it is from Non-farm Wage and Salary estimates as collected by the Dept. of Labor. It would be interesting to know what economic impact that has on the Hawaiian and Oahu economy. In that respect, you might want to contact Naomoi Harada at the Research and Statistics Office over on Punchbowl. Her email is Naomi.H.Harada@hawaii.gov

Aloha!

[skeeterbess]

You can find the most recent Real Estate sales stats here:

http://www.hicentral.com/hbr-stat.asp

One of my clients sends the more detialed Statistical Summary of Resales to me regularly. It's a PDF doc & I don't know how to link you to it, but it's got some good, solid stuff in it. Median & actual sales prices, units sold, etc, by neighborhood. Hmmm! Looks like I'm still in the cheapest housing on the island. :D

[Jack Hawksmoor]

Thank you all, for your help.

But now i have a very important question:

Does our state, have a book or reference on Real Estate law that i can get for myself?

How much do you think an attorney would cost for handling Real Estate forms?

[cynsaligia]

Thank you all, for your help.

But now i have a very important question:

Does our state, have a book or reference on Real Estate law that i can get for myself?

How much do you think an attorney would cost for handling Real Estate forms?

answer to question one: go to google.com and then type in "hawaii real estate laws.' the answer will reveal itself to you there.

answer to question two: depends on the caliber of the attorney (is he an $85 an hour kinda atty; is she a $250 an hour kinda atty?), depends on what "forms" you want handled & what exactly you mean by "handling," depends on how many hours the work will take, depends on so many things that i doubt anyone can give you a useful answer without you providing more detail as to what you're trying to accomplish.

[Jack Hawksmoor]

answer to question one: go to google.com and then type in "hawaii real estate laws.' the answer will reveal itself to you there.

answer to question two: depends on the caliber of the attorney (is he an $85 an hour kinda atty; is she a $250 an hour kinda atty?), depends on what "forms" you want handled & what exactly you mean by "handling," depends on how many hours the work will take, depends on so many things that i doubt anyone can give you a useful answer without you providing more detail as to what you're trying to accomplish.

Thank you for answering so soon.

See, that's the thing, this is why i asked here.

For the past month i have been searching for a realiable source of information regarding our hawaii real estate laws. I have found article after article, people's opinions, and nothing aggravates me more than using Google.

I want to go to like City Hall or something and demand this great book of knowledge!:D

[cynsaligia]

funny. i was able to find a link to a book that would probably fit your needs on google using those exact same first terms. *shrug*

[Jack Hawksmoor]

funny. i was able to find a link to a book that would probably fit your needs on google using those exact same first terms. *shrug*

A few clicks later...? At first i thought it was just another scam website so i blew it off.

http://hawaiirealbooks.com/

Eh, $15 not too much to pay for the email download.

I am going down to the library to find out more.