Disconnect between value and sales price

[HanapepePuppy]

Originally Posted by merced mullet

I found your paragraph very interesting as I too found our Kaua'i real estate agent, whom we thought we could trust, also listed the wrong number of rooms/bathrooms, square footage and "messed up images." This caused quite a stir amongst the 13 heirs to the Kapa'a estate when we located our selling listing without the knowledge of the agent. However when the thirteen of us, who now all live on the mainland or Oahu, found out about the the mis-information we were flabbergasted! We made the agent get the information right as well as take better pictures. We think the Lihue attorney handling the estate proceedings also had a hand in some kind of "inside deal" but that is all speculation. We understand that attorney has had a controversial past when it came to land-use development on Kauai....but the connection to the estate was all speculation.

The funny thing is, when we meet her at the property the agent told us of her desire to buy the place and how she was currently trying to sell her condo to be able to afford it, whether or not she messed up details about the house on purpose I can only assume but other properties she listed where not screwed up, only the one she wanted to purchase. I asked my agent about this and if it was ethical or common and he kind of brushed off the question which makes me think that this happens a lot in a place like Kauai where a large portion of buyers are narrowing down their choices by viewing properties from online. If you make it look bad enough, they wont buy it or even consider it.

[KauaiHiker]

The 2 stories from HanapepePuppy and merced mullet only confirm my bias against real estate agents on Kauai. I was lucky in that the one time I bought a house here, it went very smoothly. But every time I get interested in the local real-estate market, or do some research on the local MLS, I see so much BS. It varies from the usual realtor-speak (cozy, needs TLC, ...) and expected omissions such as being located on a major road or rainy area, to all the shady thing such as vague disclosures of unpermitted work, suggestions of unpermitted vacation rental, and the dreaded listor is owner. It seems like so many of the agents are speculators themselves, buying on inside information (unlisted properties), saving their 3% commission, and flipping the property with a huge markup and barely a coat of paint over the termite holes.

The source of all this, I think, is the small but growing market with high prices, in a small-town atmosphere where everyone knows everyone else, and there are barriers to entry, so they can protect their little scheme.

And don't get me started on the "developers" who take ag land and CPR it into "ag estates" that everyone knows will become luxury homes (with a rental unit) for "gentlemen" "farmers." Maui and Oahu, here we come. It seems like as soon as the realtors make a bit of money with their spec houses, they realize how much more money they can make by converting Kaua'i's open farm land into luxury housing.

I've often thought that a local, dedicated, and honest buyer's agent could make a living researching properties for off-island potential buyers. Knowing the neighborhoods here, I can tell you a lot about a property just from a TMK number and a lot more by driving by. It would even be an advantage to not being licensed and part of the game. I think the "industry" could use a good dose of transparency.

[KauaiPono]

Whoa wait a minute.

I have bought, and now own, three properties on Kauai ( see my previous posts on retirement plans). I have used two different real estate agents with no problems at all. Not all doom and gloom.

The only fishy incident I had occurred when I was bidding on a property and the listing agent was also representing another competing buyer, so she knew my best and final offer.....and ......low and behold the final closing price was $500 over my best and final offer. That, by the way happens everywhere in the US not just in Kauai.

I did not re-use my first realtor because she only worked part time and was not aggressive enough in responding to my inquiries, but she was nice, professional and forthright.

I still am active in the real estate market and although as Kauai Hiker pointed out, there are many homes with unpermitted additions, most transactions are fine. Just know that when they listing agent is also representing a competing buyer too, you will not win unless you break their (the competing buyer's) budget.

By the way....Most properties in Kauai that are below 500K do not last long on the market. Homes over 700K take a bit longer to sell, with million dollar homes sitting for months if not years.

Most people who vacation on Kauai want to buy condos in Poipu or Princeville. You cannot find a condo under 300K in Princeville anymore. They are starting at 350K. Two years ago you could find some for 180K to 275K. Those are long gone.

Tax assessments are not true values of the properties on Kauai. For instance: one of my condos was recently assessed at 408K (taxes due Feb 2014)but they are listing right now for high 500s or low 600s. It is a rarity to see a tax assessment for the same or even over FMV. Most Kauai tax assessments are well below FMV.

[HanapepePuppy]

Originally Posted by KauaiPono

Whoa wait a minute.

I have bought, and now own, three properties on Kauai ( see my previous posts on retirement plans). I have used two different real estate agents with no problems at all. Not all doom and gloom.

I personally was not trying to make it sound like doom and gloom, just expressing the experience we just went through. Our buyers agent was great I would hire him in an instant to sell the property if we so desired, but I would also check up on him and any listings he posted in our behalf. I think it is up to the individual buyer and seller to ensure that their agent is working in their best interest as even the best agents can be persuaded by their own desires to take advantage of a particular lucrative situation. Buyer/Seller beware are intelligent words of wisdom when dealing with a third party who is suppose to look out for your best interest.

[scgali]

The appraisal price really has little to do with the actual value of a property. Appraisals on Kauai are all over the map for many reasons. Comps are the best thing to go off of. Though it never hurts to make a low offer unless a brand new listing with lots of interest. We made a low offer last year that even our realtor said the seller wouldn't accept. But they did accept so you never know.