Are There New Kolea Foreclosures on the Way?

Shortly after writing that both REO (foreclosure) homes at beachfront Kolea were in escrow, I had a conversation with an agent looking for an oceanfront foreclosure situation at Hali’i Kai, the other luxury condo complex at Waikoloa Beach Resort.

Her buyers were hungry for oceanfront and she was insisting she had on good authority that there were new REOs coming on in Buildings 13 and 15…which are two of the three oceanfront buildings at Hali’i Kai. Since Pam Deery and I dominate in Hali’i Kai oceanfront listings and sales, we have a good sense of the inventory, and I could not think of a single oceanfront owner in distress.

It wasn’t until our second conversation that the light bulb went off in my head. The new REOs will not be at Hali’i Kai; I’ve been waiting and watching for a very long time for two bank-owned Kolea properties to finally appear on the market…and they happen to be in Kolea buildings 13 and 15!

Kolea owners have a small amenity area with a private path to the beach

I won’t tell you exactly which units they are, but here’s the scoop:

Remember, there are two sets of buildings at Kolea. The front row are six-plex, which means larger, 3-bedroom villas with all of them being outside units and all having garages. Behind those are twelve-plex buildings, mostly 2-bedroom floor plans and carports rather than garages.

The upcoming REO in Kolea Building 15 is an example of an inside, two-bedroom, 1,270 sq. ft. plus lanai. Recent sales of that floor plan have been mostly REO and short sale. The lowest sale of a comparable floor plan in 2010 bottomed out at $367,500; this year, a ground floor, inside, 2-bedroom sold once as a short sale for $425,000 and was resold two months later for $479,000 (remember my blog post on flipping?).

The large 3-bedroom Kolea villas have pocket doors for indoor-outdoor living like short sale 10E (MLS# 241405)

The upcoming REO in Kolea Building 13 completed foreclosure and became bank-owned at the beginning of this year. It is an example of the largest of the Kolea floor plans at 2,147 sq. ft. plus lanai. Again, trying to predict where the selling bank will choose to list it leaves me with the sense I’m walking into a casino.

A second-floor, non-distress sale, vacant, and never occupied unit sold for $1,425,000 in August of this year. The same floor plan is offered as a short sale in Building 8 for $1,299,000 with no offers…and over in Building 3 is a short sale at $899,000.

If you are serious about taking a shot at one of these two Kolea foreclosure opportunities, here’s what you need to do:

• Choose an agent to be your buyer’s representative. You want someone to call you the moment it hits the MLS. I recommend signing a Buyers Representation Agreement if you really want to be their first call!
• Get pre-qualified if you will be financing; have your proof-of-funds ready to send if you will be an all-cash buyer.
• Ask your agent to discuss the comps with you, so you know what your top price will be. In recent REO and short sale releases, we’ve seen bidding wars; you may or may not be given the opportunity to resubmit a “highest and best offer” if there are multiple offers on the table.
• REOs are sold “As Is.” These have been vacant for a while, so figure into your budget some deferred maintenance as well as furnishings.
• Banks like to see clean offers. An agent who has sold at Kolea previously should be able to provide you with condo docs, so you can study them in advance. An agent who has helped clients with REOs will walk you through how to write an offer that has a chance of easy acceptance.

Good luck!

A hui hou,
Beth Thoma Robinson, R(B)
Direct: 808.443.4588    
Email: Beth@HawaiiLife.com