I am suddenly getting a lot of inquiries on two oceanfront properties that are “REOs”—real estate owned by the bank after foreclosure. I’ve blogged about both of these oceanfront homes before, but right now I’m getting the same questions over and over, probably because buyers are starting to get serious about the details.
Both of these foreclosure listings have had recent price reductions and my guess is the banks are ready to take a reasonable offer. When banks list REOs at lower price points, they are usually disciplined about regular price reductions to sell in a short period of time. With listings in this $3—$5 million range, they tend to think in terms of a longer listing horizon, hoping to get a sale within 6 months or a year. Both of these oceanfront properties are at that stage.
The MLS photos don’t show the red granite exterior of this Hawi oceanfront estate home (MLS# 244454)
Don’t expect the listing agent on a bank-owned property to spring for professional photos or virtual tours. In the case of the 13,000 sq. ft. six-bedroom oceanfront estate home on 21.5 acres for sale in Hawi, my most frequently asked question is, “What does the exterior look like?” Since inexplicably, that’s what’s missing from the MLS photos.
The listing was released in April for $4,999,995 and is now down to $4,050,000. One might ask whether or not this is a best buy price? If you have checked out the new version of the Hawaii Life website, you’ll notice that we’re trying to rate listings, and this oceanfront foreclosure gets a value score of 92.
I don’t know what the official algorithm is, but here’s my perspective. The oceanfront lot adjacent to this home, which is not nearly as desirable as the acreage this mansion occupies, sold for $1,050,000 in 2009. Subtracting that out gives me a $3 million price tag for the oceanfront home. That works out to something like $230/sq. ft…which is about what it costs to build in Hawi using a kit home from one of the lumber yards!
The other listing I’m getting calls to show is one of the oceanfront homes at Kolea that I’ve blogged about in the past as my favorite.
This beachfront foreclosure at Kolea (MLS# 241676) has been staged with furnishings appropriate to its location and quality of finish
Now, forget what I said about banks and their agents not presenting their luxury foreclosure properties in the best light. When it comes to this oceanfront Kolea resort foreclosure, the property has been beautifully staged, but the MLS photos don’t capture everything…like the waterfalls in the entry, the privacy of the separate guest suite, or how the home is sited to give residents the feeling of being all alone at the beach.
I was told when the price was above $4 million not to bother writing offers that began with a “3.” Now the price has inched down to $3,695,000 after the most recent reduction. The psychology among the prospective buyers to whom I’ve shown the property seems to be to continue to wait to see just how low it will drop. Inevitably, someone will pull the trigger and the other buyers will be regretting the one that got away.
Our website is currently only rating this one at an “88,” but the devil is in the details. The Kolea home that went to auction in March and sold as a short sale for $3,850,000 was 4,169 sq. ft. compared with 4,784 sq. ft. for the REO property. Both lots have a buffer of lava conservation zone between them and the ocean, which also ends up being a buffer between your home and the sunbathers and Ironmen enjoying the beach. Only the foreclosure for sale has more privacy than the one that sold, and a great deal more privacy than the only house listed for less at Kolea, which is right next to the Beach Club.
By the way, the question I get asked about this oceanfront property is whether the furniture is included. Technically, no. You want to make the deal even sweeter? Throw it into the offer! What’s the bank going to do, put it in a warehouse waiting to stage their next Kohala Coast beachfront foreclosure?
A hui hou,
Beth Thoma Robinson, R(B), SFR