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Oceanfront Foreclosures on the Big Island

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

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

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Justin - Head Web Head

September 10, 2011

Great post Beth. You are truly an expert in your area. I love the way you use Value Scores in your post!

Justin - Head Web Head

September 10, 2011

Great post Beth. You are truly an expert in your area. I love the way you use Value Scores in your post!

Annie Mendoza, (RS)

September 10, 2011

@Justin! Agreed!
@Beth! Mahalo for your shining examples of true professionalism!

Annie Mendoza, (RS)

September 10, 2011

@Justin! Agreed!
@Beth! Mahalo for your shining examples of true professionalism!

Beth Thoma Robinson R(B)

September 10, 2011

@ Justin, thanks for creating Value Scores!
@ Annie, appreciate your reading and taking the time to comment. The collaborative spirit between Hawaii Life agents is a strength of this company.

Beth Thoma Robinson R(B)

September 10, 2011

@ Justin, thanks for creating Value Scores!
@ Annie, appreciate your reading and taking the time to comment. The collaborative spirit between Hawaii Life agents is a strength of this company.

Winston Welborn

September 10, 2011

Great information Beth. You are truly the Hawi / North Kohala expert.

Winston Welborn

September 10, 2011

Great information Beth. You are truly the Hawi / North Kohala expert.

Steve Nickens

September 10, 2011

Beth, Great article, lots of information, great photos, and price on point as far as value. The bank should have you as an agent, great job.

Steve Maui

Steve Nickens

September 10, 2011

Beth, Great article, lots of information, great photos, and price on point as far as value. The bank should have you as an agent, great job.

Steve Maui

Sharon Brown

September 10, 2011

I really enjoyed reading your post, Beth. You have a style in your writing that draws one in. I chuckled reading the last paragraph.

Sharon Brown

September 10, 2011

I really enjoyed reading your post, Beth. You have a style in your writing that draws one in. I chuckled reading the last paragraph.

Caron Ling, R, CRS

September 10, 2011

This is great Beth… I love it. You brilliantly described homes that would not get any good exposure and made it possible to envision the possibilities to have someone want to inquire with you about these great deals. Way to go… as always.

Caron Ling, R, CRS

September 10, 2011

This is great Beth… I love it. You brilliantly described homes that would not get any good exposure and made it possible to envision the possibilities to have someone want to inquire with you about these great deals. Way to go… as always.

Beth Thoma Robinson R(B)

September 10, 2011

@ Winston, would love to have some more of your photos of the area!
@ Steve – hmmm, let me think about that…
@ Sharon, thanks for reading and commenting!
@ Caron, you’ve done some great posts about Oahu too.

Beth Thoma Robinson R(B)

September 10, 2011

@ Winston, would love to have some more of your photos of the area!
@ Steve – hmmm, let me think about that…
@ Sharon, thanks for reading and commenting!
@ Caron, you’ve done some great posts about Oahu too.

Beth Thoma Robinson R(B)

September 15, 2011

Price reduced on the Hawi mansion to $3,900,000 as of September 15,2011.

Beth Thoma Robinson R(B)

September 15, 2011

Price reduced on the Hawi mansion to $3,900,000 as of September 15,2011.

Katie Minkus, R(BIC)

October 11, 2011

Beth – how awesome would it be if we had the Hawi mansion participating in our Premiere Estates Auction on November 26??

@Steve – “The bank” actually did just that… not for these properties, but they just hired Beth to sell a pair of oceanfront lots at Naupaka Place in the Big Island’s Waikoloa Beach Resort, each listed over $2.5M! Beth is a glowing example of why local knowledge is critical when buying or selling property in Hawaii!

Katie Minkus, R(BIC)

October 11, 2011

Beth – how awesome would it be if we had the Hawi mansion participating in our Premiere Estates Auction on November 26??

@Steve – “The bank” actually did just that… not for these properties, but they just hired Beth to sell a pair of oceanfront lots at Naupaka Place in the Big Island’s Waikoloa Beach Resort, each listed over $2.5M! Beth is a glowing example of why local knowledge is critical when buying or selling property in Hawaii!

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[…] favorite of these Kolea oceanfront homes was one I blogged about in this 2011 article about oceanfront foreclosure properties. It sold in 2011 for $2,750,000…and the owners who built the home had paid $3,295,000 for the […]

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