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Foreclosures and Short Sales are a rapidly growing market On Maui, and I have a team of REALTORS that specialize in these markets.

See the current REO's on Maui


REO's Homes
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What is a Short Sale?
A short sale is when a lending institution accepts a discounted payoff amount on an existing mortgage to prevent a home from going into foreclosure. Often times a homeowner owes more than can be collected through the sale of the home

A short sale allows a homeowner to sell the property to avoid foreclosure.Lenders typically only give consideration to a short sales just prior to filing to foreclose.

Short sales are uniquely beneficial to all parties involved: homeowners, lenders,and investors alike, however, many lenders do not understand this. By accepting a short sale, the lender decreases their potential for loss and reduces the time to receive payment by a number of months. A short sale also minimizes the costs associated with foreclosures by the lender. Homeowners reduce the damage to their financial record while buyers benefit from a good deal on their newly-purchased property.

The key to the short sale process is a lender that is willing to cooperate, most are very slow to respond and rarely agree to accept a low price. A very high percentage of short sales do not close after months of talks with the lender. Most end up being foreclosed on by the lender and later come on the market as REO's

What is a Foreclosure or REO property?
When a property is sold through a foreclosure auction, its owner usually owes more to the lender than the market value of the property itself. This is often a barrier to selling the property, and sometimes such foreclosure auctions do not draw any bidders. As a result, not many foreclosure auctions end with the sale of the property, rather the title reverts back to the financial institution holding the lien. Properties in this category are referred to as REO (Real Estate Owned) properties.
After the bank takes possession of the property, the mortgage loan disappears and the financial institution deals with any items owed by the prior borrower, such as homeowner association fees. The financial institution also tries to get the IRS to remove any tax liens against the property. The current owners are usually evicted and often repairs are made to damage on the property in order to make it more attractive to potential buyers.
The best parts of buying a REO property are that buyers have significant leverage and may be able to turn the property around quickly, making money by speculating on above average returns. Banks are trying to get the maximum return when they sell an REO property directly. They want to sell them quickly for two main reasons: first, they don't want to tie up their money in capital reserves they are required to set aside for a foreclosed property, and second, the management of such properties is a headache they would rather not have.
However, banks are very sophisticated when it comes to managing REOs and foreclosures, often having a department dedicated to them. The selling process starts when a potential buyer makes an offer to the financial institution, which is gone over by its management. Often, the institution will make a counteroffer, and the buyer may respond with another offer. After they have agreed on the price, terms, and conditions, a contract for the sale can be made.
When preparing to make an offer, a potential buyer needs to look at what comparable properties in the area are worth, along with the cost of any needed repairs. Financial institutions usually sell such properties as-is, which makes the buyer's inspection even more important. If they discover damage that they did not anticipate, which the institution will not repair, they can then cancel the transaction.
Investors dedicate much to buying REO properties in terms of funds (often cash), work, time, and effort, thus the price needs to be far enough below market value to justify the risk. Foreclosures are properties that already have had problems that often include tax issues, a lack of maintenance, substantial repairs, and often needed improvements that cost a significant amount of money, and any investor looking to buy such a property needs to keep this in mind at all times.

See the current REO's on Maui:

REO's Homes
E-Mail Dan for password

REO's Condos
E-Mail Dan for password