Selling Vacation homes in a primary Home Market
Resort Real Estate Referrals Prepared by Brad MacArthur and Tom Tezak
We’re Stealing your clients and we feel BAD Please Help us Stop… Who would like to sell Real Estate in Maui? Well, you can and all it takes is one email… Imagine if you make one outbound referral to an out of market agent for a $1,000,000 property, when it sells it will generate a $30,000 assuming a commission at 3%, that will result in a GCI (Gross Commission Income) of $7,500 and the only thing you had to do was send an email, do some research and make a phone call…the rest is all done by the other agent. Imagine doing just four referrals in one year and that will generate an extra $30,000 in GCI. Not bad for a free email. Then turn the table around and ask your out of market agents for inbound referrals and the rewards are even greater. That $1,000,000 sale nets a GCI of $22,500 from a customer you were handed before they ever got to your market. As you know we all realize referrals are great but we do not put much effort in to getting them and when you do the math, there is no more efficient way to generate sales in our business. The other notable thing is that referred clients always tend to have a greater sense of loyalty which we all appreciate. Referrals to other Realtors “out of Market”, & asking “out of Market” Realtors to refer their second home buyers to you, are 2 of the easiest paths to reach your financial goals. If you have a database of clients, Sphere of influence, affiliates & R.E Agent contacts outside of your market, you have everything you need to take advantage of this simple email technique. Asking for referrals is so simple and non-invasive and all you need to do is send a simple email to connect with potential buyers and sellers, manage their questions and have the resources you need in the right markets of interest.
Here is the path for you to take in securing your resort Referrals. 1. Send an email to your clients, sphere of influence and affiliates and simply ask them if they are thinking of buying a second home in the future, with the economy on the uptick, 1031 sales on the increase and second home sales quickly accelerating per NAR (National Association of Realtors) Studies.
“NAR’s 2015 Investment and Vacation Home Buyers Survey,* covering existingand new-home transactions in 2014, shows vacation-home sales catapulted to an estimated 1.13 million, the highest amount since NAR began the survey in 2003. Vacation sales were up 57.4 percent from 717,000 in 2013.� To make this even easier than you can imagine I have drafted a sample email for you to use, take it or reword it to your liking or be inspired to create your own letter. Just get the email sent and let me know how it is received, if you write your own be gracious and share it with me so we have more choices. Once you hear from your clients, be prepared to reach out to your Realtor contacts in the market area they are looking for and make the connection. I always like to find my referral partners through my networking affiliations and if I do not have a personal relationship with them I also interview them and make sure they are a good fit for my clients. Once you make the connection be sure to ask to be kept in the loop so you can communicate with your clients to be sure all is going well. But keep in mind that all markets are a bit different and before you advise your client on what to do make sure you are not overstepping normal and customary procedures in another market. Good Luck and please keep me informed of your success stories, they are great motivators for the rest of us. Brad Mac Arthur & Tom Tezak See attached articles from Maui News about more off island buyers than on island buyers and CNN story about Second Home Sale Explosion
Local buyers the minority in Maui real estate market December 6, 2015
By BRIAN PERRY - City Editor (bperry@mauinews.com) , The Maui News Save | Post a comment | Maui County is the only county in the state in which less than half - 48 percent - of single-family home and condominium buyers were residents while the remaining 52 percent were from the Mainland or foreign countries, according to a study by the Research and Economic Analysis Division of the state Department of Business, Economic Development and Tourism. Released last week, the study tracked home and condo sales data from Title Guaranty, a real estate title services company, from January 2008 to September 2015. In that period, there were 20,752 residential sales in Maui County. Of those, local buyers purchased 9,968, or 48 percent. Mainland buyers accounted for 9,310, or 44.9 percent, and foreign purchasers acquired 1,474, or 7.1 percent. "Maui County is loved by the Mainland buyers and also by Canadian buyers," state Chief Economist Eugene Tian said, adding that interest in purchasing Maui properties is fueled by tourism and direct airline flights to the islands. While higher demand from Mainland and foreign buyers would create upward pressure on property values and make it more difficult for residents to purchase homes and condos, it's also good for tourism when off-islanders buy a second home in the islands and then spend money in the local economy, Tian said. Statewide, there were 139,998 sales of homes and condos. With around 70 percent of the state's population, Oahu had the most sales with 85,860, or 61.3 percent; followed by the Big Island with 26,348, or 18.8 percent; Maui County with 20,752, or 14.8 percent; and Kauai with 7,038, or 5 percent, the DBEDT study reports. Maui County had the highest percentage of Mainland buyers at 44.9 percent (9,310 sales) and the highest percentage of foreign buyers at 7.1 percent (1,474). Oahu had the highest percentage of local buyers with 84.7 percent (72,686) and the lowest percentage of Mainland buyers with 11.7 percent (10,044). In Maui County, the average sale price paid for properties was $627,162, with local buyers paying an average of $470,817, Mainland buyers shelling out $735,919 and foreign buyers spending $883,842. Using statewide figures for comparison, buyers in the islands overall paid an average of $526,326, with local buyers spending $478,189, Mainland buyers $630,390 and foreign buyers $785,604.
Sales figures from West and South Maui regions - both with large numbers of condominium units show a majority of buyers from the Mainland - 62.7 percent in West Maui and 52.6 percent in South Maui. Also, South Maui had the highest percentage of foreign buyers anywhere in the state at 13.1 percent, the only region in double digits in percentage of sales to buyers outside of the United States. West Maui ranked second statewide in homes sold to Mainland buyers, 3,656, behind Honolulu with 5,327. Kona was third with 3,155 Mainland buyers, followed by South Maui with 3,120 purchasers from the Mainland. Upcountry was ninth statewide with 1,286 sales to Mainlanders. Only two communities in the state outside of Maui County had less than half of their local buyers purchasing property during the study period. Those were Kona, with 46.3 percent resident and 50 percent Mainland buyers, and Hanalei on Kauai, with 35.4 percent local and 61.7 percent Mainland buyers. Statewide, there were 32,838 homes and condos sold to Mainland buyers, with 38.4 percent (12,624 sales) coming from California, followed by 10.5 percent (3,435) from Texas, 8.5 percent (2,792) from Washington state, 3.4 percent (1,128) from Oregon, 3.3 percent (1,094) from Colorado, 2.6 percent (869) from Alaska, 2.6 percent (840) from Arizona, 2.5 percent (832) from Florida and 2.4 percent (802) from Illinois. Buyers from all other states made up 25.6 percent (8,422). The highest average sales price in Hawaii from buyers of any state was Illinois at $1.2 million, and the lowest price was Alaska at $382,950. An average of 1,629 homes in Hawaii per year in the study period were purchased by California residents, while 443 homes per year went to Texans and 360 homes per year were bought by residents of Washington. Among foreign buyers, Canadians and Japanese bought the most properties in Hawaii. Canadians purchased 2,497 at an average price of $721,297, and Japanese buyers acquired 2,144 at an average price of $840,344. Maui County captured 53.5 percent of the Canadian buyers statewide but only 1.6 percent of those from Japan. The Canadian purchasers paid an average of $868,162 for Maui properties, while Japanese paid an average of $968,467. Oahu took 88.1 percent of the buyers from Japan, and 22.6 percent of those from Canada. Buyers from Hong Kong paid the most on average for 112 Hawaii properties - $1,047,457, followed by the rest of China with 112 properties at an average price of $936,738 and Korea with 95 properties at an average price of $882,894. * Brian Perry can be reached at bperry@mauinews.com.
Š Copyright 2015 The Maui News. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Vacation home sales exploded last year By Kathryn Vasel @KathrynVasel
The beach was the most popular vacation home location.
More Americans may be looking to get away as vacation home sales jumped last year. Vacation home purchases made up 21% of all home sales last year at an estimated 1.13 million, the highest level since 2003 and a 57% increase from 2013, according to a report from the National Association of Realtors. The stock market's strong performance and gains in the labor market are creating more confidence among buyers, according to Lawrence Yun, NAR's chief economist. "The top 10% of families are feeling much more financially confident." The typical second-home buyer had a median household income of $94,380, 58% had two income earners and 48% financed less than 70% of the purchase price, according to NAR. A beach location was the most popular among vacation buyers, and 54% of properties were single-family homes. The survey included close to 2,000 adults who made a residential purchase last year, not including institutional investment sales. Tight inventory levels continue to plague many housing markets and push prices of primary residences up. However, the median price for vacation home buyers came in at $150,000 last year, an 11% decrease from 2013. Distressed properties made up 45% of vacation home sales last year, the NAR reported. "People looked at long-term opportunities and grabbed low bargain prices," Yun said. He added that popular vacation home areas, like the beach and mountains, tend to have a slower economic recovery pace. As more buyers scooped up vacation homes, the share of first-time and
investment buyers declined in 2014. Investment home sales dropped 7.4% last year. Generally, investment and vacation purchases tend to move in the same direction, Yun explained, but the recent rebound in home appreciation has priced out many investment buyers, particularly institutional ones as their main goal tends to be rental income. A third of second-home buyers plan to use their purchase for vacation, and 46% of the homes were located in the South. Baby boomers on the cusp of retirement are also playing a role in the sales surge, according to Yun, with 19% of all vacation home buyers planning to eventually make their second home their primary residence. "If they have the financial capacity to buy a vacation house today, once they officially retire in three to five years, they will turn that home into their primary residence."
Sample Letter Hello/Aloha, I just wanted to touch base and share a quick story. The other day I met an agent through some of my real estate networking and found out he has been helping quite a few buyers from our community (better to be specific here i.e. Seattle) to purchase a vacation home in (Destination, i.e Maui). I thought I should reach out to my friends and find out if that was something that you were considering? Knowing that there are so many ways to search real estate online or while on vacation, I came to realize the biggest problem is not having a relationship with a great agent you can trust. This can make the experience away from home a bit scary. So I wanted to let you know that from my great networking I know agents all over the country (world) that I know are great at what they do and more importantly trustworthy. So whether you are looking in your home town to buy or sell or any other destination let me know. I will be able to connect you with an experienced Real Estate Agent. You can be assured they will provide you the service you have come to expect when you are searching for your next property. Regards your Realtor, XXXXXXXXXXXX
Where Do Hawaii Buyers Come from? Area California
# of Owners Statewide 10,000+
# of Owners Maui 3000+
Arlington, VA
165
10
Atlanta, GA
108
14
Boston, MA
55
15
Colorado
209
33
Crescent City
10
0
Detroit Kitsap/Gig Harbor
9
1
104
43
New York
483
101
Newport Beach
382
102
Oakland Washington State Panama City, FL
356
69
7471
2216
12
3
Paso Robles
37
7
Pleasanton
165
60
Roseville
105
30
San Diego San Francisco
1232
229
1322
227
Seattle
1025
325
Tacoma
291
60
*Statewide Includes Maui
Your Back Yard‌ Ask your clients where they are buying next?
If we can be of any help at Wailea Realty for your Hawaii Referrals, give us a call. We will take exceptional care of your clients looking to purchase or sell their Maui Property. Brad MacArthur R(B) 808-357-5000 Brad@wailearealty.com Tom Tezak R(B) 808-280-2055 tom@tomtezak.com