Maui Real Estate - Buyers Guide to Maui Real Estate

AN INTRODUCTION TO BUYING MAUI REAL ESTATE

Maui, The Valley Isle, ‘Paradise’ and ‘No. 1’ - offers many unique environments from the warm, Southwest-like conditions of Lahaina and Kihei on Maui’s leeward (away from the wind) West and South shores to the cooler, more humid, rainforest-like conditions of Haiku, Huelo and Hana on Maui’s Windward (toward the wind) North and East facing coasts.

As dramatic the difference between the wet and dry climates of the North and South Shores, the temperature differences between the coastal, sea-level, regions and Upcountry is equally dramatic. Temperatures in Kula, at about 2,500 feet elevation, are roughly 10 to 12 degrees cooler than Kihei, Lahaina or anywhere else along Maui’s tropical coastline. I mention this because Maui, only 729 square miles, has dozens of micro-climates. Wet, dry, hot, cool, even cold. From life on the beach to life on the mountain.

From watching the whales at play from an oceanfront lanai, to taking in the panoramic view of hundreds of square miles of glimmering ocean and an island-wide double rainbow from a mountainside lanai – this is Maui.

Getting Started

If you are interested in Maui real estate For Sale, Jim's job, once you have selected him to be your Maui REALTOR®, starts with helping you get to know the island, it’s several regions, the real estate markets in these regions, and other factors important to you, such as variations in climates, proximity to commercial centers, hospitals, restaurants and entertainment, recreation, etc. Many of my clients have found it most effective to meet with me first. That gives us an initial opportunity to discuss the Maui real estate market and the clients initial requirements regarding the type of real estate which interests them.

Following our discussion, having integrated their criteria for buying Maui real estate with some knowledge about the Maui real estate market, past feedback suggests it is most effective for buyers to go explore Maui on their own, with no REALTOR® to get in the way. You can check out sub-divisions, the various architecture, lot sizes, proximity to those things important to you and general prices (all contained in your copy of Jim’s Maui Real Estate Buyers’ Guide). It takes time and a relaxed atmosphere to get the feel of a neighborhood… and an island. Once you have some ideas about where your Maui dream home or condo might be found, it’s then time for us to meet again, review your thoughts based on what you saw and schedule some properties to view.

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Searching for Maui Real Estate

Maui’s computerized MLS system allows REALTOR® to print out a number of standard reports for clients, including CMA’s (Comparative Market Analysis) which will indicate what homes are available for sale and the prices of comparable homes which have recently sold. You can request your agent to include you on the Auto-Notification feature of the Maui MLS system, for selected properties (i.e., specific areas/regions, certain condo complexes or subdivisions, specific styles of homes or locations, such as ocean of beach front. Auto-Notification sends the client an e-mail with a link to a full page report on each new property that is listed in the Maui MLS the instant it is entered into the system. Your not waiting for your REALTOR® to notice the new listing and notify you.

For prospective buyers looking on the Internet, please make use of my Custom Maui Real Estate MLS Search Center and the information in More About South Maui Real Estate. You will find a wealth of information, much of it only available on JimWagner.com, or you can also Contact Maui REALTOR® Jim Wagner.

If you are not having any luck finding what you are looking for in the Custom Maui Real Estate MLS Search Center and would like me to query the Maui MLS for specific property criteria, please go to the Buyer’s Property Request online submittal form. There you tell me exactly what you want and I will search the Maui MLS for you and return the results to you promptly.

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Fee Simple and Lease Hold

These are two terms that are alien to most people, especially “Leasehold”. They describe the two basic ways a property owner in Hawaii hold title to real property. Fee Simple is basically the way most people hold title (tenancy) to property elsewhere on the Mainland US or a number of countries. Fee Simple describes a situation where one owns both the land and all improvements on the land. Leasehold is the term in Hawaii, given to real estate where only the improvements are owned by the property owner and the land on which the improvements sit is owned by a third party lessor who holds a long term lease and collects monthly rent for the use of the land. The owner of real estate improvements is the lessee. This is a concept that some customers looking to buy Maui real estate are not comfortable with. The law which allowed ‘leasehold’ property sales went into effect in 1961 and many of the leases were/are 50 years terms. So, starting in the second decade 2011 and on, we will start to see some of those leases come to term. Whenever you purchase leasehold real estate in Hawaii, you want to know and understand the distinct terms of your property’s lease, when lease payments are up for renegotiation, when the lease expires and what the options are for lease extensions and at what terms.

In theory, a leasehold property’s real estate market value would be equal to the value of a comparable Fee Simple property minus the present value of the future lease payments discounted at a rate equal to an anticipated growth rate for the comparable Maui real estate.

Oceanfront Versus Beachfront Property

Now it’s time to sit down, pour one of those Mai Tai’s and relax while we discuss what oceanfront and beachfront real estate on Maui costs and what the distinction is between the two terms, oceanfront and beachfront. Beachfront is simple, it describes property fronting one of Maui’s nice sandy beaches. Oceanfront is the term used to refer to all other frontage situations—rocky coast, rock cliffs (check out the North side of West Maui for some great examples of rocky cliffs). Ownership of any beachfront or oceanfront property stops at the vegetation line; the line at which natural vegetation ends (usually a few feet beyond the highest tidal points). Hawaii state law states that from the vegetation line to the water is public property, not subject to private ownership or control.

A Word About Ocean Views

While most Maui Real Estate is not on the beach or ocean front, big, expansive ocean views can increase a homes value 30%, 40% or, in some locales even, more over the same home with no ocean view (garden or mountain views). This is no more evident than condominiums in vacation rental programs. The ocean view condos are worth considerably more than garden view units because they can generate higher occupancy rates and higher nightly room rates.

Save Yourself Thousands, Literally, in Lower Maui Property Taxes

If you are planning to buy, or have already bought, a home on Maui, whether a single family residential home or condominium, and are planning on living here full time, you are entitled to a Maui County property tax exemption. This literally saved me about one third of my annual property tax billing before I received the exemption. Now, this only applies to principal residences; not to 2nd homes, vacation homes, investment/rental properties. Ask your Maui REALTOR® for the property tax exemption form; better yet, ask them to fill it out, you sign it, and then ask them to file it for you. That is part of my full service commitment to my clients. To be effective in any calendar year, the request must be filed before December 31st of the previous year. Click this link for more information on Maui County Property Tax Explanation.

Buyers Representation Agreement

This is a concept that has really taken off in some areas of North America, while not in others. The concept involves a written agreement between buyers and a real estate brokerage and agent, basically the same as the written agreement between the sellers and a real estate brokerage and agent. It gives the buyers’ agent the knowledge that he or she will get paid a commission regardless of what home the clients select. This gives the agent the freedom to devote greater exclusivity to his or her buyer clients and spend more time finding the perfect solution, even if the perfect solution is a “For Sale by Owner”. The form of agreement is standard in Hawaii and is called a Buyers Representation Agreement.

The vast majority of the time, the Buyers realize the benefits of a BRA (alright, stop smiling) while not having to pay any commission because the property purchased was listed by a real estate brokerage where the Sellers pay the commission, or, the Buyers, through their agent, were able to negotiate that the Sellers pay the commission as part of the purchase agreement with a For Sale By Owner or Sellers using a discount/limited services Sellers’ broker.

While I don’t insist on my Buyer clients entering into a written agreement, I do encourage them to consider it. I believe I stand apart from most agents in the amount and effectiveness of the effort I give my clients. It starts with this website and expands when you engage my services.

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