Buying Real Estate in Hawaii Part 1 of 2 Hawaii Life

8/11/2019 Buying Real Estate in Hawaii Part 1 of 2 Hawaii Life

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Ten Things Canadians (or any Foreign Buyers) Need to Know Before Buying Real Estate in Hawaii Part 1 of 2

by: Pat Strausse, RB

February 28, 2012

10 Comments

If you can see yourself living the good life in Hawaii, here are some tips to get you started

If you are a Canadian that wants to buy property in Hawaii, there are 10 things you should know before you start looking for your Hawaiian home.

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In the past few years, Canadians have been at the top of foreign buyers for Hawaii Real Estate. So, although Canadians should know a few points about Hawaii

real estate before buying here, its still fairly easy for a Canadian to buy their dream home or condo in Hawaii.

So, heres a look at the first 5 out of 10 things you should know before you buy:

1. Is the property fee simple or leasehold?In Hawaii, there are two types of property fee simple or leasehold. Fee simple is the term for property where you

own the land and all the improvements on the land. With leasehold property, you are paying for the improvements on the land, but do not own the land, instead

you pay a lease on the land. If you are buying leasehold, you will want to know the terms of the lease. Also, it can be more difficult to obtain a loan on leaseholdproperty as the loan needs to be for 5 years less than the time left on the lease.

2. Is this a distressed property?In Hawaii, a large percentage of the properties for sale are distressed properties either a short sale by the owner or a

REO property. A short saleis a sale where the sales price is not enough to pay off the mortgage, so the transaction must be approved by the sellers lien holder or

lien holders. A REO is short for Real Estate Owned, this is property that has gone through the foreclosure process and is now owned by the bank. While there are

many details to these transactions, the key points are:

Because you need lender approval, the process will take longer than a normal sale expect anywhere from 2 to 6 monthsand maybe even longer.Distressed properties are almost always sold as is and often have been damaged and may have had appliances and fixtures removed.

The buyer will often pick up costs that a seller would normally pay, such as termite inspection, cleaning of property, and staking of property. The buyer

may need to pay for liens on the house, back taxes, or HOA fees (monthly home owner association fees). It is always best to know what these figures

may be before you submit an offer.


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10 Responses to Ten Things Canadians (or any Foreign Buyers) Need to Know Before Buying Real Estate in Hawaii Part 1 of 2

Ken

February 29, 2012 at 1:52 pm #

You say a large percentage is distressed properties, how much is that large percentage on your island? Ive heard that its less than 10% in other Hawaiian

islands.

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Annie Mendoza, RS

March 1, 2012 at 10:09 am #

Mahalo, Pat! Great info. Regarding getting financing, I recommend that foreign buyers use a lender doing business in hawaii because of the nuances of

buying in this state. Especially with condos and the rules about condo-tels, occupancy, vacation rentals, etc. Cant wait for #6-10!

Reply

Pat Strausse R(B)

March 1, 2012 at 12:09 pm #

@ Ken, the percentage of sold properties last year on the Big Island varies depending on what part of the island you are looking at and whether it was a

house or condo. But, just to give you an idea of some of the numbers found on the Big Island in the North Kohala district distressed sales were 19 of 54

total sales for 35%, and in South Kohala it was 87 out of 212 sales or 41%. Hilo had a similar number of home sales, 192 homes sold but only 58 distressed

property sales for 30%. A quick look at some condos sales shows Kona had 325 condo sales last year with 157 sales going for distressed properties for 48%

and in South Kohala the Kohala Coast resorts and Waikoloa Village- there were 230 condos sold with 104 distressed sales or 45% of the sales. So, as you

can see last year on the Big Island distressed sales made up a big piece of the pie. But, I dont think we will see quite those numbers for this year as the total

number of distressed properties is going down and in some areas they are really starting to vanish.

Reply

Ken

March 1, 2012 at 5:13 pm #

So of available inventory (ACTIVE!), what percentage is distressed?

Reply

Ilikea

April 16, 2013 at 2:55 pm #

Read what she just shared with you.

Have a look online for properties available.

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Pat Strausse R(B)

March 1, 2012 at 12:11 pm #

@ Annie hey did you take a sneak peek at my part 2? Financing is in that list, so I will be covering it soon.

Reply

4.

Catherine Klug, R(S)

March 1, 2012 at 2:33 pm #

Great blog, Pat! Lets not forget that at closing the escrow documents will have to be notarized by a US notary. The instructions will likely direct Canadian

buyers to do the signing at the US Embassy. It can be time consuming and an appointment will be required ahead of time. Oopps you may cover that part

next!!!

Reply

5.

Pat Strausse R(B)

March 1, 2012 at 3:13 pm #

@ Catherine You are correct getting paperwork signed will also be in part two! Guess I better get busy writing it.

Reply

6.

Sean Robertson

March 7, 2013 at 4:16 pm #

darn, why did I have to be born Canadian? I dont mind jumping through all the hoops to buy a property but the 6 month time limit per year for visiting really

sucks! Youd think that owning a property would be a good enough reason to be allowed to live there full time

Reply

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Todd Barrett, R(S)


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Todd Barrett, R(S)

March 7, 2013 at 8:41 pm #

Fantastically informing post Pat! Ill be forwarding this one on to all of my Canadian clients for sure!

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