Buyer FAQs

Fee simple ownership is probably the most familiar form of ownership to buyers of residential property, especially on the Mainland. Fee simple is sometimes called fee simple absolute because it is the most complete form of ownership. A fee simple buyer acquires ownership of the entire property, including both the land and buildings. The fee simple owner does not pay ground rents, but does pay maintenance fees and real property taxes. The fee simple owner has the right to possess, use the land and dispose of the land as he wishes–sell it, give it away, trade it for other things, lease it to others, or pass it to others upon death.

The leasehold interest is created when a fee simple land-owner enters into an agreement or contract called a ground lease with a lessee. A lessee buys leasehold rights much as one buys fee simple rights; however, the leasehold interest differs from the fee simple interest in several important respects. First, the buyer of residential leasehold property does not own the land and must pay ground rent. Second, the use of the land is limited to the remaining years covered by the lease. Therefore, the land returns to the lessor, and is called reversion. Depending on the provisions of any surrender clause in the lease, the buildings and other improvements on the land may also revert to the lessor. Finally, the use, maintenance, and alteration of the leased premises are subject to any restrictions contained in the lease.

If you know where you want to live, have a steady and secure income, and are ready for the responsibilities of homeownership, then it’s a great time to invest in property.

A conventional loan down payment is usually 20% of the sales price, but other types of financing require as little as 3.5% to 15%. A mortgage lender can tell you what types of loans you qualify for.

If you know where you want to live, have a steady and secure income, and are ready for the responsibilities of homeownership, then it’s a great time to invest in property.

Contact a mortgage lender to get pre-approval for a loan. The lender will ask you some basic questions about your income and debts and can tell you what amount you can be approved for, and how much your mortgage payments will be.

Usually, you are asked to provide your last two tax returns to show proof of income. You should also provide recent bank and credit card statements and proof of your current pay rate. You will also be asked for your social security number so they can run a credit check.

While often used interchangeably, these terms don’t mean the same thing. Pre-qualification is an estimate of what you may be approved for based only on the verbal information you provide. Pre-approval means the lender has verified your income and debt information and run a credit check.

Your mortgage lender is the best person to advise you on this question. Their products and qualifications change from time to time, so they would know best what products are available to meet your needs.

Call your buyer’s agent: the agent you are working with to find your home. It’s best that you work with one real estate agent throughout your search because that person learns what you like and dislike and will invest a lot of time vetting properties for you. That person also represents your best interests only. When you call the agent advertising the home, you are dealing with the seller’s agent, so, while they can assist you, they are also trying to get the best price for the seller.

Absolutely. As a buyer’s agent, I can show you any house listed in our MLS system, and I will contact FSBO sellers on your behalf. As mentioned above, working with me as your buyer’s agent ensures that your interests are protected.

When you find the property you want to make an offer on, I will run a Comparative Market Analysis (CMA) to help you determine a fair offer amount. I will also guide you through the additional terms of the contract, such as the escrow amount, closing date, and any additional terms you want to be added to the offer. I will write the offer on a contract form and submit it to the seller’s agent.

You always have the right to back out of the purchase, but you may lose your escrow deposit. If the contract is contingent on a property inspection, you usually have the right to cancel for any reason during the inspection period. Once the inspection period has passed, you cannot back out and keep your deposit unless the seller agrees, or an additional term has not been met.

If a seller receives multiple offers on their home, usually their agent will inform the buyer’s that multiple offers have been received and the buyers have another opportunity to alter their original offer to present their “highest and best” offer. Keep in mind that many factors may influence the seller in addition to the offer price, such as the down payment amount, closing date, and inspection terms.

Once both parties have agreed on all terms and signed the contract, your escrow deposit must be made and you should schedule the home inspection. Your lender will receive a copy of the contract and will begin processing your mortgage application.

This means that all parties have agreed on terms, have signed the contract, and the signed contract has been delivered to both buyer and seller. Payment of the earnest money or initial deposit is expected to be delivered to the escrow company by the agreed upon deadline, typically 2 business days after the Acceptance Date. The larger the initial and additional deposits, the more seriously your offer will be taken.

We always recommend that you have a home inspection done. In the scheme of things, paying a few hundred dollars to have peace of mind that there are no hidden dangers or problems is well worth the money.

The cost of the home inspection depends on the size of the house and additional inspections requested, such as swimming pool, septic tank, termites, insurance four-point (HVAC, plumbing, roof, and electrical,) wind mitigation, and radon. An average home inspection, without additional inspections, is about $300.

If you have gone through the pre-approval process and have been forthcoming with all the information requested by your lender, it’s unlikely you will be turned down, but it does happen. Make sure you do not change jobs, purchase big-ticket items on credit, take out a car or boat loan, or open any other new credit accounts while your mortgage is being processed. If your loan does fall through, talk with your lender about changing to a different loan type.

When you have the keys! When you are financing your purchase, it takes four to six weeks for your loan to be processed. Once the lender gives the all-clear, closing is scheduled. You will sign your loan documents and both parties will sign documents transferring ownership to you. Unless other arrangements have been agreed upon by both parties, the sellers should have completely vacated the home when they sign the closing papers. You can have your belongings ready to move, and a moving company scheduled before you go to closing. At closing, you will receive the documentation you need to provide utility companies with proof of your new residence.

No. Most Brokerages have disclosures that allow a Buyer to purchase a home without physically seeing or inspecting it yourself. This disclosure is commonly referred to as a ‘Sight Unseen Addendum’ – and it attaches to the Hawaii Purchase Contract. There is a risk involved as the Buyer to do this type of purchase without physically inspecting a property, but we do accommodate this.

Fee Simple is the most common form of ownership, and is the most complete type of ownership that exists. The title of the property, which includes the land and the improvements on the land, is transferred to the buyer upon closing. With Leasehold ownership, the buyer does not own the land but instead has a right to use the land for a specific amount of time. When the lease ends, the buildings and any other improvements on the land may revert back to the owner of the land. In Hawaii, a large portion of the land is owned by the State of Hawaii, the Federal Government, or Bishop Estates (Kamehameha Schools).

Yes, but it is required that an additional 5 years are remaining on the lease beyond the loan term. If looking at a 30 year, there will need to be 35 years left on the lease.

Item descriptionMaybe. Check with your bank to confirm they are licensed in the State of Hawaii, if they are, then yes you can use them to get pre-approved for a home loan. If they are not, we have a list of great lender options for you. In regards to condo-tels, or condos allowing short-term vacation rentals, you must use a local lender as mainland banks will not approve a loan on this kind of property.

Typically, when a Seller lists their home, they agree to pay the commission for both the Buyers

representation as well as the Seller. The Listing price encompasses the costs for commission, so although you are not paying out of pocket as the Buyer, it is usually still in the overall cost of the property itself. Overall, make sure you have your own Realtor representation as the Buyer! In some cases where the purchase price is less than $15,000, there may be a transaction fee that the buyer is responsible for. Be sure to talk with your LUVA Realtor about any applicable transaction fee.

Hawaii is a Good Funds State. This means that the funds required for a transaction to close must be readily available, meaning checks must be fully cleared, in the escrow account two days prior to actually closing.

Closing in Hawaii occurs the day the property officially records with the Bureau of Conveyance, not the day you sign, or the day you deposit the funds. You will get the keys to your new home as soon as escrow confirms the recording with the Bureau usually two days from the day you make your deposit.

Realtors cannot answer questions or give opinions relating to schools, crime rates, “good” or “bad” neighborhoods, or demographics as examples. These would be a violation of the Fair Housing Laws which were enacted in 1968 to eliminate housing discrimination.

A corporation holding title to an apartment building which offers shares for purchase. In exchange for purchasing stock shares in the corporation, each owner receives a lease to occupy, not own, a certain unit in the building. Co-op owners are responsible for for their share of the corporation's expenses: maintenance, mortgage, payroll, taxes, etc.

A property that is a CPR is one where each owner has ownership of a certain unit with a percentage of the undivided interest in the common elements. Common elements may include land, lobbies, pools, roads and roofs. CPRs include apartment buildings, as well as land that has been condominiumized. An example would be a property owner with multiple residential structures wishing to subdivide and cannot, so the owner would then create a CPR and each structure would be assigned a unit number. CPRs have an association with covenants and restrictions. In most cases a CPR will have monthly maintenance fees.

Also known as AOAO (Association of Apartment Owners) fees, or strata fees. The maintenance fee is paid on a monthly basis and typically covers: insurance on the exterior of the building, common area maintenance, reserves, trash, water and sometimes basic cable and electric.