Things to Consider When Buying a Home in Hawaii

Fee Simple versus Leasehold. There are two types of home ownership in Hawaii – Fee Simple or Leasehold. Before I came to Hawaii, I've never heard about fee simple. It was very confusing at first but in reality is very simple. Fee Simple is complete ownership of the property, including the land. For Leasehold properties, you own the structure or unit, but someone else owns the land and you pay a month lease rent to the landowner. Mostly all of the houses in Hawaii are fee simple; leasehold is more common for condominiums. When buying a condo that is a leasehold, you should pay attention to the duration of the lease, and the monthly lease payment. 

Prices vary widely depending on location. Location and view have a big impact on the price of properties. In general, properties with ocean view sell for more, and the further away you are from town, the lower the price is. Each neighborhood has it's own housing trend so if you would like to receive information about a specific area, please let me know. 

HOA/maintenance fees. Condominiums have an Association of Apartment Owners (AOAO) that charges maintenance fees. These fees usually cover common area maintenance and repairs, amenities (such as pool), sewer and water. When looking at properties, it is good to compare the fees since they are always different. On average condominium's monthly AOAO fees range between $500 and $1000/mo. Also some condos charge additional assessment fee to cover unplanned expenses such as an elevator repair. Before buying a condo it is good to read the condo docs and the meetings minutes which go over the maintenance fee, house rules, future plans for the building.

Negotiate for furnishings. Shipping furniture to Hawaii is expensive and local furniture prices are high, so it’s not uncommon for buyers and sellers to negotiate for furniture to be included in the sales price. Make sure you ask if the furniture is owned by the seller, since many realtors stage their listings.

Choose a local lender. It is important to select a Hawaii-based company that is familiar with the state’s underwriting and valuation, as many mainland lenders and underwriters lack knowledge of Hawaii’s unique properties. This can help prevent issues or delays in closing. For example, if you are looking for a VA loan, certain buildings don't allow VA financing.

Insuring your home. It is always a good practice to insure your home especially if it is located in a flood zone. Also, many condominiums have their own requirements for a certain type of insurance (this will be noted in the condo docs).

 

Have more questions about properties in Hawaii? Call me 808-783-6333 or Email me desi.stancheva@cbrealty.com

ALOHA 🌺