FAQ

General
Buyer
Seller

Information about owning an investment rental property: If you've been thinking about purchasing a Hawaii property for investment, there are two types of ways that you can use your property to generate income.

The first is as a long-term rental. This is where a tenant is found and placed on a long-term lease, typically for a 1-year minimum. The management fee for long-term is rental is typically 20% for the first months rent, and 10% thereafter.

The second option is to rent your property as a vacation rental. This allows the property to be rented for less than 6 months, ideal for owners to want to use the property for their personal use. Due to changing laws in Hawaii, renting your own property as a vacation rental has become more difficult, and can only be done in select regions of the state. Check with your real estate agent before exploring vacation rental investment properties.
Difference between buying a property in Hawaii versus offshores.: Purchasing a property in Hawaii is similar to purchasing a property anywhere in the US. Certain procedures or laws may vary slightly, but the process remains largely the same. The complexities come when you compare purchasing a property in Hawaii versus offshore or in another country. If you're purchasing from abroad, discuss this with your real estate agent so you can clearly understand the differences.
What is "Escrow" ?: Escrow companies play the role of an intermediary between the buyer and the seller during the transfer of official documents and financial funds. They assist with processing official deed transfer documents, sales contract forms, perform title searches, and other necessary tasks during a real estate transaction. The cost of escrow services vary depending on the transaction and escrow company.
What is "FS" and "LH" ?: ■ FS = Fee Simple, meaning you have complete ownership of the property, including the land that it's on.

■ LH = Leasehold, meaning that your property is on leased land, and that you pay a lease fee to the land owner. When purchasing a Leasehold property, it's important to know the duration of the lease, the lease fees, and when the lease fees will be re-negotiated. It's important to thoroughally check the specifics of the lease, as at the expiration of the lease, under certain circumstances, you are required to surrender your property back to the land owner. Check with your real estate agent for more information.

Sometimes, the land lease is available to purchase, in which your property will be converted to Fee Simple upon completion of the purchase.
What is an Open House?: An Open House is when a property for sale is open during a certain time for viewing. Different from a private showing, these typically happen between a time window, for example, on Sundays from 2:00 to 5:00 PM, where anyone is available to come and preview the property. The sales agent will be there to show you the house.
How can I get a loan for a Hawaii property?: Obtaining a loan for a Hawaii property is the same process as anywhere in the US. Talk with your loan officer or ask for a referral from your real estate agent to meet a Hawaii-based loan officer.
What is a notary?: During a real estate transaction, certain documents are required to be notarized. A notary is a city-licensed individual who witnesses and verifies that signatures are authentic. This process requires that you sign documents in front of the notary, after which the notary will stamp and sign the document as an authentic signature.

What preparation do I need prior to purchasing a Hawaii property?: First thing first, if you're planning on using a loan, consult with a loan officer to verify your purchasing power. This will help you set a budget when buying a property. Second, it's important to clearly define what type of property you're looking for, whether it's a single-family home, townhome, or high-rise condominium. Clearly outline which features are must-haves, so you can help narrow down your search, such as excluding properties that don't have 2 or more parking stalls, or making sure you have that perfect mountain view you've always wanted. Once your search criteria is set, work closely with your agent to see what's available on the market. Once you start seeing properties, you may want to revise your wish-list, or you might find your perfect property right away!
Is it possible to purchase a Hawaii property without being in Hawaii?: Yes, you can purchase a property without seeing the property first. However, we'd strongly advise against that, as professional photography and videography can be enhanced, or not clearly represent the properties floor plan, layout, or condition. We always strongly advise our clients to view the property in person prior to purchase.
If I see a property I'd like to view, how long does that process take?: Once you've found a property you'd like to view, ask your real estate agent to schedule a showing. In this case, your agent would call the seller's agent, and see when the property is available to view. Some properties are available to see on short notice, some require advanced notice, and some are only shown during open house events.
How do you determine the offer price for a property?: Your offer price will depend on many variables. Typically your agent will analyze the market for the property you're interested in, factoring in comparable sold properties, the condition of the property, how long the property has been on the market, and the current market trends. This will help formulate your offer price. Ask your agent for tips on how to increase your odds of your offer being accepted.
How should I have my name listed on the ownership deed?: There are different ways for you to claim ownership of your home.

■ Tenancy by Severalty = Individual and corporate ownership
■ Tenancy in Common = Several people listed as owners, and inheritance rights are in accordance with Inheritance Law
■ Joint Tenancy = Several people have ownership, and inheritance rights transfer to the surviving owners
■ Tenancy by Entirety = Joint ownership of a couple, where ownership transfers to the surviving owner

We recommend that you discuss these options with your legal advisement and financial accountant team.
What are the fees for purchasing real estate?: The buyer is responsible for certain costs associated with purchasing real estate. These can be negotiated during the contract, but as a standard practice, you can expect to pay for the inspection, certain escrow fees, the title report and title registration, pro-rated property tax, and other fees. As a rough guide, the buyer can expect to pay approximately 1% of the purchase price in fees. The buyer pays no commission, as that comes out of the seller's side.
What will I need to pay after purchasing a property?: You will be responsible for all fees associated with maintaining your property, including insurance and property tax to the city. You'll also need to pay your mortgage if you purchased with a loan. In addition, if you purchase a condominium, you'll be responsible to pay a maintenance fee to the condominium management company. In certain circumstances, there may be additional fees that need to be paid to neighborhood associations. It's best to discuss any fees with your real estate agent in advance of your purchase.
What is the condominium maintenance fee?: The condominium maintenance fee is a fee you pay to your condominium management association for the up-keep of your building, its amenities, and its shared common areas. This fee goes to make sure that your condominium is maintained and in working condition. The cost of your maintenance fee will vary depending on the age of the building, number of amenities, number of units in the building, size of the building, and more factors. Discuss this fee with your agent prior to purchasing.

Is it possible to sell a property in Hawaii without being in Hawaii?: Yes, it's possible to sell a Hawaii property without being in Hawaii. However, you may need to travel to Hawaii to sign certain documents in-person. Check with your real estate agent on the procedure prior to listing your property for sale.
Is it possible to sell a property that is occupied by a tenant?: Yes, it's possible to sell a property that is tenant occupied. Depending on the lease agreement between the tenant and the property manager, some transactions may require that the rental agreement is honored to its extent before you or the new buyer can occupy the home. Many properties that are tenant occupied but also for sale are on a month-to-month lease, and the tenant can vacate on short notice. Each transaction is different, so it's best to check with your real estate agent on the precise details.
How do you decide on the sales price of a property?: Determining the value of a property is dependent on many variables, including current market trends, property condition, type and quality of upgrades, interest rates, and more. When listing a property, it's always important to aim for a price that's in-line with a realistic selling price. Price too high, and you risk the property receiving little to no showing activity, as buyers will seek a better value. We work closely with our sellers to develop a thorough marketing plan, outline all of the current market variables, and provide a price range that meet our clients expectations for speed of sale, return on investment, and quality of service.
What's the cost of selling a property?: When selling a property, the listing agent and the seller will draft up a listing agreement that will outline the fees paid to the agent. This is typically a 6% commission fee, where 3% is paid to the buyer's agent, and 3% is paid to the seller's agent. You can typically expect about another 1% in additional fees paid to title and escrow, documentation fees, termite inspection, and more.
How long does it take for the property title to transfer after the closing date?: It usually takes about 30 to 60 days, depending on the terms of the contract.