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Hawaii Real Estate Terminology Explained (Big Island)

I see lots of real estate scam postings on Craigslist, so I decided to post this. Don't ever buy a property without getting a Warranty Deed, and don't ever buy a property without new Title Insurance. Contrary to popular belief, an attorney will not give you title insurance, so always use an escrow company. (Buyer Beware! Good luck finding a title company giving you title insurance on properties previously purchased at a tax sale! Also note that by law, the original owner has a one year redemption time to buy the property back!) Be careful about claims like "appraised at", nobody is going to spend hundreds of dollars to get the low priced properties appraised, and a property tax assessment by the County of Hawaii is NOT an appraisal!

Learn the difference between Fee Simple and Leasehold. With the latter, you don't really buy a property, you buy a lease, and when the lease is over (Expiration Date) you most likely are out of there. There are periodic increases in the lease too. It's called RENEGOTIATION DATE, and it's unknown what your new lease payment will be until the next RENEGOTIATION DATE.

Check with HELCO (local electric company) to make sure the "power on the street" or "power nearby" really means power is available for the property, and it's not on SSPP (Special Subdivision Power Policy), which could add thousands to your purchase price. A "water spigot at the highway" doesn't mean there is county water available in the subdivision. "Surveyed years ago" means nothing, not to mention the huge difference between survey and staking. Educate yourself on the difference, you will be glad you did.

Hawaii Revised Statues Chapter 508D requires the Seller to disclose all material facts about the property to the Buyer in writing. It's a 14-page document, don't buy anything without receiving it.

There is only one company giving you insurance in Lava Zone 1, HPIA. It is very expensive, and do not cover lava. (There is no such a thing as "lava insurance"). Insurance is not much cheaper in Lava Zone 2 either, so do your research homework. (Unpermitted and/or not up to code structures will not be insured by any insurance company.)

Some people advertise properties using catchy company names, but the "company" is neither registered with the DCCA, nor licensed by PVL. Check with the DCCA before doing business with these "companies."

People offering "cabins" and "shacks" and anything "unfinished" with seller financing are doing so because they most likely were built without permits, and are not up to code, so the banks wouldn't touch them. You will have the same problem trying to sell them. People offering cheap land with an "Agreement of Sale" actually have no clue what an Agreement of Sale really is. The same with "rent-to-own" ads. (Why would anyone rent an overgrown vacant parcel is beyond me.) "Cash Sale Only" actually really means the property would not appraise and the seller is asking more than the real value is, or no financial institutions would loan on the property because of issues. (Just remember, banks want your money, and if they deem a property a worthless collateral for a loan, then so should you.)

Don't be fooled by any area called "Estates"! There are no "estates" in the Puna and Kau Districts. It was a marketing ploy by the developers originally selling those lots. (Many were sold on late-night TV shows to unsuspecting mainland buyers.)

Most importantly, if you are just willing to send money to anyone unknown and buy any property transferred to you by a Quitclaim Deed, and with the sale being recorded at the Bureau of Conveyances ONLY after you paid off the land then I have some ocean front properties for sale for you in Arizona too! (They might even come with a bridge too!) :)

Last but not least, I have ran across of listings when people were trying to "sell" properties that they didn't even own! Be careful prospective buyers, Craigslist is not always your friend!

PS. I am not a real estate agent/broker, and I have no vested interest in posting this at all. I'm just trying to help the unsuspecting and less knowledgeable. The scammers are advertising properties for way much than they are worth on Craigslist. Talk to a reputable broker to find out what properties are really selling for in any particular area. You will be glad you did.

post id: 7756052237

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