There are a few things you should know before buying Hawaii real estate in this type of transaction. The number of foreclosures and short sales on the market is lower now than it has been for many years, which means more competition to find your dream home!
Whether the home is still owned by the homeowner or the bank, all sellers are still going to look to maximize their profits. So, if you want to try this route, here are some key points you might want to consider.
Work with an experienced real estate agent. Since these can be complicated purchases you'll want a seasoned agent well versed in short sales or foreclosures.
Make sure your agent knows how to navigate a distressed Hawaii real estate purchase. Ask around and see if he or she can answer basic items about short sales or foreclosures.
Be patient. Finding a home and closing the transaction could take several months. It's best to wait for the right home rather than rush into something you might not like.
Check the market value of the homes around the one you like. Just because it’s a short sale, doesn’t guarantee you’re getting a deal.
Get a home inspection. A great price could mean the house might have serious issues, so have a licensed inspector check out the distressed property. Include a contingency clause in the offer in case the inspection reveals major defects.
Get personal. If you’re in a bidding war, and you probably will be, writing a personal letter to the seller about why you love this home could help tip the scales in your favor. We've seen this work from time to time.
Research liens and mortgages. Find out who is the primary lien holder and whether any other liens are on the title. Don't forget this critical step. You'll want to make sure you are buying a house from someone actually authorized to sell it.
Verify your financing. You may have less than a month to close once the contract is approved, so it’s critical that your lender has your financing in order.
Don’t put all your eggs in one basket. You may love the house you have made an offer on, but realize that until you sign the papers, it’s not a done deal. Keep looking so that you have a back-up in case something goes wrong.
To avoid disappointment, buyers need to be educated about the in-and-outs of buying distressed [city] real estate. Do your research and be prepared to be patient.
The most important part of finding and buying what you want is having a great agent behind you. If you would like more information on purchasing distressed properties, please call me.