buying a home on big island
The process for buying our first home on Hawaii Island was a bit convoluted because we used conventional financing, with our mortgage people located on another island. And let’s just say they were not Dan Tharp quality from Sacramento. If I recall correctly, they also became inebriated on Christmas Eve and threatened to cancel my loan for no good reason. Then, they apologized profusely after sobering up the following day.
Buying a home on Hawaii Island is hard.
Some of the problems with buying a home on Hawaii Island are contained in the way agents do business on Hawaii Island and also in the purchase contract itself. For example, California used to be referred to as strictly a Caveat Emptor state for buyers, but the state fixed that attitude and its inherent problems. The California Residential Purchase Agreement definitely favors buyers now.
Not so in the wonderful state of Hawaii. Which suggests to me that builders and developers are running the state of Hawaii. Not a lot of protection for buyers in the purchase contract.
Now, we used a broker from another island when we bought our first home, so we did not much encounter the (odd to me) practice of agent limitations. Many brokers in Hawaii do not allow their agents to obtain signatures on a purchase contract until the agent’s broker approves the document. This applies to all paperwork, including attachments, addendums and counter offers. Some brokers take more than a day to review the paperwork. Do you see the dilemma? Nothing is signed by the buyers until the broker reviews. And he is surfing. Whatever.
The dilemma is some lucky buyer who has hired a real estate broker for representation (instead of an agent) could swoop in, present and snatch the house one desires before one has a chance to even sign the offer. Other dilemmas are contract verbiage itself.
Take the AS IS addendum, for example. Among other seller-centric things, this document states the buyer relinquishes all rights to sue the seller or sellers’ brokerage for just about anything except for failure to disclose material facts. That is insane. We’re not talking about arbitration. This is a release of legal rights to sue.
On top of this, there is no contingency of purchase form, according to our Realtor. There are so many variables to a contingency, I cannot believe they leave it up to the parties and agents to practice law, but they do.
In one counter offer, our agent inserted a paragraph stating the buyers (which are us) could lose our deposit if we defaulted, and then it pointed to the language which is reiterated in the contract. Why did she include that verbiage? Your guess is as good as mine.
It can easily take up to a week to write an offer to buy a home on Hawaii Island and negotiate it. You will also hear agents say things like, “I am just a messenger.” And maybe that is the main problem. They operate like messengers . . . so if it walks like a duck, quacks like a duck, I guess it is a duck. I would slap an agent in Sacramento who said she is just a messenger. NO, you are not a messenger. You are a professional Realtor with scores of experience and knowledge, and respectable negotiating skills.
A listing agent we encountered a few days ago took the icing on the cake when he asked us, “What would it take for you to write an offer today?” He has been in the business for 41 years, perhaps one year 41 times. What was that? Selling a house 101? Maybe he should sell cars?
His seller wasn’t much better. The seller followed us around saying things like, if you don’t like the fact that it sometimes rains inside the house, you could buy sliding glass doors from Lowes for $300 each. Yes, in 1968. Not today. After I asked pointed questions like why was the floor sloping toward the center of the house, he anxiously blurted: “Perhaps this is not the house for you!” Then he informed us the house needs a new roof, the pool resurfaced, and joists are breaking, and ended that disclosure with the fact maybe he should buy out his partner and keep the house.
Yeah, both the seller and listing agent talked us out of buying a home on Hawaii Island.
By the end of the showing, all desire to buy that house in North Kona had dissipated. It was probably a nice house, too, but the experience of viewing it was simply too exhaustive. Stay tuned . . .
— Elizabeth Weintraub
Getting a mortgage in Hawaii was dramatically different for me than obtaining a mortgage in California. As you may have guessed, what is precipitating this blog, we closed on our home in Hawaii on Friday. I don’t think the impact of that purchase has fully settled in yet, probably because I have a horrible cold after returning from our trip to Cuba and I’m thick in the middle of other real estate transactions for my clients that consume my time. But in retrospect, the biggest problems we encountered originated with our Hawaii mortgage lender.
The difficulties were not due to our loan application, income or credit. We have no skeletons in our closet. The lender said our file was clean as whistle. It was the lender. Now, maybe it’s just the way things are done in Hawaii, but I can’t imagine that every lender in the islands is as lackadaisical and whacko as the office we unfortunately had selected. It is absolutely no reflection on the individual who referred us to that office, either, I want to make that perfectly clear. But getting a mortgage in Hawaii was difficult and the processing was very unusual from the way it is done in California.
For starters, the mortgage loan officer continually advised me at inception that regulations for TRID could mess up or delay our loan. I am a top Sacramento Realtor. I am very familiar with TRID. I’ve been closing escrows that involve TRID since last October and, for the most part, unless the mortgage lender messes up or forgets to abide by the guidelines, they close on time. Using TRID as an excuse is, well, inexcusable. Many of the questions I asked the mortgage loan officer could not be answered. I was informed that loan processors do all the heavy lifting and mortgage loan officers do not have the answers to technical or difficult questions.
I had asked the mortgage loan officer to lock my loan but when I receive my loan estimate 3 days later, I discovered my loan was not locked. Again I insisted, and by this time, well, it was December 16th, the date the Feds raised the rates. So, the lender had to eat the difference. I had asked several other questions via email and received no response, so later that evening I inquired again, asking why I had not received a response to my earlier emails. The mortgage loan officer, whom we suspect had been celebrating the holidays a bit too much, sent a late-night email with a bunch of misspellings and threatened to cancel our loan. Out of the blue.
By morning, they were apologetic. We had 30 days to close and, unfortunately, we did not close on time. We could have closed early, however, if the lender had submitted our file to underwriting on December 24th. Instead, the loan officer sat on our file until January 5th. Maybe they closed the office? I don’t know. I could not follow up because I was on vacation in Cuba with very spotty internet.
We were in and out of underwriting in 3 days, and then the lender emailed our Closing Disclosure to the wrong email address, so we did not receive it on time. I won’t bore you with all the intimate details of other things that went wrong with our mortgage in Hawaii. The bottom line is we had a super easy file to close. If you’re thinking about getting a mortgage in Hawaii, you might want to allow for delays and just go with the flow, in case our experience is normal. But I hope it was just an odd chance of ending up in the wrong hands.