Buying Information

A Realtor® pledges fidelity to clients, but also pledges to treat fairly all parties to a real estate transaction. A Realtor® is knowledgeable about various aspects of the real estate profession and maintains current information regarding market conditions. Realtors® have an affirmative obligation to serve property owners and prospective buyers to the best of their ability.

A Realtor® is the recognized professional in real estate. The distinctive Realtor® "R" is your guarantee that you are dealing with the elite of the profession, a member of an association of Realtors®, a professional who deserves your trust: a Realtor®. Marcus & Associates, Inc. and all of our agents are Realtors® and Realtor Associates®.

• Neighborhoods
  How clean are the streets? How's the property upkeep in general? Are there streetlights? Sidewalks? What's the noise level? Is there industry nearby – or train or airplane traffic? Do you notice any unpleasant odors from some unseen source?
• Conveniences
  Is public transportation within walking distance? Are thoroughfares or expressways accessible? Are there opportunities to attend sports events, cultural affairs, adult education? Are there parks, trails, places to swim, boat, skate, and play golf or tennis nearby?
• Distances
  How far to work from each house? How far to shopping, schools, hospital, places of worship, and entertainment. How far to a fire station? How far from friends and relatives?

• Consider destinations. Where will family members go most often from this new location? How easy is it to reach those places from here? How accessible are schools, churches, grocery stores, medical care, public transportation, shopping malls, and neighborhood services?
• Check around the clock. Is rush hour traffic a problem? What will be the impact of special events like local high school games or church picnics?
• Crash test the driveway. How easy is it to get into and out of the driveway?
• Be service conscious. What utilities serve this property? Do you want an all-electric house, or do you want gas? Where will you get your mail? Where are the easements?
• Dig below the surface. Is the soil stable? Is part of the property on a flood plain - if so, what is the history of floods on the property?
• Visit the neighbors. How will you fit in with the neighbors? Do people seem to be friendly? Are houses well-maintained?
• Read the fine print. If the community has special by-laws or architectural controls over changes to a house, what are the pros and cons?

Make a list of the positive and negative aspects of each property as you tour it. Assign priorities to important elements of the house's location.

Conversion of leasehold property to fee simple ownership involves purchasing the landowner's remaining interest, called the leased fee interest. The lessors of many, if not most, leasehold properties are currently offering to sell their leased fee interests to their lessees or prospective buyers of a leasehold property. There is a State of Hawaii law and a City & County of Honolulu (Oahu) ordinance affecting the mandatory conversion of residential leasehold properties.

The fee simple owner of the leased property is said to have a leased fee interest in the property.

Here are some tips:

• Ask your agent for comparables. To determine a fair purchase offer, ask your agent to prepare a written comparative market analysis showing the sales prices of similar neighborhood homes that sold recently and the asking prices of comparable homes currently on the market.
• Compare the details. To calculate your best offer, compare the features of the home that interests you with the features of similar homes that have sold recently in the same neighborhood.

Comparable sales information helps you to determine a base price range for a particular home. Adding in the various factors like property condition, improvements, market conditions, and seller motivation help determine whether a "fair" price would be at the upper limit of that range or the lower limit. Perhaps you will feel a fair price is outside of that price range.

The "fair" price should be approximately what you are willing to agree on at the end of negotiations with the seller. The price you put in your offer to begin negotiations is totally up to you and depends on your negotiating style. Most buyers start off somewhat lower than the price they eventually want to pay.

Although your agent may provide advice and guidance, you are the one who makes the decision. The price you put in the offer is totally up to you.

The earnest deposit could be several hundred or even several thousand dollars, but usually no more than 5% of the purchase price. If the buyer's contract is not accepted by the seller, the money is returned to the buyer.

Escrow orders the title evidence, has the documents prepared, draws up closing documents, arranges for the signing of documents, records and disburses funds to all concerned. Escrow is responsible for being sure that no title defects have occurred since completion of the title search by ordering an update just prior to recordation. This is a significant protection for the buyer.

No matter how urgent the need, never expect escrow to close without a necessary signature. No funds are disbursed until all documents are signed and recorded.

While there should be no risks in transferring property, risks do exist. Many "hidden" hazards to property ownership may show up unexpectedly in connection with your property. Any one of them could mean a costly loss or require time. Title insurance can help eliminate these risks. It protects you from damages and expenses incurred because of possible title defects such as: confusion from similarity of names, forged documents, signatures of minors or mentally incompetent persons, mistakes in recording legal documents, undisclosed or missing heirs, fraud, invalid divorces, misrepresentation of marital status, unpaid taxes, clerical errors in public records, or wills not probated.

Before a policy is issued, the title company conducts a search of public records, maps and documents concerning the real property in question. Once the facts about the property and people affecting ownership are collected, examined and interpreted, the company issues a title policy insuring the condition of title. When a title insurance company issues your policy it is saying that you are assured that your property is protected by their policy subject only to its terms. If a flaw in title should be discovered, the title company should defend the title as insured at its own expense and should correct or clear the title, or should pay any loss incurred.

A one-time only premium covers the entire cost so long as ownership remains in your name or that of your heirs. The policy is issued in an amount equal to the purchase price of the property. Of course, the greater the coverage given under a policy, the higher the premium charged.

There are two kinds of title insurance - a lender's title policy and an owner's title policy. To protect their interest in your property, mortgage lenders require buyers to purchase a lender's title policy. But a lender's title policy doesn't protect your interest as the homeowner.

Protection of your property ultimately rests in the financial stability, professional integrity and responsible management of the title insurance company that you request to insure your property. Protect yourself against loss due to title defects by insisting on an owner's title insurance policy.

• Electrical - Check receptacles in all rooms for proper grounding, and note the hazards found.
• Roof - visual inspection of roof covering condition and defects. Inspect skylights, flashings, gutters, chimney shaft and damper operation. Inspect chimney spark arrestor, cap and hood.
• Attic - check accessible underside of roof covering for water penetration, visible wiring hazards, ventilation, insulation and skylight chutes.
• Water Penetration - check all interior ceilings, walls and baseboards.
• Plumbing - shower, bathtub and sink drains, commodes and components, hot and cold water plumbing, tiles, grouting, water penetration and faucet operation.
• Air Conditioning - check all central A/C systems and wall units for function and operation; check all supply and return vents for correct operation. Checking of wall or window units are usually not part of the inspection.
• Heating System - check all central heating systems and wall units for function and operation; check all supply and return vents for correct operation.
• Appliances - thoroughly check each built-in appliance for component operation, proper electrical grounding, major defects in operation and control. Although checking of appliances is not required by the American Society of Home Inspectors (ASHI), many inspectors will include appliances. However, proper electrical grounding is not checked if the outlet is not accessible.
• Hot Water Heater - inspect for lower cabinet leaks and signs of rust.
• Swimming Pool/Spa - filter and circulation pump, surface plumbing leaks, sweep, pump, ladder, diving board, lighting and gauges. (Usually, not done by home inspectors, but by swimming pool specialists.)
• Sprinkler Systems - Check sprinkler heads and pump operation.
• Security Systems - This is not included in the home inspection.

The cost of a building inspection varies depending on the square footage and amenities and not on the sales price of the property. This inspection is based on the professionalism of the individual inspector and may vary from one representative to the next. You should call the inspector to confirm exactly what he will be checking during inspection. The protection you gain from a building inspection is merely another layer of support that can prevent you from making a mistake when purchasing real estate.

Often times the appointment for the signing of the conveyance documents is mistakenly referred to as closing.

Typically you will be working with an escrow officer who will coordinate the details for you. The escrow officer will begin with information in your contract and will have a search done on that property. It will cover things such as outstanding mortgages, liens, restrictions and easements as well as the rightful owner of the property. The title commitment or preliminary report will also show what kind of documents will be needed for the title to pass to the buyer properly.

The escrow officer will arrange to get the necessary information needed to prepare the closing papers. If a new mortgage is being obtained, the escrow officer will work closely with the lender to meet the lender's requirements as well as the requirements to assure proper transfer of title to the buyer. In addition, things such as homeowner's associations, condominium associations, termite inspections, surveys and homeowner's insurance policies will be considered.

The buyer and seller will both be advised of things they need to do during the time of this processing. If the seller needs to make his home available for an appraisal or an inspection, he will be required to respond. The buyer will need to be sure to get everything to the mortgage company that they request, or there could be delays.

Prior to closing, the buyer will be advised that a Hawaii drawn cashier's check, or wired funds in a certain amount will be needed to pay off closing costs associated with the transfer of ownership. The seller will be advised of the amount of his proceeds from the sale of his property.