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Frequently Asked Questions
Q.
I just moved to Maui and I wonder whether I should buy a place or
rent.
A. One
of the advantages to renting is not having to worry about
maintenance and other financial obligations of property ownership
including the cash outlay that you must initially make when you
purchase. However, when you buy a home there is the possibility that
you could sell it later for more than you bought it. This
possibility of course, depends on the market appreciation at the
time when you decide to sell. If you cannot time your sale when
you want to, you may have to sell your property at a loss. Home
ownership also brings with it maintenance headaches and loan costs
beyond what renting costs. But unlike renting, home owners who
obtain a fixed-rate loan can establish their monthly housing costs
and do some wise financial planning. As home owners know, owning
your own property brings a lot of satisfaction and enjoyment. Before
any home investment is made, however, a thorough consideration must
be made of the community where the home is located and the needs of
the family who will live there.
Q.
My home that I bought a few years ago has become too small for my
family. Should I add on or look for a new house?
A.
There are always homes on the market that will tempt you to move to
a new home to satisfy the growing needs of your family. The major
considerations as to what route you take depend on the following:
How much money is available to you either with a home improvement
loan or cash
- Will the
building ordinances allow you to add on to your present home as
you would like
- Would the
structure and design of the present home allow for the desired
expansion
- By adding on to
the home are you creating a value that is beyond that which can be
obtained if you decide to sell it
- Are there other
properties available that will fulfill the increasing needs of
your family located in neighborhoods that will accommodate your
work, school and recreation considerations
Once you answer these questions you will be better able to make a
decision as to whether you can in fact remodel and satisfy the
growing needs of your family or whether you should look for a new
home.
Q.
We have just started to look for a home and most of the houses that
we see are so tiny and not what I had in mind at all when we moved
to Maui. My husband says that we have to start somewhere. Is he
right?
A.
Getting started by buying a home smaller than you had in mind may be
a good way to take the first step into home ownership as long as you
keep in mind the basics. Is the home in a community where you want
to live and convenient to your needs: schools, shopping, commute,
and so on? How much will it cost to make the house livable to your
standards? How does the price of this home compare to other homes
that are like it in the neighborhood? For most people their first
home will not be their last but rather, a stepping stone to their
dream home. An experienced real estate professional can show you
homes in your price range and through careful research, you can make
a wise choice.
Q.
How important is a home inspection when I am purchasing a home on
Maui?
A.
Without a doubt a home inspection is one of the most important
things that you should have done before you make a decision as to
whether you are going to purchase the home that you have selected. A
professional home inspection is an objective visual examination of
the physical structure and systems of a house, from the roof to the
foundation. Through the inspector’s report you can find out whether
there are repairs needed and what maintenance is required to keep
the property in good shape. This will give you the confidence to
make the decision about buying the property. In Hawaii, if you
request it, you have an opportunity to ask for a Home Inspection and
make a decision after a thorough inspection of the property whether
to continue with your purchase or cancel the purchase.
Q.
Where I come from there are hardly any condominiums but in Hawaii I
notice that there are many. I have always lived in a house and never
in an apartment. What should I consider if I decide that I might
want to buy a condominium?
A.
If you have only lived in a house and not in an apartment living in
a condominium is quite an adjustment. Depending on the size of the
condominium development, you may be living very close to hundreds of
strangers and sharing a common wall with another family potentially
dissimilar from yours. On the other hand, in a place like Hawaii
where land is so limited and views and oceanfront property so
desirable, you maximize your chances of being able to capture those
amenities if you elect to purchase a condominium. Be sure that you
read through your rights as an owner of a condominium before you
purchase by reviewing all the condo documents including the
Declaration, CC&R’s, By Laws and House Rules, among others. You ask
for these when you make an offer to purchase a condo. You should
decide whether you are going to live there all the time or whether
you want to rent it out and stay in it on vacations in Hawaii. There
are strict zoning laws that govern what can be done where. You will
rely on your real estate professional to inform you as to what is
allowed where you intend to purchase. Be sure that you consider the
maintenance fee which is also charged by a condominium for the
upkeep of the common elements. You should add that as a cost to your
mortgage and property taxes of payments that you must make when
buying a condominium.
Q.
How do I know how much I can afford to pay for a house?
A.
You should talk to a lender whom you trust. Ask your Realtor ® to
take you to see a lender who can look at your income and expenses as
well as how you handle credit and prequalify you for a loan or even
pre approve you for a loan before you even go out to look at
property. There are other factors which enter into how much of a
loan you qualify for but these are the most important.
Q. How
much is the closing cost for buyers and sellers? What does closing
cost mean?
A.
Closing costs are the costs that are associated with closing the
transaction such as the cost of obtaining a loan, the fees charged
by escrow to do the title search to make sure that the buyer
receives clear title and other costs some of which the seller will
pay and some of which the buyer will pay. These are all added up and
the buyer and seller both pay their share of these costs, depending
on who is supposed to pay it before the property changes hands at
closing. So the buyer must expect to pay closing costs in addition
to the down payment requirement in order for him/her to get a loan
and the sellers must expect to pay closing costs which will be
charged to them and subtracted from the amount that they are to
receive from the buyer. I know that it sounds a little complicated
but escrow gives both the buyers and sellers an accounting of all
the expenses and credits so that each knows how much they are
charged. Closing costs are typically between 2%-5% of the mortgage
amount.
More...
Carol Ball
Inc. dba
Carol Ball and
Associates
RB 11347
Maui Mall
70 E Kaahumanu Ave Ste A6
Kahului, HI 96732-2176
(808) 871-8807 • fax (808) 871-2462 •
info@carolball.com
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