Kailua Kona Real Estate Blog

Aloha Friends, do you want to know the top 5 mistakes we see people continually make when buying a home here in Kona Hawaii

We are Stephen Proski and Therese McCarthy with Compass Hawaii and Real Estate Kailua Kona.

Yes, you may have purchased homes before on the mainland or this may be your first time buying a home: we are here to tell you…….things are a bit different in Hawaii. We want to provide information and make sure you are aware of some items particular to Hawaii. And, the mistakes we often see…..so you can avoid them and have a smooth real estate purchase when the time is right.

Okay, so let’s jump into this subject.

 The 1^st mistake buyers make when trying to buy a home here in Kona is not having a budget.  Yes, they are very excited with the possibility of purchasing a slice of paradise here in Hawaii, but they don’t have a budget and prices here are not the same as they maybe on the mainland. Prices for homes here in Hawaii are very expensive. 

Whether a single-family home or a condo, prices here are much higher and there maybe additional cost like insurance, utilities or steep HOA fees to name a few that could impact your buying power.

Our electricity costs are the highest in the country and can add an additional $500 to $700 dollars per month to your monthly budget. Also you will need to get hurricane insurance on your property along with personal property insurance that could adversely impact your monthly costs. 

The 2nd mistake to avoid is;  if you are getting a mortgage, we strongly recommend you get prequalified with a lender before you even start shopping online at places like Zillow, Redfin, Realtor.com or even our website.  Since Hawaii real estate is different than the mainland, we also recommend using a Hawaii mortgage lender versus a mainland lender because there are factors here, such as lava and tsunami zones that a mainland lender will not be aware of and may not be able to fund your loan.

Yes we have seen this happen many times in the past.

You may think you know what you can afford, however the type of home you may be living in now, will cost you much more money here than maybe you want to spend. 

Unlike the mainland where you have plenty of properties to consider when buying a home, we don’t have a large supply of inventory here, especially new construction.  We have seen people lose out on properties by not having a prequalification letter in advance.  Yes, they find a home they want and have to scramble to get prequalified and by the time they get that done, the property they fell in love with is gone.

With a limited supply of inventory, you will need to be prepared when those properties come available so that you are ready to purchase and not have to wait to get prequalified. 

The 3rd mistake you want to avoid when buying a home here in Hawaii is not having representation and attempting to do the transaction by yourself to save money.

With all the house hunter shows on TV, we’ve seen a number of buyers think they don’t need a Realtor to represent them and go directly to the listing agent thinking they will save some money and get a deal.

Well friends this strategy does not work very well.  The listing agent works directly for the sellers and only represents them.   The listing agent will not share with you comps or other pertinent information that can help you decide a fair market value nor can they advise you on how to navigate our purchase contracts.  Matter of fact the only thing they can do is write your offer and present it.

The real estate industry had a major change this past August where sellers don’t even have to pay a buyer’s agent commission or provide any concessions to the buyer if they so desire.   You might not be aware of that change and you may not even be aware that when buying a property now and using a Realtor, you must sign a Buyer Representation Agreement and there are some interesting new procedures with this item as well.    

We suggest you watch our video

Make sure you do your research on the community! If you are not familiar with the communities here or condo complexes, you could be falling into a money pit like one of our clients experienced a few years back before they were our client.  They purchased a condo on their own and after they closed on the property they found out about a $25,000 dollar assessment on their unit that the listing agent did not advise them about.  So before you go down this road on your own to save a few dollars think twice and Buyer Beware!

The #4 mistake you don’t want to make when buying a home in Hawaii is not getting a professional home inspection.  By far, this is a huge mistake we have seen way too often, not by our clients because we always recommend our buyer’s get a home inspection.

We have heard many horror stories from new clients of ours or from other agents in our office about buyers purchasing properties without getting a home inspection because everything looked good to them and they wanted to save $500 dollars But, this mistake cost them thousands of dollars after they closed on their property.

A professional home inspection will not only inform you about the things that are wrong and need repairs, but will also give you a good snapshot on your property from top to bottom pointing out just about everything you need to know about warranties, recalls on appliances, estimated life expectancy of your roof and other valuable items worth knowing about.

The home inspection will also point out deferred maintenance items that you should be aware of when purchasing a property on an island in the middle of the Pacific Ocean. With the sunshine, salt and sea air, properties will deteriorate quicker and the home inspector will make you aware of those things.

Think of it also as a home “check up” you are considering purchasing, similar to your annual physical.  The home “check up” shows the current status and identify potential problems before they become serious and informs you of preventative care and potentially saving money in the long run.

In addition, We see a good number of properties being sold here with unpermitted additions and not specified in the multiple listing service descriptions.  A home inspector will definitely point the “Unpermitted” items out as well and advise you of the concerns on unpermitted additions to a property.

The last, but not least #5 mistake we have seen buyers make when buying an “investment property” is: accepting the Listing Agent’s rental history and information as factual.

There are a good number of short-term rental properties being sold here and investors are accepting the rental history directly from the listing agent and think those numbers are correct.  Unfortunately, we have seen this problem occur too often here. So, if you are buying an investment property you want to make sure you have real facts.

Are the rental income information provided using sources like Quick Books or are they hand written on a spread sheet?

When working with investor clients we will always contact our property manager resources to get real numbers and area specific rental projections along with vacancy rate projections as well.

Our rental market fluctuates up and down seasonally and we have seen investors rely too many times on just the sellers rental history and then they find out after the fact those numbers are not real. 

Hope you have a great week and we look forward being your trusted real estate professional in the future

Mahalo