Can a Retired Person Buy a Home in Hawaii?

Can a Retired Person Buy a Home in Hawaii?

I recently received a question from a person who was about to retire.  She wanted to know if she could buy a house if she was retired, or would she need to get a job and work for six months. Following is my answer:

It doesn’t matter if you are retired, in only matters what loan amount you are qualified for based on your retirement income.  I presume you have Social Security.  How about interest and dividend income??  A pension?

Email me at and I’ll send you a list of lenders on the Big Island.  Over the phone, or in an email, they can give you a rough idea what loan amount you qualify for based on your retirement income.  If you were in business for yourself, to get a loan based on your self-employment income, you need two years’ worth of tax returns; just don’t close down the business. If you plan on getting a job once you get to the Big Island, you only need two pay stubs from your new job to use that income toward your qualifying income.  All of your income will be taken into consideration when purchasing a home on the Big Island.

Can Canadians Buy Property in Hawaii?

Can Canadians Buy Property in Hawaii?

Absolutely!  There are no special restrictions on Canadians for buying property in Hawaii.  You just have to decide for yourself if the exchange rate is favorable.

If you want to make an offer on property to tie it up in escrow and take if off the market while you arrange to fly over, I can email you contracts in an electronically signable format; all you have to do is open the email, sigh in and click the places where you initial and sign  First you will have to inform me of the terms of your offer (offer price, down payment amount, names of signatories as you would sign a legal document, mailing address).  I will fill out the paperwork and email it to you.  

What you do is submit an offer with an inspection contingency and, if you are not paying cash, a financing contingency.  First, Buyer and Seller have to agree on terms and price.  Once they have both accepted and signed a contract, the contract and earnest money (usually $1,000.00 to start with) are deposited into an escrow account. You can wire the deposit to the escrow company. I will personally email the contracts to them.  At that time you must apply for your loan and order the home inspection.  The property is now effectively off the market.  You must apply for a loan within 5 days of the acceptance date.  At the end of the five days I will need a “pre-qualification” letter from your lender.  This can all be done by email while you are still at home. 

The most common inspection period is 15 days.  I usually know the day before if a contract is going to be accepted.  I then notify you to book your flight to the Big Island such that you will arrive at least three days before the inspection period is up.  You can then view the property and make up your mind.  If you decide you don’t like it then you can cancel the escrow account and get your deposit back.  Prior to your departure from the mainland you can also hire a professional inspector to view the property the day after your arrival.  If you decide you like the property when you see it, I can then give the professional inspector the go-ahead for the next day.  If you decide you don’t like the property I can cancel the professional inspection to save you the fee.  If you like the property and give the inspector the go-ahead, he will prepare a detailed report for you.  If you decide you are not happy with the inspection report then you can cancel the escrow account and get your deposit back.  During this inspection period you can cancel escrow at any time WITHOUT CAUSE and get your deposit back.  If you approve of his report, the inspection contingency is waived, and escrow proceeds to the next step which is the financing contingency.  Once your loan is approved the escrow proceeds to closing and the property is yours!  

You can also make your offer “sight-unseen”, in which case I would take photos and videos for you in addition to the report from the professional home inspector.

Custom List

In addition to the Daily UPdate broadcast email, I can also generate a one time Custom List of properties specific to your own personal set of parameters (criteria).

The Daily UPdate just goes back 24 hours to catalog the most recent real estate activity in East and West Hawaii.  In a nutshell, as new listings become available and listed properties sell, real estate agents responsible for those listings enter the data into a data base system provided by our Multiple Listing Service (MLS) provider, Hawaii Information Service.  At midnight, every day, the previous 24 hours is one UPdate.  The next UPdate begins at midnight that day and ends at midnight 24 hours later.  Every morning I compile the activity for the previous 24 hour period and send it out in an email to you.  That 24 hours of data only appears once, and does not appear on subsequent UPdates unless the status changes (like from Active to Contingent or Under Contract to Sold) during a different 24 hour period.

For the Custom List, however, I take parameters (“criterion” or the set of factors that describes your property preferences) that you provide me, and I use your parameters to compile a list of properties specific to your needs as you have defined them.  The properties on this list could have been listed yesterday or a year or more ago, but if they match the parameters you give me, and are still active (available for sale), they will appear on your Custom List.  The Custom List is a one-shot-deal; I don’t do one every day.  The best time for a Custom List is a week prior to your arrival on the island to view property.  In order for the Custom List to work you need to know if it’s land, homes or condos you are interested in.  For homes & Condos you need to know the smallest number of bedrooms and baths you could live with.  For land and homes you would have to know how much land would be the minimum you desire.   Most importantly, for all categories, you would need to know the maximum you would pay if you found the perfect property (you don’t have to spend the maximum, but if you tell me a number that is less than you can afford, you may miss the perfect match by just a few dollars and never know it).  Another important parameter is the location; where on the island do you desire to be (town or even neighborhood, condo project name, is best).  The Custom List doesn’t work if you can’t be specific about your needs and wants.  For instance, if you can’t decide between a house or a condo, the east side or the west side of the island, then it’s best just to continue to receive the Daily UPdate until you know exactly what you want; then ask for the Custom List. 

Once you are sure what you are looking for, then please send me your list of parameters in as much detail as possible and I will send your Custom Cist as time permits.  If you have any pressing questions that can’t wait, please call me on my cell, 808-989-3491.

Mahalo, Harry

The Origin of the Shaka

This is the traditional “Hang Loose” sign you flash on appropriate occasions; generally with a flip of the wrist or shaking back & forth motion. I can mean “right on brah!”, “no worries”, “that’s cool”, “be cool”, “relax, brah” and any other number of things depending on the situation. Like if someone stops to allow you to enter the highway from a driveway you might flash them the shaka and a way of saying “thank you”.  BTW, “brah” is a more modern contraction of the Hawaiian “Bruddah” which is pidgin for “brother”. What’s “pidgin”?

Back in the old sugar mill days a worker at the Kahuku mill named Hamana Kalili got the three middle fingers of his right hand cut off in a mill accident.  No longer able to work his job, the boss at the mill gave him the job of guarding the mill and facilities including the sugar mill train.  The mill and train cars were a popular place for kids to play, and the mill owners feared someone would get hurt; so there was an effort to keep the kids out.  Before there was a guard, the kids would sneak in through the cane fields and play around the mill half the night. After Mr. Kalili was put on as guard, it became a game for the kids to antagonize him and not get caught. So they wouldn’t have to yell a warning to each other (and reveal their location) when Mr. Kalili was approaching, they would mimic what his hand looked like, shaking their fist in the air with their thumb and pinky finger extended for the other kids to see.  The shaking motion is what gave the name “shaka” to the gesture.  True story.

Bill 108 and How it Affects Vacation Rentals in Hawaii

I had a long talk with Karen Eoff, the co-sponsor of Bill 108. A few things stand out. First and foremost for condo owners along Alii Drive, the bill exempts condos created under the Condominium Property Regime, as defined & governed by chapters 514-A and 514-B of the Hawaii Revised Statutes located within V, CG & CV districts (Resort) zones.  See my FAQ page for details.

Cost of Home Construction in Hawaii

I am frequently asked how much is cost to build a home in Hawaii. That is a very difficult question to answer because there are so many variables involved. The most basic variables would be square footage (house size) and quality of construction. Quality is the main issue. You might be able to build a kit home from one of the larger lumber yards like HPM or Honsador for between $150 to $185/square foot. This would be the most basic home with linoleum and carpet flooring, formica-type countertops, particle board cabinets, hollow Masonite doors, 20 year asphalt shingles, T1-11 siding and low cost fittings and fix rues.  From there the sky’s the limit. A low cost toilet might be $150.  But you can spend over $1,000 for some high end toilets. Solid wood cabinetry of all different types of woods are available at varying cost. Same with solid wood doors. There are even specialty brand-name door hinges available. Flooring can be laminate, real wood, ceramic tile or marble, etc. Countertops can be man-made solid surface, granite of all different colors and costs. There are dozens of types of roofing material all the way up to custom glazed ceramic tiles.  At this point you are well over $1,000/sq.ft. The only way to know for sure what your new home is going to cost is to get your plans drawn with a materials list and give them out to three contractors for bids.

Understanding Home Sales Statistics

When the National Association of Realtors or Zillow quote homes sales statistics, they are often listed as various categories without explaining what the categories are or giving a definition of the category they are listing.  So here are all the various categories and their definitions.

  1. Pending Home Sales. Tracks the sale of homes for which a contract has been signed but the sale has not yet closed escrow; that is, a contract has been signed by the seller & buyer, an escrow account has been opened to facilitate the sale, but the title has not yet transferred from the seller to the buyer (escrow has not closed).
  1. Existing Home Sales. The Existing-Home Sales data measures sales and prices of existing, already built, single-family homes for the nation overall that have already closed escrow; that is, the title has already transferred from the seller to the buyer. These figures include condos and co-ops, in addition to single-family homes. The data usually contains current sales rates, actual totals and median prices by month going back 12 months, annual totals for three years, and Includes all existing-home sales — single-family, condos and co-ops — rolled into monthly and annual totals.

You can find data for both of these at the National Association of Realtors website:

  1. Another category is New Home Sales. These are newly constructed homes that have closed escrow. Various sources compile data on new home sales and they are usually listed as monthly totals.  Here are several sources:

Another category that is also tracked by various sources is that of Building Permit Applications; that is, building permits applied for but houses not yet built.  The Census Bureau tracks building permits:


Do Condominiums Need to be Surveyed?

Recently I received this question: “Do Residential condominiums require a survey like gated community homes?”  The question actually requires answers on a couple of levels.  First of all, I have to assume the question is referring to the time when a condominium is being sold.  Hawaii is an escrow state; so we refer to that time period as “in escrow”.  For information on escrow, see my April 4, 2015 blog “Hawaii Property Purchase, Contract Status and Escrow”.

So I’ll rephrase the question thusly: “When a condo sells, during the escrow process, is there a contractual obligation on the part of the seller to do a survey?  Answer: No, condominiums do not need to be surveyed.  The property lines around the perimeter of a condo project will include all the common area, parking lot, pool, etc. and all the buildings on the land.  How would you survey an individual condominium unit within a building?  So no, condominiums are not surveyed when they sell.

Now I have to ask: “Why did the person asking the question think only residences in gated communities would need a survey”?  When single family residences, farms, raw land and the like sell, they are usually surveyed while in escrow.  But a survey is never actually “required”.  During a sale, a survey is an option a buyer can ask for.  The seller has to pay for it and they can refuse.  If the seller refuses, the buyer can pay for their own survey, but run the risk of putting out the money only to have the deal fall apart for some reason.  In situations where the seller doesn’t want to pay for a survey, I try to get them to do the survey and add the cost on to the sale price.  That way, if the deal falls apart, the buyers isn’t out anything and the seller has a survey they can use for the next buyer.

Home Inspection, Termite Inspection, Property Survey, Escrow Fees: Who Pays?


The standard Hawaii Information Service Purchase Contract used on the Big Island of Hawaii and Kauai has provisions for various inspections including your personal inspection, a professional Home Inspection, a separate Termite Inspection and a survey.  The question always is, “who pays for these inspections?”  While everything is negotiable, there are certain norms that everyone has come to except.

SURVEY.  Let me start with the survey.  Only residences and raw land are surveyed; condos don’t require a survey.  There are two ways to go about surveying a Hawaiian property you are purchasing.  First is a full survey.  In cases where there is a house on the property, houses on the lots next door, and the properties are surrounded by fences or rock walls, you will want a full survey.  The full survey will plot the position of the house on the lot, delineate the setback lines and map the location of fences and rock walls.  The Survey Report will state if there are any encroachments along the property lines or within the setbacks.  Setbacks are imaginary lines, set back from the property lines a certain number of feet, created by County Ordinance, wherein no structures are supposed to intrude (encroach).  Generally it is accepted that the seller will pay for this survey.  The second type of survey is called “staking”.  With a staking, the surveyor only marks the location of the property’s boundary pins.  Usually with raw land, a staking is all that is necessary.  The seller usually pays for the staking.  If there are rock walls and fences, and the buyer wants a full survey, then who pays is a matter of negotiation.  If a seller refuses to pay for all or a portion of a survey or staking, and the buyer is willing to cover the cost, I always suggest that the seller pay up front, and the buyer agree to credit the cost to the seller out of escrow at closing.  That way, if the escrow fails to close, the buyer hasn’t paid for a survey he can’t use and the seller now has a survey for the next buyer.

HOME INSPECTION.  The Big Island Purchase Contract allows the buyer unlimited inspections over an agreed upon period of time; usually 15 days (negotiable).  The buyer can inspect themselves and/or pay for any professional inspection they choose.  Property inspection companies have sprung up all over the country to fill this need.  There are dozens of them on the Big Island.  The buyer chooses the inspection company and pays for the home inspection.  If the inspection turns up something serious enough to cause the buyer to want to cancel escrow, they can do so without cause during the inspection period and get their deposit back.  However, the home inspector has to be paid by the buyer whether they decide do purchase the property or not.

TERMITE INSPECTION.  Of course everything is negotiable, but the Purchase Contract calls for the seller to pay for the termite inspection and treatment if needed.  However, the buyer can choose the company they want to do the inspection.  If treatment is required by the Inspection Report, the seller can choose the company to the work.  The seller is also expected to pay for any treatment whether it be spot treatment or a full tenting.  If the seller should refuse, then it becomes a matter of negotiation.  Treatment is only required if live infestations are discovered.  In Hawaii, the seller is under no obligation to repair any termite damage that may be discovered.

ESCROW FEES.  The method by which the escrow fees are divided are posted at the top of page 4 of the Hawaii Association of Realtors Purchase Contract.  Charged to the Buyer (if applicable) are 40% of the title insurance premium, cost of drafting the note and mortgage, cost of obtaining buyer’s consents, Buyer’s notary fees, 50% of the escrow companies fee, condominium or subdivision fees charged by AOAO (Association Of Apartment Owners) or HOA (Home Owner’s Association) to transfer their paperwork from the seller to the buyer.  Charged to the Seller (if applicable) are 60% of the title insurance premium, cost of drafting conveyance documents, cost of obtaining seller’s consents, 50% of the escrow fee, seller’s notary fees, cost of required staking or survey, recording fees to clear seller’s title, conveyance taxes and Federal and/or State withholding for any capital gains that may be owed.  Yes, you read that right, the seller pays for 60% of the cost of the buyer’s title insurance.