Frequently Asked Questions
Here you will find answers to some of the most common questions we get from buyers and sellers. If you
have additional questions, please contact the appropriate department or individual, using our
Contact Us page.
Buyers FAQs:
- What do Leasehold and Fee Simple mean?
- Where can I find Hawaii County crime rate statistics?
- What does CPR mean?
- How do Big Island utility costs compare with the Mainland?
- What is the property tax rate?
- How do I handle pet quarantine?
- What about schools for my children?
- Where are medical facilities located?
- The temperature on the Big Island is 74 degrees all year, right? And what about rainfall?
- Where are the major shopping areas?
- How should I take title?
- What's the rental market like on the Big Island?
- How much does it cost to buy an average home on the Big Island?
- How much should I budget to ship my personal belongings?
- Which are the major lending institutions in Hawaii?
Sellers FAQs:
- How much time will it take to close the sale once we have an accepted offer?
- What should I do to make the property marketable?
- Why do I need a survey and why so early?
- What is this alphabet soup - FIRPTA and HARPTA - stuff all about?
- What should I expect to pay for closing costs?
- What marketing services do you provide?
- How much notice do I have to give my tenants when the house is sold?
Buyers Answers:
- What do Leasehold and Fee Simple mean?
- Where can I find Hawaii County crime rate statistics?
- What does CPR mean?
- How do Big Island utility costs compare with the Mainland?
- What is the property tax rate?
- How do I handle pet quarantine?
- What about schools for my children?
- Where are medical facilities located?
- The temperature on the Big Island is 74 degrees all year, right? And what about rainfall?
- Where are the major shopping areas?
- How should I take title?
- What's the rental market like on the Big Island?
- How much does it costs to buy an average home on the Big Island?
- How much should I budget to ship my personal belongings?
- Which are the major lending institutions in Hawaii?
Many buyers are confused by these terms. If you purchase a fee simple property, you own the land and the improvements upon it. Pretty standard. If you purchase a leasehold property, however, you are buying a lease for the land and, usually, you own the improvements. A residential leasehold might have been set for 55 years but if the ground lease is 30 years old, there would be 25 years left on the lease. Most banks require a minimum number of years remaining on the lease before they will agree to lend on the property. Some require that the lease be renegotiated with the ground lessor, often a family trust or large landholding estate. This can take more time than you expect and, in fact, lessors are not obliged to extend or renegotiate the lease. With all this, why would anyone buy a leasehold property? Because it is often less expensive to purchase and the lease is depreciable, which may have some tax advantages for you. As always, before purchasing any property, you should consult with your tax advisor and your attorney about how to protect your tax position and your estate.
Crime rate information can be found in the current County of Hawaii Databook, Section 4, Law Enforcement.
In Hawaii real estate, CPR stands for "condominium property regime" and is most commonly heard when referring to a number, the "CPR number", which identifies one condominium property from another for tax and sales purposes.
A single-family residence, for example, has a five number Tax Map Key (TMK) such as 3-7-3-10-10, which refers to a specific piece of land and everything on it. Because condominium ownership includes a percentage interest in the land with other owners, the Tax May Key has a sixth number, the CPR number. This identifies a specific apartment in a high rise or a portion of a lot when land is "condominiumized." Thus a condo TMK number looks like this: 3-7-2-15-15:103.
Electricity for residential use is currently 26.1 cents per kilowatt hour. Cost varies monthly depending on petroleum fuel costs. A single residential phone line costs approximately $25.95 per month, no frills. See Hawaii Department of Water Supply Water Rates downloadable PDF brochure for residential water costs.
Residential property tax rate is $9.10 per $1,000 of valuation.
| PROPERTY CLASS | Tax Rate Per $1,000 Net Taxable Building |
Tax Rate Per $1,000 Net Taxable Land |
|
|---|---|---|---|
| 0 | Affordable Rental Housing | $5.55 | $5.55 |
| 1 | Residential | $9.10 | $9.10 |
| 2 | Apartment | $9.85 | $9.85 |
| 3 | Commercial | $9.10 | $9.10 |
| 4 | Industrial | $9.10 | $9.10 |
| 5 | Agricultural or Native Forests | $8.35 | $8.35 |
| 6 | Conservation | $9.85 | $9.85 |
| 7 | Hotel and Resort | $9.85 | $9.85 |
| 9 | Homeowner | $5.55 | $5.55 |
We recommend you go directly to the source for this information. Here's the link to use: http://hawaii.gov/hdoa/ai/aqs/info.
As you would expect, there are public schools in or near each community. There are also many private schools. Because Hawaii's public schools have historically tested far lower than most Mainland public schools in academic achievement, many parents opt to enroll their children in private schools. Changes are being made in the public school system and you should allow time to investigate for yourself and decide which would be the better choice for your children. For local school information try the Hawaii Department of Education site and/or Education.com's School Finder.
The Big Island has hospitals in Hilo, Kamuela, Kohala, Ka'u and Kona. Additionally, medical clinics and physicians' offices are located in most communities.
The Big Island has everything from desert to rain forest. The following chart summarizes basic information regarding weather around the island. TEMPERATURES AND PRECIPITATION FOR SELECTED PLACES, HAWAII COUNTY
(Through December 2008)
| Average temperature 1/(F.) |
Extreme temperature of record(F.) |
Average annual precipitation (inches) |
||||
|---|---|---|---|---|---|---|
| Station | Ground elevation (feet) |
Coolest month |
Warmest month |
Lowest | Highest | |
| Hilo Airport | 38 | 66.4 | 81.2 | 53 | 94 | 128.53 |
| Hawaii Volcanoes Nat'l Park Headquarters | 3,971 | 52.7 | 69.2 | 34 | 89 | 109.06 |
| Naalehu | 800 | 65.8 | 79.4 | 50 | 93 | 48.01 |
| Kailua-Kona | 700 | 57.4 | 76.3 | 46 | 88 | 118.88 |
| Puako 2/ | 5 | 68.3 | 83.8 | 52 | 92 | 9.09 |
| Waimea (Kamuela) |
2,670 | NA | NA | 34 | 95 | 49.77 |
| Honokaa | 1,080 | NA | NA | NA | NA | 79.57 |
| Mauna Kea Summit 3/ |
13,796 | 31.3 | 42.5 | 11 | 66 | 7.36 |
1/ For some stations, data present 30-year normals.
2/ Temperature data are for Mahukona.
3/ Based on incomplete and non-continuous data for 1966-1972. Source: Hawaii State Department of Land and Natural Resources, Commission on Water Resource Management, records; Hawaii State Climatology Office, Department of Meteorology, University of Hawaii, records; and Hawaii State Department of Business, Economic Development and Tourism.
For general shopping of all sorts, Hilo offers the most choices. Prince Kuhio Plaza, a regional mall, and Kopiko Plaza are located in Hilo and are tenanted by both national chains and popular Hawaii retailers. Kailua-Kona, however, boasts some of the favorite shopping places for residents - the old standbys: Wal-Mart, Home Depot, Lowe's and Costco. Many smaller communities are home to specialty boutiques and art galleries and discovering what's tucked away in each is an adventure well worth the effort. For major shopping on "shop till you drop" excursion, many Big Island residents trek to Honolulu where shopping has become a minor art form.
Our company policy is to give you all the information you may request about the various ways in which title can be held but not to offer advice to you on this matter. Because of the implications for your estate and tax status, we urge you to discuss this question with your tax advisor, attorney or estate planner.
Tight and likely to remain so for some time. For details, go to the Rentals section of this web site where you will find a brief description of market trends and a "Hot List" of available properties which is updated weekly.
Housing costs vary greatly from community to community on the Big Island, as they do on the Mainland. The best way to get an idea of current property costs is to browse through the Property Search section of this web site, exploring different locations as you go. You'll be able to see everything that's presently for sale through the Multiple Listing Service.
Your best source of information is in your home community. Contact a reputable moving company for estimates and delivery dates. Many such companies now have their own web sites and you may be able to get some helpful tips for pre-moving preparation.
Bank of Hawaii and First Hawaiian Bank are the largest banks in the state. Other well-established institutions include American Savings Bank, Central Pacific Bank, City Bank, Hawaii National Bank, and Territorial Savings.
Sellers Answers:
- How much time will it take to close the sale once we have an accepted offer?
- What should I do to make the property marketable?
- Why do I need a survey and why so early?
- What is this alphabet soup - FIRPTA and HARPTA - stuff all about?
- What should I expect to pay for closing costs?
- What marketing services do you provide?
- How much notice do I have to give my tenants when the house is sold?
We normally estimate 45 and 60 days for closing but, frankly, there is no such thing as a "normal" escrow. Each property and each sale are unique. If there are time-consuming conditions to the contract, it will take that much longer to close and record the transaction. We recommend that you discuss this matter with your broker when you are considering offers to purchase, especially if "time is of the essence" and you must meet deadlines of your own outside of escrow, such as moving or purchasing another property.
In general, a property that is clean, well-maintained, and in good order is most attractive to a buyer and brings the best price. Your agent will be able to help you identify specific issues that should be taken care of before marketing begins. In the meantime, there are some simple things you can do to help get a good price. Start by looking at your property through a buyer's eyes and you'll see what we mean: remove unnecessary furniture and stored items, eliminate clutter, get the landscaping in good shape, and re-paint where needed. This will make a prospective buyer's first impression a positive one. If you are not able to take on major repairs prior to listing, be realistic. Expect to receive a somewhat lower price for the property and reflect that in your listing price. And remember, some buyers look specifically for properties where they can invest "sweat equity" rather than paying top dollar so don't be discouraged if you can't do everything you'd like to bring the property to mint condition. Your buyer may be looking for exactly what you have to offer.
Surveys are a standard part of every real estate sale. They protect the buyer's interest by defining the exact position and size of the property he is buying and assuring him that there are no encroachments or boundary problems. The survey is conducted early so that, should problems arise, they can be resolved in a timely manner and not unnecessarily delay the close of escrow.
FIRPTA (Foreign Investment in Real Property Tax) and HARPTA (Hawaii Real Property Tax Act) relate to tax payments due from sellers who are not residents of the United States or of Hawaii, respectively. FIRPTA "requires that if the seller is a foreign person, the buyer must withhold 10% of the amount realized by the seller to cover any seller tax liability. Residences below $300,000 that are going to be occupied by the buyer are exempt from this provision." HARPTA "requires every buyer of Hawaii real property to deduct and withhold from the non-resident seller's proceeds, 5% of the gross amount realized on the sale to be applied to any Hawaii income tax due from the seller with regards to the sale of the property. A buyer would be exempted from this requirement if the seller furnishes the buyer with an affidavit stating that the seller is a resident (includes resident aliens), together with his taxpayers identification number..." [from Vitousek et al, Principles and Practices of Hawaiian Real Estate, Honolulu, HI, 1995.] Because of the strict deadlines and penalties associated with these laws, your agent and your escrow company will make sure you are fully compliant.
A good rule of thumb is 2% of the purchase price. The items usually paid by the buyer and by the seller are listed in the standard terms of the sales contract. Additional items may be negotiated as special terms of the contract. Individual situations can differ substantially, depending upon variables such as the level of market activity, the condition of your property and your motivation to sell. Your agent will give you a fairly close estimate and will work to make sure you are paying a fair price for the services provided.
A well-designed marketing plan is essential for a successful real estate sale. When you list with Clark Realty, we leverage our established industry network to promote your listing and work closely with you to create a marketing plan that integrates traditional print, direct mail and email campaigns with an effective digital marketing strategy. Our goal is to get your listing in front of as many qualified buyers as possible and to showcase your property in the best possible light. Clark Realty has an exceptionally qualified, dedicated and professional sales team whose primary focus is the successful sale of your property. If you have additional questions about placing your listing with a Clark Realty agent, please visit our List With Us page or contact one of our five Big Island offices for more information.
That depends upon the kind of lease your tenants have. If they occupy the property under a fixed lease, the lease expires on the date specified, regardless of who owns the property. In other words, a fixed lease survives escrow and the buyer of your property must honor the terms of the lease until it expires. Clearly this is a fact that requires early and full disclosure to prospective buyers. If your tenant is on a month-to-month lease, you are required by the Hawaii Landlord Tenant Code to give 45 days' notice to vacate. Once notice is given, the tenant may vacate at any time prior to the 45th day, without penalty. Therefore, you'll want to time your Notice to Vacate carefully or you may find yourself missing the rental income you had expected. This gets especially tricky when closing is delayed and the property is sitting vacant. We recommend that, before you enter into a lease with a new tenant, you think carefully about your long-range plans for the property. If you have specific questions about your property, we invite you to visit our Rentals page and e-mail our Property Management Division for more information.
