Hawaii Realty International

Buying a Short Sale Property in Oahu 

Short sales have become much more available as the demand for home owners going into foreclosure seek out other options. When a home owner is facing financial hardship through a job loss or a medical crisis that creates a situation where they can no longer pay their mortgages they may seek out the option for a short sale before their home goes into foreclosure. A short sale will be beneficial if the home owner is unable to sale their home for a price that will pay off their entire mortgage, second mortgage, closing costs, or liens that have incurred from the property. 

 

Short sales can be beneficial to home owners who need to get out of their mortgage, but there are things that may not benefit a buyer who makes an offer on the home. For people looking to buy a short sale home they will need to understand what they are getting into first. Many people believe that buying a short sale home would be better for them because they are much cheaper than homes on the regular market. They are cheaper than homes on the regular market, but there is a lot more involved in the short sale process that is not involved in a regular mortgage buying process. 

 

Disadvantages of a Short Sale for Buyers 

 

When a person decides to make an offer on a short sale home, they will need to understand that they will be much more limited when buying a home in this way. If the home owner accepts a buyers offer, the short sales agent or lender could make a counter offer, or deny the offer altogether. Other concerns are that the lender could reject the offer on the actual closing date. This could put a buyer in a bind if they have already made plans with the place they were previously living in. If the buyer has put out any costs to the home before the transaction is settled, they could lose those costs. So home buyers who are wanting to buy a short sale home will need to keep these concerns in mind throughout the whole process because anything can change at any time. 

 

Short sales also take a lot more time to close than normal mortgage transactions. It can take from three to six months to actually close. During the process the escrow of the home can change due to market fluctuations. This is something else to keep an eye out for because the monthly payments could end up being raised if the interest changes during escrow. Another concern is that the home owners want the best price that they can get on their home so that the lenders will not reject the offers. This could mean that there will be several offers on the home before one is actually chosen. A home buyer could be left on tender hooks during this process. The next big concern is that the new home buyer will need to have the money for the closing costs on the home. The home seller will not be responsible for paying their own closing cost during a short sale. The home buyer may need to pay costs on the fees for the title, reports for termite problems, property taxes that have been pro-rated, and recording costs. There is also a chance that the home can still be foreclosed on by the lender through the short sale phase. There will be many small details that a home buyer will need to check on periodically to keep their investment safe. 

 

Once the home buyers offer has been accepted it is a good idea to close on the home as quick as possible so that no sudden mishaps can come along. Two weeks is the best time to close on the home, or more costs can be added on per day that the home is not closed on. The new home buyer will also need to make all of the necessary repairs to the home. The home seller will be selling the home as is. It may be a gamble for the home buyer to pay for inspections on the home before they buy it, but it also may be a necessary gamble. If the home has more repairs than what the person can afford, they may need to pull out of the deal. 

 

When buying a short sale home there are many more disadvantages than there are advantages. Even though a buyer may be getting a better deal on the home than they would a regular priced home, the headaches can sometimes make the effort not worth it. The costs that can incur during the short sale process can be detrimental to a home buyer if the lender rejects the persons offer. The buyer may feel that it is to risky to spend any extra money on inspecting the home first, yet they could be putting themselves more at risk if the offer goes through and they find that the home has large amounts of damage that was not detected in the beginning. The home buyer has no leverage when negotiating with the home owner. The home buyer can also still lose the deal in the end if the lender decides to reject the offer at the last minute. A home buyer will need to be knowledgeable with every aspect of buying a short sale home before they decide to commit. Things can still work out in the end if the whole process goes off well, but this is usually due to the diligence of the home buyer more than it is luck. 

 

The best thing for the home buyer to do is to make their offer and then as they wait it out continue to keep their eye out on other great deals that can be better than the home they made the offer on. The only great thing about the short sale is that the home buyer does have the right to pull out of the deal before it goes any farther. Some home buyers may not mind the whole short selling process and is perfectly fine with the drawbacks as long as they can save money on buying a home. If this is the case then the home buyer will completely enjoy the new home that they purchased. 

 

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Hawaii Short Sales

1717 Ala Wai Unit 2310, Honolulu HI 96815

$589,000

1717 Ala Wai Unit 2310, Honolulu

Upgraded, ocean views and more! Great opportunity to live in convenience - Newer cabinets, solid surface counters, appliances, modern design upgraded window and bamboo l...

  • Beds 3
  • Baths 2.0
  • MLS 201406433
  • Bldg. 1717 Ala Wai

$145,000

1909 Ala Wai Unit 507, Honolulu

Centrally located at entrance to Waikiki. Close to bus line, beaches, and Waikiki activities. Nice bright open floor plan w/ central A/C. Secure building, pool, and la...

  • Beds 2
  • Baths 1.0
  • MLS 201334131
  • Bldg. Royal Aloha

1088 Bishop Unit 1703, Honolulu HI 96813

$159,000

1088 Bishop Unit 1703, Honolulu

Great opportunity to purchase a fully furnished unit currently in the aston hotel program. Turn key investment or move right in. Located in the heart of the downtown busi...

  • Beds 1
  • Baths 1.0
  • MLS 201405577
  • Bldg. Executive Centre

2345 ALA WAI Unit 1507, HON HI 96815

$299,000

2345 ALA WAI Unit 1507, HON

Another great location in Waikiki! Close to bus lines, beach, golf course, shops, & restaurants. All appliances such as stove, refrigerator, dishwasher, washer/dryer are ...

  • Beds
  • Baths 1.0
  • MLS 201405165
  • Bldg. FAIRWAY VILLA

2092 Kuhio Unit 2304, Honolulu HI 96815

$325,000

2092 Kuhio Unit 2304, Honolulu

Great unit in the desirable La Casa complex right in the heart of Waikiki. Special features include marble flooring, granite countertops, floor to ceiling specialized mi...

  • Beds 1
  • Baths 1.0
  • MLS 201401846
  • Bldg. La Casa

417 Namahana Unit 1, Honolulu HI 96815

$229,900

417 Namahana Unit 1, Honolulu

Ground floor unit in the heart of Waikiki, close to shopping, dining and city life, walk/use public transit, building has community laundry, low maintenance fees, include...

  • Beds 1
  • Baths 1.0
  • MLS 201400991
  • Bldg. 417 Namahana

1910 Ala Moana Unit 12C, Honolulu HI 96815

$398,000

1910 Ala Moana Unit 12C, Honolulu

'SHORT SALE'. Unobstructed views of Diamond Head, Waikiki skyline, ocean and mountain views across Ft. DeRussy Park. Premiere, luxury bldg. Only 4 units per floor. W...

  • Beds 2
  • Baths 2.0
  • MLS 201400609
  • Bldg. Canterbury Pl

600 Queen Unit 1610, Honolulu HI 96813

$499,000

600 Queen Unit 1610, Honolulu

Desirable corner unit in the Keola Lai building. Come enjoy life in the heart of the city with wonderful ocean views from every room. Tons of amenities including Gym, h...

  • Beds 1
  • Baths 1.0
  • MLS 201335805
  • Bldg. Keola Lai

441 Lewers Unit 704/704A, Honolulu HI 96815

$237,000

441 Lewers Unit 704/704A, Honolulu

RARE TWO ADJOINED STUDIOS, each has own private entrance, full bath, lanai, mailbox. Bldg features community laundry, secured with key access, live-in resident mgr and st...

  • Beds 1
  • Baths 2.0
  • MLS 201333672
  • Bldg. 441 Lewers St

1778 Ala Moana Unit 2213, Honolulu HI 96815

$259,000

1778 Ala Moana Unit 2213, Honolulu

Very Nice Ocean View on both sides of the Ilikai. Great Location. Across from many restaurants & shops. 10 minute walk from both Ala Moana Shopping Center and Ala Moana B...

  • Beds 1
  • Baths 1.0
  • MLS 201334202
  • Bldg. Discovery Bay

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