From last month’s article, Sue the Realtor?, we continue the discussion on the Home Inspection Contingency.

BY OSCAR LIBED OF INSPECT HAWAII

Given a competitive market, did a significant amount of Buyers in Massachusetts waive the Home Inspection contingency as a tactic for their offer to be more favorable?

Yes. This led Massachusetts Legislators to file a Bill that seeks to remove the pressure that home buyers feel to waive the home inspection contingency in their offers.

The residential real estate market was so competitive, many waived their right to a home inspection to make their offers more attractive to sellers.

What is the specific Bill?

The State of Massachusetts has a Bill in the Legislature that would eliminate the waiving of the Home Inspection as an incentive for the Seller to accept the Offer.

Senate Bill 197 and House Bill 245—known as An Act Protecting Consumer Rights in Purchasing Safe and Habitable Homes—would make Home Inspections a right in Massachusetts.

What is the problem in Massachusetts?

More and more buyers have been coerced to waive the Home Inspection in recent years to compete in a hyper-competitive housing market. Home inspectors warn it is a dangerous gamble that can cause safety and financial risks down the road. The bill would essentially remove the home inspection contingency as a bargaining chip.

“It would no longer be part of the negotiations of buying a home,” said President of ASHI New England, James Malgeri. “You can’t sweeten up your offer by waiving it.”

Photo: courtesy of Inspect Hawaii

What are the benefits of this proposed law?

• Remove the Home Inspection contingency from the offer to purchase form (this will prevent the waiving of the home inspection contingency because there will be no contingency)
• Allow a Homebuyer to get a home inspection within 10 days of the acceptance of their Offer
• Guarantee the right to a Home Inspection
• Include a clause that allows the purchaser to revoke their offer to purchase if the condition of the property requires repairs greater than the amount they included in the offer.
• Not require Home Inspections
• Include a penalty for the Seller if they fail to comply with the law

Photo: courtesy of Inspect Hawaii

What is the actual text of the Bill?

House Bill H.245/Senate Bill S.197.

What is the status of the Bill?

As of this date, it is referred to the Joint Committee on Consumer Protection and Professional Licensure

Would a version of this Bill be proposed in Hawaii?

Unknown at this time. But, if passed, it will motivate other States to initiate versions of this Bill and significantly impact the Home Inspection Industry.

For any questions on this topic, please call Oscar Libed of Inspect Hawaii at 808-728-5707 or send an email to oscar@inspecthawaii.com

www.inspecthawaii.com

BY DUNCAN HSIA OF INFINITE FINANCIAL

In the dynamic world of mortgage financing, it’s essential to stay updated about the diverse options at your disposal. One such option that has been gaining popularity, particularly in a market where mortgage rates are high but expected to drop within the next several years, is the concept of buydowns. In this post, we’ll explore the specifics of 2-1 buydowns and their alternatives, such as 3-2-1, 2-1, 1-0, and 1-1 buydowns, and how they can be advantageous for potential homebuyers and sellers.

Photo by Sebastian Herrmann on Unsplash

What is a 2-1 Buydown?

A 2-1 buydown is a type of mortgage agreement that offers a lower interest rate for the first two years of the loan, followed by the full rate for the third and subsequent years. The “2-1” in the name refers to the interest rate reduction in the first two years: the interest rate is reduced by 2% in the first year and by 1% in the second year. This type of financing can make a mortgage more manageable with a lower initial monthly payment.

How Do Buydowns Work?

In a 2-1 buydown, the interest rate decreases by 2% in the first year and by 1% in the second year, before settling into its permanent rate in the third year. To compensate for the lower interest received in the early years, lenders charge an additional fee. This payment is typically covered by a seller credit, which is used to pay for the buydown.

Who Can Benefit from a 2-1 Buydown?

Both homebuyers and sellers can significantly benefit from a 2-1 buydown. For homebuyers, it can make a mortgage more manageable with a lower initial monthly payment, allowing the homebuyer to ease into their mortgage payments. For sellers, a 2-1 buydown can make a property more attractive to buyers, potentially facilitating a quicker sale at a good price, especially for those buyers who may be reluctant to pay the current high mortgage rates.

Are Buydowns Available for All Types of Loans?

While buydowns can be an attractive option, it’s important to note that they are not offered on all types of loans. At Infinite Financial, we offer buydowns on conventional, VA, FHA, and some bank statement and jumbo loans.

The Benefits of a 2-1 Buydown

A 2-1 buydown offers several benefits:

1. It’s a great option when interest rates are high. The benefit goes directly to the borrower.
2. It allows borrowers to use any excess seller concessions that may otherwise go unutilized.
3. It provides a lower interest rate for the first 1-3 years, allowing the borrower to have a lower initial monthly payment.
4. Borrowers can use the monthly savings to do renovations, upgrades, or buy furniture for the new home.
5. In the current high interest rate environment, borrowers will more than likely be able to refinance to a lower rate than the one they will adjust to after the 1-3 years.
6. It eases the transition from renting to buying by easing the borrower into their mortgage with a lower payment.

FAQ

Q: What is a 2-1 Buydown? A: A 2-1 buydown is a mortgage option that uses a seller credit to offer a lower interest rate for the first two years of the loan, followed by the full rate for the third and subsequent years. The interest rate is reduced by 2% in the first year and by 1% in the second year.

Q: Are Buydowns available for all types of loans? A: No, buydowns are not offered on all types of loans. At Infinite Financial, we offer buydowns on conventional, VA, FHA, and some bank statement and jumbo loans.

Q: What are the alternatives to a 2-1 Buydown? A: Alternatives to a 2-1 buydown include 3-2-1, 1-0, and 1-1 buydowns.  A buyer can also use a seller credit to pay for other closing costs, including discount points to permanently lower the mortgage interest rate.  Without a seller credit, a buyer may be able to negotiate a lower price.

Q: When is a 2-1 Buydown especially useful? A: A 2-1 buydown can be especially useful in a market where mortgage rates are currently high but expected to drop within the next several years.

In conclusion, understanding the concept of buydowns and their potential benefits can be a game-changer in the home financing landscape. Whether you’re a homebuyer seeking to manage your mortgage more effectively, or a seller looking to make your property more attractive to potential buyers, buydowns can provide a viable solution. At Infinite Financial, we’re here to guide you through these options and help you make the best decision for your financial future.

Kahala is one of the most desirable neighborhoods in Oahu, Hawaii. It is known for its beautiful beaches, upscale shopping, and excellent schools. Here are some of the advantages of living in Kahala:

• Luxury living: Kahala is home to some of the most luxurious homes in Hawaii. Many of the homes are located on oceanfront property and have stunning views.
• Excellent schools: Kahala is home to two of the best public schools in Oahu, Kahala Elementary School and Kahala Intermediate School. Both schools have consistently been ranked among the top schools in the state.
• Proximity to amenities: Kahala is located close to many of Oahu’s best amenities, including the Kahala Mall, the Kahala Beach Hotel, and the Kahala Golf Club.
• Safe and secure: Kahala is a very safe and secure neighborhood. The crime rate is very low, and the streets are well-lit.
• Beautiful scenery: Kahala is surrounded by beautiful scenery, including the Kahala Beach, the Ala Wai Canal, and the Koolau Mountains.
• Diverse population: Kahala is a diverse neighborhood, with residents from all over the world. This diversity creates a vibrant and interesting community.

Of course, there are also some disadvantages to living in Kahala. The cost of living is very high, and the traffic can be congested. However, for those who can afford it, Kahala is a wonderful place to live.

Here are some famous people who have lived or currently live in Kahala:

• Liza Minelli
• Carol Burnett
• Don Ho
• Barbara Cox Anthony
• Chris Hemmeter
• Duke Kahanamoku
• Alex O’Loughlin
• Daniel Dae Kim
• Pierre Omidyar

If you are considering moving to Kahala, I encourage you to do your research and visit the neighborhood before making a decision. It is a wonderful place to live, but it is not for everyone.

Kalihi-Lower is a diverse neighborhood in Honolulu, Hawaii. It is known for its working-class roots and its proximity to downtown and Waikiki. There are many advantages to living in Kalihi-Lower, including:

• Affordability: Kalihi-Lower is one of the most affordable neighborhoods in Honolulu. The median home price is around $500,000, and the median rent is around $1,500 per month.
• Convenience: Kalihi-Lower is very convenient to downtown and Waikiki. There are several bus lines that run through the neighborhood, and it is also a short drive to both areas.
• Proximity to parks and recreation: There are many parks and recreation areas in Kalihi-Lower, including Sand Island State Recreation Area, Kalihi Valley State Recreation Area, and Kalihi Community Park.
• Diversity: Kalihi-Lower is a very diverse neighborhood, with people from all over the world calling it home. This diversity creates a vibrant and exciting community.
• Warm climate: Honolulu has a warm climate year-round, with average highs ranging from 80 to 90 degrees Fahrenheit.

Of course, there are also some disadvantages to living in Kalihi-Lower, such as:

• Traffic congestion: Traffic can be congested in Kalihi-Lower, especially during rush hour.
• Crime: Crime is higher in Kalihi-Lower than in some other parts of Honolulu.
• Noise pollution: Noise pollution can be a problem in Kalihi-Lower, especially from traffic and businesses.

Overall, Kalihi-Lower is a great place to live if you are looking for an affordable, convenient, and diverse neighborhood in Honolulu. However, it is important to be aware of the potential disadvantages before making a decision to move there.

Here are some additional things to consider when deciding whether or not to live in Kalihi-Lower:

• Your lifestyle: If you are looking for a quiet and peaceful neighborhood, Kalihi-Lower may not be the best fit for you. However, if you are looking for a vibrant and exciting community with a lot to offer, Kalihi-Lower could be a great choice.
• Your budget: Kalihi-Lower is a very affordable neighborhood, but it is important to factor in the cost of transportation, utilities, and other expenses.
• Your commute: If you work downtown or Waikiki, Kalihi-Lower is a convenient place to live. However, if you work in another part of the island, the commute may be longer.

I hope this information helps you make a decision about whether or not to live in Kalihi-Lower.

Punaluu is a small town on the Big Island of Hawaii, known for its black sand beaches, lush vegetation, and laid-back lifestyle. Here are some of the advantages of living in Punaluu:

• Stunning natural beauty: Punaluu is home to some of the most beautiful beaches in Hawaii, including Punaluu Black Sand Beach, Ke’anae Peninsula, and Papakolea Green Sand Beach. The town is also surrounded by lush rainforests and mountains, providing plenty of opportunities for hiking, swimming, and sunbathing.
• Relaxed lifestyle: Punaluu is a great place to slow down and relax. The pace of life is much slower here than in other parts of Hawaii, and there’s no shortage of opportunities to enjoy the simple things in life, such as reading a book on the beach or going for a walk in the rainforest.
• Close to nature: Punaluu is surrounded by nature, making it a great place to connect with the outdoors. There are plenty of opportunities to go hiking, camping, fishing, and stargazing.
• Friendly community: The people in Punaluu are known for being friendly and welcoming. You’ll quickly feel at home in this small town, where everyone knows everyone else.
• Relatively affordable cost of living: The cost of living in Punaluu is relatively affordable, especially compared to other parts of Hawaii. You can find a comfortable place to live without breaking the bank.

Of course, there are also some disadvantages to living in Punaluu, such as the limited job opportunities and the lack of big-city amenities. However, if you’re looking for a beautiful, relaxed, and affordable place to live, Punaluu is a great option.

Here are some additional things to consider about living in Punaluu:

• The climate is warm and humid year-round.
• The nearest major airport is Hilo International Airport, about an hour’s drive away.
• There are a few small grocery stores and shops in Punaluu, but you’ll need to go to Hilo for most major shopping.
• There are a few schools in Punaluu, but if you have children, you may want to consider sending them to school in Hilo.

Overall, Punaluu is a great place to live if you’re looking for a quiet, relaxed, and affordable place to enjoy the beauty of Hawaii.

Wahiawa is a town in Honolulu County, Hawaii, United States. It is located on the island of Oahu, about 25 miles (40 km) northwest of Honolulu. Wahiawa is a popular place to live for military personnel and their families, as it is home to Schofield Barracks, one of the largest military bases in the United States.

Here are some of the advantages of living in the Wahiawa area:

• Beautiful weather: Wahiawa has a warm, tropical climate with average temperatures ranging from 70 to 80 degrees Fahrenheit (21 to 27 degrees Celsius) year-round. The town also receives an average of 130 inches (330 cm) of rain per year, which provides a lush, green landscape.
• Close proximity to Honolulu: Wahiawa is just a short drive from Honolulu, the capital of Hawaii. This means that residents have easy access to all the amenities and attractions of the city, such as world-class restaurants, shopping, and entertainment.
• Strong sense of community: Wahiawa is a close-knit community with a strong sense of identity. Residents are known for being friendly and welcoming, and there are many opportunities to get involved in local activities and events.
• Affordable cost of living: The cost of living in Wahiawa is lower than in many other parts of Hawaii. This makes it a more affordable option for those who are looking to live in the state.
• Proximity to nature: Wahiawa is surrounded by beautiful nature, including mountains, forests, and beaches. This makes it a great place for outdoor activities, such as hiking, camping, and fishing.

Of course, there are also some disadvantages to living in Wahiawa. These include:

• High property taxes: Property taxes in Wahiawa are relatively high. This is due to the fact that the town is located in a desirable area with a high cost of living.
• Lack of diversity: Wahiawa is a relatively homogeneous community, with a majority of the population being Asian or Pacific Islander. This can be a drawback for those who are looking for a more diverse community.
• Traffic congestion: Traffic can be a problem in Wahiawa, especially during rush hour. This is due to the fact that the town is located near Honolulu and is a major transportation hub for the island of Oahu.

Overall, Wahiawa is a great place to live for those who are looking for a beautiful, affordable, and close-knit community. However, it is important to be aware of the potential drawbacks before making a decision to move to the area.

Halawa is a small community on the west side of Oahu, Hawaii. It is known for its beautiful beaches, lush rainforests, and historic sites. Here are some of the advantages of living in Halawa:

• Natural beauty: Halawa is surrounded by stunning natural beauty. The area is home to several beaches, including Kahana Beach Park, Waimea Valley, and Halawa Beach Park. There are also several hiking trails in the area, including the Halawa Valley Trail and the Kahana Valley Trail.
• Low crime rate: Halawa has a very low crime rate. In 2022, the violent crime rate in Halawa was 0.7 per 1,000 residents, and the property crime rate was 9.4 per 1,000 residents. This is significantly lower than the national average for violent crime (4.0 per 1,000 residents) and property crime (19.6 per 1,000 residents).
• Friendly community: Halawa is a very friendly community. The people in Halawa are known for their aloha spirit and their willingness to help others. This makes Halawa a great place to live if you are looking for a sense of community.
• Easy access to amenities: Halawa is located close to several major amenities, including shopping centers, restaurants, and schools. This makes it easy to get everything you need without having to travel far.
• Affordable housing: Halawa is one of the more affordable areas on Oahu. This makes it a great option for people who are looking for a more affordable place to live in Hawaii.

Of course, there are also some disadvantages to living in Halawa. These include the high cost of living, the limited job opportunities, and the lack of public transportation. However, for people who are looking for a beautiful, safe, and friendly place to live, Halawa is a great option.

Here are some additional advantages of living in Halawa:

• Close to nature: Halawa is surrounded by nature, making it a great place to enjoy the outdoors. There are several hiking trails, beaches, and forests in the area.
• Culturally diverse: Halawa is a culturally diverse community, with people from all over the world calling it home. This makes it a great place to experience different cultures and learn about different ways of life.
• Relaxed lifestyle: Halawa is a laid-back community, where people take the time to enjoy life. This makes it a great place to slow down and relax.

If you are considering moving to Halawa, I encourage you to visit the area and see for yourself if it is a good fit for you.

Manoa is a beautiful and vibrant neighborhood located in Honolulu, Hawaii. It is home to the University of Hawaii at Manoa, as well as a variety of shops, restaurants, and cultural attractions. Here are some of the advantages of living in the Manoa area:

• Proximity to the University of Hawaii at Manoa: If you are a student, faculty member, or staff member at the University of Hawaii at Manoa, living in Manoa will give you easy access to campus. You can walk, bike, or take the bus to class, and you will be just a short distance from many of the university’s academic buildings, libraries, and student services.
• Beautiful scenery: Manoa is known for its lush vegetation and stunning views of the Koolau Mountains. There are many opportunities to enjoy the outdoors in Manoa, including hiking, biking, swimming, and kayaking.
• Active community: Manoa is a very active community with a variety of clubs, organizations, and events. There is something for everyone in Manoa, whether you are interested in hiking, biking, yoga, volunteering, or just meeting new people.
• Convenient location: Manoa is located just a few miles from downtown Honolulu and Waikiki. This makes it easy to get to work, school, or play. There are also many restaurants, shops, and grocery stores in the area.
• Safe and family-friendly: Manoa is a very safe and family-friendly neighborhood. There are many parks and playgrounds for kids, and the schools in the area are highly rated.

Overall, Manoa is a great place to live if you are looking for a beautiful, active, and convenient community. Whether you are a student, a young professional, or a family with children, you will find something to love in Manoa.

Here are some additional advantages of living in the Manoa area:

• Excellent public schools: The Manoa area is home to some of the best public schools in Hawaii, including the University of Hawaii Laboratory Schools, McKinley High School, and Punahou School.
• Diverse cultural attractions: Manoa is home to a variety of cultural attractions, including the Honolulu Museum of Art, the Manoa Valley Theater, and the East-West Center.
• Easy access to outdoor recreation: Manoa is surrounded by mountains and forests, which offer endless opportunities for hiking, biking, swimming, and kayaking.
• Affordable housing: Compared to other parts of Honolulu, the Manoa area is relatively affordable.

If you are looking for a beautiful, vibrant, and affordable place to live in Hawaii, then the Manoa area is a great option.

Waialua is a charming town on the North Shore of Oahu, Hawaii. It is known for its beautiful beaches, lush green hills, and small-town atmosphere. Here are some of the advantages of living in Waialua:

• Natural beauty: Waialua is surrounded by stunning natural beauty. The town is home to several beaches, including Waialua Bay, Kahana Beach, and Pupukea Beach. There are also several hiking trails in the area, such as the Waimea Valley State Monument and the Kahana Valley State Park.
• Small-town feel: Waialua has a small-town feel, which is a major draw for many people. The town is home to a close-knit community, and there is a sense of familiarity and belonging that is difficult to find in larger cities.
• Proximity to the city: Waialua is located just a short drive from Honolulu, the capital of Hawaii. This means that residents have easy access to all the amenities of the city, while still enjoying the peace and quiet of a small town.
• Cost of living: The cost of living in Waialua is relatively low, especially compared to other areas of Hawaii. This is a major draw for many people who are looking to live in Hawaii but who are on a budget.
• Abundant outdoor activities: Waialua is a great place for people who love the outdoors. There are endless opportunities for hiking, biking, swimming, surfing, and fishing.

Of course, there are also some disadvantages to living in Waialua. These include:

• Limited job opportunities: The job market in Waialua is not as diverse as in larger cities. This means that people who are looking for specific types of jobs may have a hard time finding them in Waialua.
• Limited nightlife: Waialua does not have a very active nightlife scene. This is a major drawback for some people who enjoy going out to bars and clubs.
• Distance from major airports: The nearest major airport is Honolulu International Airport, which is about an hour’s drive from Waialua. This can be inconvenient for people who travel frequently.

Overall, Waialua is a great place to live for people who are looking for a quiet, relaxing place to call home. The town has a lot to offer in terms of natural beauty, outdoor activities, and a small-town atmosphere. However, it is important to be aware of the limited job opportunities and nightlife scene before making a decision to move to Waialua.