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5 Myths about Buying Real Estate on the Big Island of Hawaii

  |  Mortgages/Economy/Market

This post is the 1st of a two-part series. Read the 2nd post, 5 Myths about Selling Real Estate on the Big Island of Hawaii, here.

Kohala Coast, Big Island Hawaii

A Kohala Coast view from Puako (bottom left) and Mauna Lani to Waikoloa Village (center) to Mauna Kea

Myth 1: You have to have a million dollars to buy in Hawaii

If you want to spend a million dollars or more on a home in Hawaii, we can fix you up with no problem; however, there are plenty of homes and condos in the $300,000 -$500,000 range in South Kohala alone. If you are willing to put on a fresh coat of paint and do a bit of renovation work to your Hawaii home then your potential to find properties where you can build value really increases. Is your budget under $200,000? A West Hawaii condo may be a good option for the money conscious buyer looking for a first home or weekend getaway.

Zillow's Zestimate Margin of Error for the Big Island:  8.3%

Zillow’s Zestimate margin of error for the Big Island: 8.3%

Myth 2: Online automated property value estimates are accurate

There’s been much ado about the accuracy of automated estimates for property values over the last few years. These algorithm-based tools can be especially inaccurate in Hawaii. In other parts of the country, more densely populated communities and subdivisions are often very similar, with properties uniform in age, size, quality etc. In those cases, automated systems can sometimes estimate a reasonably fair value for a home based on neighboring sales. For the most part, that goes out the window for the Big Island homes, especially on the Hamakua Coast and in Waimea, where it’s not uncommon to have a $200,000 home located in close proximity to a $2,000,000 home. Most online calculation systems do not take this into account. (Zillow reports their error of margin for Hawaii county at 8.3%). A market-savvy REALTOR® will help you look into the comparable sales for similar properties (sometimes miles away) so you can make a well-informed decision about what to offer for the property you’ve chosen.

The classic example of a Big Island neighborhood with a broad range of property values is the beach community Puako. Known for being home to extravagant beach houses and tiny beach hideaways, homes on Puako Beach Drive range in price from just under $800K up to nearly $12M.

Myth 3: My mainland lender is a safe bet

Many off-island buyers who start the process of a home purchase with a favorite lender from their home state realize as the transaction progresses that using a Hawaii lender may have saved them some headaches and delays. The complications that arise usually come up during the underwriting process, not the pre-qualification process. When an underwriter unfamiliar with lava zones, water catchment systems, termite reports or other unique aspects of Hawaii real estate runs into roadblocks, unexpected delays can occur. We usually recommend that our off-island buyers who choose to work with someone from outside Hawaii at least talk with a couple of on-island island lenders to have a relationship established in case a Plan B is needed during a transaction.

Myth 4: Only the listing agent can answer your questions

On the Big Island, members of our local MLS, Hawaii Information Service, have access to a plethora of information about our listings, from how much the current owners paid for the home to tax office data about tax assessments and exemptions. REALTORS® bring value to you both because we have access to information and real life context for interpreting the data. As a buyer, you get to choose your own representation, and I encourage you to find a REALTOR® as early as 6 months before you actually purchase your home. Be honest about your purchase timeline and let your agent know what you are and are not ready for. Even if you are not touring property until you are ready to put in an offer, having an industry expert on hand and establishing a relationship with someone you are comfortable with can make all the difference in the world once you find the right property. Don’t be afraid to talk to different agents to find someone you really click with, then invest the time to build an open channel of communication so that you’re ready to make an offer at the right time.

Digital signature tools make transactions flow smootly

Digital signature tools make transactions flow smootly

Myth 5: It is hard to buy Big Island property if you don’t live on-island

This may have been true 10-15 years ago (when transactions were mostly handled by fax or “snail mail” and fewer people had access to the internet either at home or using a mobile device), but most of our transactions these days happen online, requiring less paper and making the process more efficient. Even for local clients, we use online signing tools and communicate extensively via phone, email, or text. There is great value in having regular face-to-face interaction but, if your agent is a proficient communicator and stays on top of your transaction, the process can be painless!

If you are thinking of buying on the Big Island but you are not a Hawaii resident be sure to ask your agent about what tools they will use to create a smooth transaction. A few of my favorite tools to keep things moving, for on- and off-island buyers are:

  •  This is my website where buyers can search for all Big Island listings in our MLS. Anyone can see recent sales (registration required per MLS rules to see Sold data) and market trends for various districts of the island or use Favorites and Saved Searches to bookmark properties to return to at a later time. When my clients register as a user on my site, I can also see their Favorites and Saved Searches, making the process of sharing listings easier than ever.
  • Docusign: This tool is an essential–the digital replacement of the big red “Sign Here” stamps and stickers in paper files. When using digital files, I put a big “stamp” where I need my client to sign or initial and they just click in the box. The program signs, dates, and initials all areas that I have requested without my clients having to make several trips to my office or the post office to complete paperwork.
  • Texting: Depending on my clients preferences and cell phone plan, I also find value in being able to text my off-island buyers and sellers. One place this has been especially useful:  sending real-time on-site updates for repairs that have been completed after a home inspection. A buyer who can’t be on-site with me can see what I see as I’m making a visit to the home.

If you are just beginning your search, I invite you to visit my website – – to explore Big Island communities, available listings, and much more. When you’re ready to ask questions or tour your first property, I would love to be of assistance. Please text, email or message me through my website, or give me a call at 808-333-0326. Until then, a hui hou!

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