Hawaii Agreement of Sale
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In your traditional Hawaii real estate purchase, third party lenders (i.e. financial institutions) are involved and a mortgage is placed on the property until the loan is paid in full. However, with the recent mortgage credit crunch in Hawaii, an “Agreement of Sale” has become more popular. An Agreement of Sale is basically a method of Seller-provided financing. In other states, a Hawaii Agreement of Sale is known as a “Contract for Deed”, “Installment Sales Agreement” and “Land Contract”.
A Hawaii Agreement of Sale is a purchase contract and, if properly recorded, a security device between a Seller and Buyer of real property in which the Seller provides financing to buy the property for an agreed-upon purchase price and the Buyer repays the loan in installments.
Under a Hawaii Agreement of Sale, the Seller retains the legal title to the property, while permitting the Buyer to take possession of it for most purposes (along with its risks and liabilities) other than legal ownership. When the full purchase price has been paid including any interest, the Seller is obligated to convey legal title to the property to the Buyer.
When entering into a Hawaii Agreement of Sale, there are some general concerns to consider:
Regardless of whether you are a Buyer or Seller under a Hawaii Agreement of Sale, it is highly recommended that you seek consultation with a Hawaii attorney who is experienced in handling such concerns. Such a Hawaii attorney can draft a Hawaii Agreement of Sale that is tailored to your unique situation and needs. Please note that there are many additional issues that are common with Hawaii real estate purchases.
Contact us today to schedule a consultation on your Hawaii Agreement of Sale issues.
Article written by Nathan Natori