Hawaii Agreement of Sale Contract
After the Great Recession, many people have struggled to obtain mortgages in Hawaii. To address this challenge, some homebuyers are turning to an agreement of sale contract, or a land contract, as a means of alternative financing. Below, the real estate lawyers at DeVries & Associates explain how an agreement of sale contract works — and how to decide if it’s a good idea in your real estate transaction.
What Is an Agreement of Sale Contract?
Simply put, an agreement of sale contract is a purchase contract. When it’s properly recorded, it becomes a security between the seller and the buyer. Sometimes, buyers cannot obtain traditional bank financing, due to problems in their credit, irregular income, or other issues. In these circumstances, a land contract can be an elegant solution. It lets the buyer obtain a coveted piece of property and gives the seller ongoing income.
The buyer agrees to pay for the property in installment payments over an agreed-upon period of time. Once the buyer pays off the installment plan, they receive legal title to the property. However, if they default on their payments, they might lose their interest in the real estate.
An agreement of sale is a legally-binding document that should always be in writing and recorded with the Bureau of Conveyances. It should also clearly set out the contract’s terms and conditions. In addition, it should state what remedies each party has if the other breaches the agreement of sale contract.
If you have questions about an agreement of sale contract, consult with a real estate lawyer. A lawyer can help you draft a legally-binding sale contract. He can also properly record it with the Bureau of Conveyances, as well as help resolve any disputes that might arise. A lawyer might also help you identify “red flags” in a real estate deal that might dissuade you from entering an agreement of sale contract in a particular transaction.
The Benefits of an Agreement of Sale Contract
In addition to avoiding a mortgage, there are sometimes other benefits to an agreement of sale contract. Sometimes, there are tax advantages to this arrangement. And the seller essentially gets to be their own bank and directly collects interest from the buyer. A Hawaii real estate lawyer can help you assess the unique advantages and disadvantages of a land contract in your situation.
What Happens if There’s a Dispute About an Agreement of Sale Contract?
At DeVries & Associates, we handle both transactional real estate law and litigation. We understand the complexities of Hawaiian real estate lawsuits and can help you navigate the dispute resolution process. It’s important to note that like all contract disputes, agreement of sale lawsuits and disagreements are very fact-specific.
Before a real estate lawyer can accurately assess your claim, they’ll need to review the agreement of sale contract. They will need to understand the circumstances surrounding the sale and assess each party’s interest in the real estate. Importantly, Hawaiian law does offer the buyer in an agreement of sale contract dispute some protections.
If a buyer has substantial equity in the real estate due to a pattern of past payments, the seller might be unable to cancel the agreement of sale. This is a very detailed and fact-specific analysis. Therefore, discuss your case with your lawyer if you have questions or concerns about your contract.
It’s also important to note that the seller or title holder is generally precluded from selling their interest in the land or adding liens to the property when it’s subject to an agreement of sale contract. If you have questions about transferring an interest in a parcel of land that’s involved in a land contract, contact DeVries & Associates for more information.
Do I Need a Real Estate Lawyer for My Land Contract Issues?
Hawaiian real estate law can be incredibly complex and contentious. Whether you are a resident, an investor, or a real estate management company, you should always consult with a real estate attorney. Especially about matters like an agreement of sale contract.
Because the buyer is incrementally gaining equity in the property, and the entire deal is based on a written agreement, a single mistake or misunderstanding can have disastrous results that lead to litigation, hard feelings, and a lost interest in the property.
To avoid this, consult with an experienced attorney at DeVries & Associates. We pride ourselves on realistic advice, efficient services, and thorough analysis. To learn more about our approach to Hawaii agreement of sale contracts, contact us for a no-risk evaluation today. We’re here to help make your real estate goals a reality.
Consult With an Experienced Hawaii Agreement of Sale Contract Lawyer
At DeVries & Associates, our skilled team of real estate attorneys can help you draft, record, and enforce an agreement of sale contract. We pride ourselves on well-drafted contracts, thoughtful advice, and aggressive litigation strategies (when necessary). We offer comprehensive real estate law solutions for investors, home buyers, sellers, and homeowners’ associations in Hawaii. Contact us today for no-risk, private consultation.