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You got me interested. We are in a situation that is similar, but not. Our home is in Hawaiian Shores, which we bought in June of 2013. I'm living in China with my wife and 5 children, and we have the home rented out long term....now. (We decided to switch from vacation rental--which was great, by the way--to long term, and it took from August to today!) But if I could, I would unload this house in a heartbeat. I love it, but we had a Total Money Makeover (Dave Ramsey) and we want to buy all our homes in the future with cash, and be debt free. Kind of hard to be debt free with home you can't sell due to a lava flow! A land contract, however, means we are still on the loan with the bank, right? It's similar to rent to own, correct? What's the advantage? The 25% down? I could use some help figuring out how to market our home as a land contract, etc.
If you sell your house, you must pay off your bank loan in full at the time of the sale.
So if you want to sell "on contract", you either must not have any mortgage on your property or the buyer must provide a down-payment large enough to pay off the existing mortgage balance (or a combination of the buyers downpayment plus your own cash to pay off the existing mortgage balance at the time of the sale).
Most of the time, the only way you can sell your house and carry the contract yourself, is if you own the house outright ... or have a small loan balance remaining on the property that you can pay off at the time you sell the house.
We have sold successfully all the properties in my lifetime via owner contract some I owned outright one I still had a mortgage on and did not pay off until the purchaser made their final balloon payment on our contract.
I drew up the legal contracts myself and filed properly with the state never got an attorney never needed one the wording on most contracts all pretty standard. These were in Wisconsin, Minnesota, Idaho and when I get ready to will be in Hawaii. The each state may have a slight variance in terms but most are all similar.
If you still have a loan with the bank - the best way is to get enough down to pay the mortgage off. The other route would be as I did pay it off when the property contract balloon payment was payable on your contract. If you do this make sure you DO NOT miss any of your mortgage payments on your loan or you could wind up in a legal issue as the party you sold the property to on your land contract does have an investment to your property.
With the lava flow scare in the area - the only way to sell on a land contract would be to hold the contract longer than average example 20 year note and/or ask for a larger then average down payment and then a shorter contract term. All of the other contracts I did the purchaser had a balloon payment for payoff in 3 or 5 years.
Since it is different now in this area due to the lava you will have to hold the contract much longer to make the sale seem feasible to the purchaser. We own the property outright so this would not be an issue for us - IT would be in the fact that the longer you hold a contract the purchasers have a longer window to default on your contract such as they do on bank loans. A lot can happen in a person’s life financially and personally in 20 years that can affect their ability to pay. Then you have to worry about disgruntled person who damages and removed items from your property prior to you taking the property back and cancelling their contract. Especially if lava decides to head toward your property and more than likely the one you sold to will stop making payments. Another thing to consider is when you sell the buyer may also not be able to get insurance on the property either. So you would be open to that risk also..
For now just we are holding steady and will wait and see what the flow does or does not do in the future. It took 30 years for the Royal Gardens and Kalapana to be destroyed and that was a series of aggressive flows and steeper elevation decent in a shorter distance. The June 27th flow is a passive flow with not much volume and on a flatter decent. So not really sure about what this flow or the following flows in the future will hold. Due to hubby and my age I doubt if I will even be around in 30 years to worry about it.
If you have a long term renter and you still have insurance on your home. I would probably just stay with the renter for now and wait it out and see what does transpire long term in this area no one really knows for sure.
1freespirit, I appreciate your comments. Your a good neighbor. These are interesting times. Not everyone can tell their kids they have lava flowing towards their home! I just got long-term renters in this week...good ones, it appears. That is a relief. We used to vacation rent it, but the flow made it too precarious to keep that up (for us at least). I am actually happy for the excuse to hold on to the house (which was my original intent when I purchased it). Aloha!
So much to think about in these responses. Even though there are some smoking' deals on houses in Puna at the moment is it prudent to buy a house that can't be insured or might someday be in the lava flow path? The lava is stalled at the moment but that doesn't mean it won't keep flowing. Life in Puna will change drastically once 130 is cut off. And what about air quality? Living the good life on the Big Island is a dream of ours. We've both just retired and love Puna. When we've stayed in Leilani in the past we thought it was a great neighborhood that we could be happy hanging out in. Part of me is willing to gamble and buy an affordable house in Leilani and consequences be damned. Then there's the realistic part of me saying but..but...but...
I highly doubt if 130 will get cut off from this flow and if it does it will get re-opened again as soon as it possible. Many feel there is not enough volume of lava or pressure to push this flow all the way to the ocean. If it does make it to ocean it will take years. I am not the only one who thinks this way many do in the area and also some geologists. While no one knows for certain what will happen in the future - as far as the June27th flow it is unlikely it will ever make ocean entry. If 130 gets crossed there is only a small section of 2 lane gravel road to travel on as a detour. It by no way is the end of lower Puna not by a long shot. If fact it is less miles for us to drive to Hilo on the alternative roads then it is to use 130. We are bummed they are closing the alternate road today DANG we always drove that road last few weeks got kind of spoiled.
Air quality is still better in lower Puna even with the current lava flow then it is over in Kona and people are still moving there and living there. There has always been an active flow in lower Puna for the last 32 years and the trade winds still as a norm blow the same direction - blows the fumes/gases over to the West/North side of the isle.
Banks are still doing mortgages on homes over here it's the insurance companies that are not insuring and personally I think insurance companies will also insure in the future but have an exception (fire due to volcanic eruption or lava) something like that. They have so many other exclusions in policies it will be nothing for them to add that one. Insurance companies are not going to want to miss out on premiums. They will figure something out to issue policies but not cover fires due to lava. It cannot be that hard.
We own (2) homes in lower Puna and neither one of them do we feel will be destroyed by lava in the next few years maybe never and who knows Mauna Kea has been acting up recently with unusual activity and is long overdue for an erruption - sooo - does anyone even know what the future holds for this whole island?
Banks are still doing mortgages on homes over here it's the insurance companies that are not insuring and personally I think insurance companies will also insure in the future but have an exception (fire due to volcanic eruption or lava) something like that. They have so many other exclusions in policies it will be nothing for them to add that one. Insurance companies are not going to want to miss out on premiums. They will figure something out to issue policies but not cover fires due to lava. It cannot be that hard.
Those statements seem to be in conflict with each other - if you can't get insurance, how do you get a bank to give you a mortgage? Insurance is one of the most important necessary things to secure a mortgage. Even if they insured with a "fire/lava" exception, I don't see how a bank would find that acceptable.
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We own (2) homes in lower Puna and neither one of them do we feel will be destroyed by lava in the next few years maybe never and who knows Mauna Kea has been acting up recently with unusual activity and is long overdue for an erruption - sooo - does anyone even know what the future holds for this whole island?
1freespirit - thanks for your thoughtful reply and the link to the Pahoa article. We were hanging out in Puna just last month and that is part of the reason I asked my question in the first place- we dream of moving there. And Leilani seems like a good place for us. But is it foolish to invest in a home in that particular subdivision at this time? While I hemmed and hawed the home I was interested in sold in less than two weeks. So some people certainly think so. Lots of crazy people out there and I may be one of them- I'm still checking the houses for sale page.
You're right - no one knows what the future holds. So we should just follow our dreams and enjoy life while we have it.
My biggest dilemma is that sometimes those dreams conflict - or that your partner's dreams diverge from your own. My hubby wants us to be snowbirds. If we did buy in Puna we would only be there in the winter. So for now we'll dream, shiver until April, enjoy our beautiful Alaskan summer, and look to rent long term next winter in Puna. And continue checking the Homes for Sale just in case our dream house comes on the market.
SATIRICAL COMMENTARY ENSUES! Don't get too worked up over it!
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Originally Posted by 1freespirit
I highly doubt if 130 will get cut off from this flow and if it does it will get re-opened again as soon as it possible.
Problem is, nobody knows what "as soon as possible" means, nor can they. Until December, the road through Kalapana and Chain of Craters had been closed for 16 years, after having been reopened and closed several times by previous lava flows.
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Many feel there is not enough volume of lava or pressure to push this flow all the way to the ocean.
But of course, that could change tomorrow, or this afternoon, or could even be going on right now, unbeknownst to us. That's the completely unpredictable nature of volcanic phenomena. Even the experts only discuss this stuff in terms of probabilities or likelihoods, not in absolutes.
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If it does make it to ocean it will take years.
Probably. Unless it speeds up. It could take days... unlikely, but entirely possible. Nothing is certain. Nothing. Look back at the history of Kilauea, and it has had engendered several major events that have happened pretty much all-of-a-sudden. It's unpredictable.
I like the tone of the piece, but I find it unfortunate that the writer felt the need to substitute her own misinformation, in order to to juice up the story, in place of that which she calls out happening in the major news coverage...
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Here's what the media hasn't told you: Pahoa is a portrait of resilience.
Pure imagination... many would call Pahoa a portrait of hippy-dipness and non-ironic tie-dyes and dope dealers hanging out near the ATM, mixing shoulder to shoulder with rural-suburban folks who commute into Hilo to work. Others refer to it as a gay oasis, or as a quaint little tourist destination with a couple of good restaurants. The Census Bureau says that in 2010 Pahoa was the only town on the Big Island which registered a decline in population. And the County Police station was relocated there a couple of years ago from Kea'au because of the big increase in crime in the area. But I suppose the writer's artistic license is up to date and her emissions test is current, so her imagination and fictional reasoning is probably not sufficiently egregious to merit a citation. But a warning would be entirely reasonable.
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When lava advanced toward the highway, the town built a 10-mile bypass road.
Nope. The county did that.
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When it moved toward schools, Pahoa relocated students to neighboring communities.
Nope. The County of Hawai'i and the Board of Education did that.
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Utility poles are in the path of the flow. So what did Pahoa do? Lift them up onto rock platforms, of course.
Nope. HELCO did that, and there was no lifting involved. As an experiment they tried piling rocks and dirt around the base of the existing poles to try to make a barrier against the lava. In at least one case it didn't work, because the surrounding lava heated up the rocks enough to burn through the pole, which fell as a result.
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We were in town only 10 days, but that was long enough to see that this village is not easily broken. The next time I visit Hawaii, Pahoa might not be where I left it. It could be empty, or it could be covered in hard black rock. It hardly matters, really, because Pahoa is not just a place.
Cue: swelling orchestra - hand out tissues
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Pahoa is the decision to live not in resistance to nature, but in flux with it. It is making sure your neighbor, or even your neighbor's dog, is all right. It is having a back-up plan, an extra loaf of bread and a gas can ready to go. It is the awareness that our world is constantly changing, whether we want it to or not.
Besides being bad writing ("Pahoa is the decision"?) I think it's more accurate to say living in Pahoa involves the decision to not live in resistance to a strong counter-culture presence, but to dance with the flux. It's knowing which neighbor and their dog to check in on during an emergency, and which neighbor and their dogs to stay the heck away from. It's having a back-up plan, if you have the wherewithal for a backup plan, or if you don't, maybe firing up another bowl, popping the top on a cold Steinie and saying "whatever!"
Those statements seem to be in conflict with each other - if you can't get insurance, how do you get a bank to give you a mortgage? Insurance is one of the most important necessary things to secure a mortgage. Even if they insured with a "fire/lava" exception, I don't see how a bank would find that acceptable.
Yes you are correct - it is ... what I meant was.. I have spoken to people who got approved by the lender for loan on a home in the area but when it came time to get the insurance they could not so thus could not finalize the loan or purchase.
So yes it is hand and hand but it is not the banks holding up the process it is the insurance carriers.
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