Disclaimer: This article is for informational purposes only and does not constitute legal advice.
Detailed Answer
1. Review Ownership and Foreclosure Status
In Hawaii, most foreclosures follow the nonjudicial procedure under HRS Chapter 667. Begin by obtaining a title report to verify co-owners, encumbrances, and the trust deed terms. Confirm the trustee’s notice of sale date and ensure you understand the timeline under HRS §667-5.
2. Secure Co-Owner Consent
All joint owners must agree to market and sell the property. Create a co-owner agreement or joint listing authorization. This document clarifies decision-making authority, sale proceeds distribution, and roles in the sale process.
3. Prepare the Property and Disclosures
Conduct a professional inspection to identify necessary repairs. Address safety and code compliance issues promptly to attract buyers. Although Hawaii law does not mandate a specific pre-foreclosure disclosure form, sellers must still disclose known material defects under general contract principles.
4. Engage Real Estate and Legal Professionals
Work with a real estate agent experienced in pre-foreclosure sales. Agents can expedite marketing, showings, and negotiations with cash-ready buyers. Consult a real estate attorney to review listing agreements, sale contracts, and closing documents, ensuring compliance with mortgage and trust deed obligations.
5. Price Strategically and Plan for a Fast Closing
Set a competitive, market-driven price reflecting the shortened timeline before the foreclosure trustee sale. Obtain an official payoff statement from the lender early. Coordinate closing logistics to complete the sale 10–20 days before the auction date, allowing time for recording the new deed.
6. Distribute Sale Proceeds
At closing, the lender is paid first. Any surplus follows the priority rules in HRS §667-6 and co-owners’ ownership interests. Finalize the disbursement agreement among joint owners to avoid conflicts.
Helpful Hints
- Confirm the exact foreclosure auction date in the recorded notice of default and notice of sale.
- Maintain clear, documented communication among co-owners to prevent disputes.
- Obtain multiple repair estimates and focus on cost-effective improvements.
- Consider short sale negotiations if the property value falls below the mortgage balance.
- Review and clear any homeowner association (HOA) dues or special assessments to avoid additional liens.