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Top Real Estate Terms You Should Know!

Top Real Estate Terms You Should Know When Buying or Selling

Whether you’re in the market for a new home or selling your current residence – or both – it pays to know certain real estate terms used by your real estate agent or mortgage lender. You don’t want any confusion when it comes to one of the major purchases of your life.

Fixed Rate Mortgage vs. Adjustable Rate Mortgage – A fixed rate mortgage provides a specific interest rate for the life of the loan. That life is usually 30 years. An adjustable rate mortgage will vary, either up or down, and the loan life varies with changes every few years.

Preapproval vs. Prequalified – Although these terms sound similar, there is a distinct difference, and a seller will prefer a preapproval letter from a potential buyer’s lender than a prequalification letter. If the lender issues a pre-approval letter, that means the buyer has submitted extensive financial information and the lender knows just how much the buyer can borrow. With prequalification, an earlier phase, the lender is acting only on basic information supplied by the buyer, so the actual amount of the loan isn’t as certain.

Contingencies – When a buyer makes a home offer, the contract may include certain conditions in order for the sale to occur. The seller must agree to these contingencies for the sale to proceed. Common contingencies include the buyer selling their current home, approval of financing and an appraisal that comes in at or above the amount the buyer has offered to pay.

Inspection and Appraisal – These terms are not interchangeable. An inspection is performed at the buyer’s expense after the offer is accepted. The inspector goes through the property diligently, noting any issues with dwelling and its condition. An appraisal is required by the mortgage lender. The appraiser estimates the value of the house based on “comps,” or recent sales of comparable properties. If the appraisal comes in at less than the buyer’s offer, the contingency clause may kick in. A lender will not loan a buyer money to purchase a property for more than its appraised value.

Title Insurance – Title insurance protects the buyer and the lender from the possibility that the seller, or prior seller, did not have clear ownership of the property. Lenders will not finance a property that has any title issues.

Listing Agent and Buyer’s Agent – Most home sales involve two real estate agents. The listing agent represents the seller, and the buyer’s agent – well, the term makes their representation obvious.

Closing Costs – The down payment and mortgage aren’t the only costs buyers face when making a home purchase. There are also closing costs, some of which are borne by the seller, and these fees can make up as much as 5 percent of the home’s price. These costs include title insurance, recording fees, lender processing fees, taxes and myriad other fees. Ask your lender to go over closing costs prior to the sale so you know exactly how much is due.

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If you’re looking to buy or sell a home or find a rental property, you need a knowledgeable, experienced realtor. We make sure buyers, sellers and renters understand the process every step of the way. Contact Island Realty Group LLC at 808-689-7407 or


April 23, 2018

How to Get Top Dollar for Your Home!

How to Price Your Home to Sell Fast and Get Top Dollar

Every seller wants to sell their property quickly while getting as much money for it as possible. With a little effort, it’s not hard to accomplish. It takes some research, resolve and the right real estate agent.

The Right Price

The most important factor is pricing your home correctly from the start. Sure, you can list a home for less than its market value and sell it quickly, but most people aren’t in such desperate need to sell that they’ll take less money. What you want to avoid is overpricing your home and then frequently reducing the price. When a new listing comes on the market, the greatest number of potential buyers view that listing within a few days. If the house is priced too high, those buyers aren’t coming to your door. A fairly priced house brings buyer traffic. Your real estate agent should know the local market and, through comparative market analysis, come up with the right selling price for your property.

Move-In Condition

Before putting your house up for sale, make it look as inviting as possible. That means cleaning, de-cluttering, fresh and neutral paint jobs where necessary and making any needed repairs. If it’s broken, fix it. First impressions are crucial, so enhance the home’s curb appeal with flowering plants, fresh mulch and carefully trimmed landscaping. Your goal is to have the best-looking house in your price range, in move-in condition for a buyer. You may want to spring for an inspector beforehand so anything you miss is pointed out, and there won’t be any unpleasant – and possibly deal-breaking – surprises for the buyer.

Check Out the Competition

Before listing your house, check out similar homes currently for sale. If possible, do more than just take an online tour and visit the open houses. See what these properties have, or don’t have, compared to your home. You’ll also want to seek out homes like yours that have sold recently, including their particular features and sale price. If you see a home comparable in type and price to yours that has been on the market for some time, ask your agent why he or she thinks the house is not moving, and how you might avoid the situation.

Consider an Appraisal

Appraisals are usually paid for by the buyer after making an offer. However, there’s no reason, if you are willing to spend the money, that you can’t hire an appraiser beforehand and find out exactly what your house is worth and price it accordingly. The appraisal is also a handy document to have on hand when buyers make offers.

Appeal to the Right Demographic

You can’t know who will eventually buy your home, but you can usually make a good guess on the demographic based on the type of dwelling and neighborhood. A single person might want a four-bedroom house, for example, but you’re more likely to attract a family with school-age children. Target your sale to the most likely sort of buyer. For families, tout a great school district in your ads. If your property is likely to appeal for first-time buyers, who may feel strapped for cash, mention the home warranty protection or some other amenity they will appreciate.

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If you’re looking to buy or sell a home or find a rental property, you need a knowledgeable, experienced realtor. Contact Island Realty Group LLC at 808-689-7407 or


Buyer Checklist

The Potential Buyer Checklist
Every potential buyer has a dream home in mind, but most realize their absolute dream home won’t come to fruition unless they can build a custom dwelling. Instead, buyers generally have a mental list of must-haves as well as deal breakers. Compile that list for your real estate agent, so he or she won’t waste your time – and theirs – showing homes that don’t meet the criteria. Before you start out, though, you need to know exactly how much home you can afford. That figure greatly impacts your wants versus needs.

Commuting Distance
If you or your spouse commute, there’s probably a distance beyond which you cannot go. Perhaps you don’t want more than a 45-minute commute, but for the right house you’re willing to commit to an hour of travel both ways. That’s the worst-case scenario – an hour and 10-minute commute just isn’t in the picture.

Minimum Number of Bedrooms and Baths
The number of bedrooms and baths depend not only on what the homebuyer needs for the moment, but for the future. A couple planning to have a family may want a minimum of three bedrooms, possibly four. Most people, except single buyers, will want more than one bathroom. So how about that older, three-bedroom home in a nice neighborhood with a sole bathroom? Let your agent know whether there is any flexibility on these issues, especially if it’s possible to install at least a half-bath down the line.

The Amount of Work You’re Willing to Do
Some people look for homes in move-in condition, without having to perform any upgrades at all. Others are handy and don’t mind putting some sweat equity into a home, especially if they get it at a good price. Let your agent know where you fall on this spectrum. There’s no point in showing a home that needs some work but has other favorable attributes if a potential buyer just wants to move in and relax.

Location, Location, Location
What are the buyer’s priorities when it comes to location? A couple without children or whose kids are grown may not care much about the school district, except in terms of resale value. Another buyer may consider the quality of the school district paramount and prove willing to purchase a less-than-ideal home if the neighborhood has good schools. As the buyer, are you willing to drive virtually everywhere, or do you want a neighborhood with a walkable scale and access to shops, restaurants and services? Some people want privacy above all else, while others crave community. When your real estate agent knows your priorities, the privacy buff won’t be shown homes in a highly developed area and the person seeking community won’t visit a house in the middle of nowhere.

Families and couples planning to have kids often have strong feelings regarding traffic. They usually want to live in residential areas with minimal traffic, so kids can play safely. Other buyers may prefer living on major roadways, especially if it knocks time off a commute. If heavy traffic is a deal breaker, let your agent know, so you aren’t shown an otherwise suitable house with too many motor vehicles passing by.

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If you’re looking to buy or sell a home or find a rental property, you need a knowledgeable, experienced realtor. Contact Island Realty Group LLC at 808-689-7407 or


March 19, 2018

Pet Owners – MUST READ!

Pets and Cleaning
When you’re selling your house, you must ensure that Fluffy or Fido is safely secured when potential buyers come to look at the property. If you’re holding an open house, it’s best to have pets off the premises for a few hours, if possible. There’s another factor when it comes to your furry friends. You want to ensure that even if they’re hidden away, their presence isn’t announced via odors, stains or shed hair.

The Smell Test
People who live with pets may get used to the milder scents that come with living with animals. Your real estate agent can let you know whether your home passes “the smell test.” If your home does have a lingering canine, feline or other pet odor, it’s essential to remove the smell before letting prospective buyers see the house.

Professional Cleaning and Repairs
If there are pet-related stains on the carpets, have them professionally cleaned. You could end up spending a lot of time and effort using over-the-counter products that don’t eradicate the stain. If the carpet is badly stained, you should replace it with one in neutral tones, and keep your pet away from it until you move.
As for odors, ask the professionals what they recommend for masking. You don’t want anything heavy that makes it appear you’re trying to hide something. Enzymatic cleaners can keep smells at bay without producing a strong odor on their own.
If your pet has incurred some serious damage in the house, get that fixed before putting the house on the market. If it’s not a task you can handle yourself, such as replacing scratched-up drywall, hire a contractor.

Daily Vacuuming
Unless your pet is of the non-shedding variety, vacuum your house daily. Not only does vacuuming remove pet hair, but it can remove the dander that triggers allergies in susceptible people. You don’t want someone with an allergy to have a bad reaction while looking at your house. If you don’t have a vacuum cleaner designed specifically for pet hair cleanup, invest in one.

Rearrange the Facilities
If you have cats, move the litter boxes to the most inconspicuous place possible. Switch to a covered litter box unless your cat doesn’t like them and keep the litter box scrupulously clean. Use charcoal additives or other litterbox deodorizers available at pet stores and online.
If you have a dog, you’re certainly picking up after your pet when he defecates in the yard. If your dog relieves himself on piddle pads, that’s another issue. If you can’t retrain your dog to go outside, place the pads adjacent to the back door and make sure they are gone if you have a showing scheduled.

Pet Grooming
How do you minimize odors when the selling process may take a while? If you own a pet that is especially smelly – which occurs more often in certain breeds and in older animals – it’s important to have the pet groomed regularly. You may also want to take your pet to the vet and find out whether there are any skin or other health issues contributing to odor or excessive shedding. A change in diet, along with vet-recommended supplements, may eliminate many odors and cut back on shedding.

Avoid the Run of the House
Try to keep your pet confined to certain parts of the house while your property is on the market, rather than letting the animal have the run of the house whether or not you are home. Much depend upon the configuration of your house and the individual pet but keeping the animal in an area of the house that is more easily cleaned, such as the kitchen, lowers the risk of pet odors emanating throughout the home. It also makes vacuuming up after stray pet hair much easier.

Contact Us
If you’re looking to buy or sell a home or find a rental property, you need a knowledgeable, experienced realtor. Contact Island Realty Group LLC at 808-689-7407 or


Mortgage Rates and Purchasing Power

How Mortgage Rates Affect Your Purchasing Ability

Mortgage rates are trending upward, although they are still low by historical standards. Even a rise of a few basis points, however, can affect your ability to buy the house of your dreams. When rates start rising, some people rush to buy a home fearing further increases, while others decide to either stay put or consider purchasing a smaller, more affordable home. Those borrowers who have a harder time qualifying for a mortgage may find themselves unable to secure financing.

Types of Mortgages

Today’s buyers have access to various types of mortgages, and that means more choices in purchasing ability. Besides conventional 30 and 15-year mortgages, where the rate is locked in for the life of the loan, other mortgage options include:
• Adjustable rate mortgages (ARM) – the interest rate changes at a certain period, usually annually, and it can move up or down. Initial rates are generally lower than conventional mortgages. If you’re lucky, subsequent rate changes trend downward. If they head in the other direction, you could end up paying a lot more. However, ARMs usually can’t rise more than a particular percentage at each adjustment.
• Option ARM – while this type of ARM indeed offers more options, there’s a downside. You could end up with negative amortization, or a growing loan balance due to interest rather than paying down the loan.
• Interest-only loans – these loans allow interest-only payments for a specific time period, usually up to seven years. After that, the borrower may either refinance or make a lump sum, “balloon” payment. Borrowers may also start paying off the principal, but the payment amount increases a great deal. Interest-only loans are good choices for those who do not intend to stay in a home for the long-term.
• FHA loans- these government-backed loans are a good choice for first-time home buyers, as down payments are lower than those required by conventional lenders.
• VA loans – honorably discharged veterans are eligible for these mortgages, which do not require a down payment.
• Mortgage buydown – this options allows buyers to lower their interest rates temporarily by paying money upfront for the mortgage. In effect, you are prepaying interest. In a 2 to 1 buydown, for example, the interest rate is 2 percent lower for the first year, 1 percent lower the following year, and then reverts to the normal rate in the third year.
Your lender can crunch the numbers on a type of loan, so you can increase your affordability even if interest rates go up. However, such extra affordability is temporary in many situations, so you need to feel comfortable that you can make higher payments when interest rates rise.

Home Prices

Mortgage rates also affect home prices. When mortgage rates rise significantly, home prices may drop. However, the law of supply and demand always rules, and currently there is still a strong demand for housing and a limited supply. If the housing market slows considerably, it is likely home prices will trend lower.

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If you’re looking to buy or sell a home or find a rental property, you need a knowledgeable, experienced realtor. Contact Island Realty Group LLC at 808-689-7407 or


February 23, 2018

Bidding Wars – How to Beat the Competition

Bidding Wars – How to Beat the Competition

In a hot market or when an especially desirable home is for sale, bidding wars often crop up. It’s not always the buyer with the largest offer who wins. While the seller wants the best price, other factors – such as when you can make the move – may influence the decision. Find out when the seller wants to move and see if your schedule can accommodate that. It gives you the edge over the bidder who needs a place right away, for example, and the seller wants time to find their next abode. The fewer contingencies you have, the better your odds.

Research Comps

No matter how much you want a house, you don’t want to pay more for it than you can afford and what it is worth. Unless you’re paying cash, your lender will put the brakes on giving you more money than the house’s value. Research the comps in the area, so you know the highest reasonable offer a seller might receive.

Make Sure Your Financing and Deposit Are in Order

You must receive preapproval from your lender. When you have that documentation, show it to the seller so they know your financing is in order and the deal won’t fall through due to lending issues. Of course, your lender must agree that the house is worth the asking price.
Put as much of a deposit down as you can. That shows the seller you’re serious. If you are lucky enough to pay cash for a home, do it. A cash offer is generally a trump card.

Escalation Clauses

Include an escalation clause, also known as a sharp bid, with your offer. The clause allows you to automatically up your bid to a certain limit. For example, the clause might read that you are willing to pay $5,000 more than the highest offer a seller receives, up to X amount. If the seller receives a $500,000 offer from a buyer, you’re willing to pay $505,000. However, the clause would limit the total price amount to $515,000, so you’re out of the deal if a buyer is willing to pay more than that.

A Note to the Seller

If you really love the home, send a handwritten note – not an email – to the seller. Tell them in a heartfelt way just why you love the house, without offering any criticism of the property. Do you think the seller has exquisite taste and you wouldn’t change a thing? Does the property have beautiful gardens and you would ensure these plants and flowers receive the best of care? Is it an ideal family home you can visualize your kids enjoying a wonderful childhood within? All these things could sway the seller in your direction. One caveat: Don’t include any photos of yourself and your family in the card or letter. That could inadvertently violate federal fair housing laws.

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If you’re looking to buy or sell a home or find a rental property, you need a knowledgeable, experienced realtor. Contact Island Realty Group LLC at 808-689-7407 or


Owning A Rental Property

What to Know When Owning a Rental Property

Many people dream of living in Hawaii, so a rental property may prove a great investment. However, there’s always the possibility owning a rental property can become a giant headache. Avoid the latter by assessing whether you are cut out to be a landlord and by following property rental best practices.

Rental Property Considerations

When buying a rental property, keep in mind that mortgage insurance doesn’t apply to investment properties. That means you must plan on making at least a 20 percent down payment.
How will you handle repairs? If you’re handy and can do all but the most major repairs yourself, that’s a plus, but many landlords don’t live near their rental properties. You may want to hire a property management firm to take care of necessary repairs and other business. The fee you pay the property management firm does cut into your income – the average fee is 10 percent of the rent – but it’s generally your best solution if you aren’t handy or are primarily an absentee landlord.
If the property is a fixer-upper, you will need either serious handyman skills or deep pockets. If you’re just starting out as a landlord, it’s wise to go with a property requiring only minor repairs and get some experience under your belt. You’ll then have a more realistic idea about taking on a bigger project down the road.

Tenant Screening

Careful tenant screening makes the difference between a successful and disastrous rental experience, so it’s absolutely critical. Perform a thorough background check on every applicant. One plus: In Hawaii, landlords can charge potential tenants a non-refundable application fee, with no limit on the amount.
One way to separate the tenant wheat from the chaff while protecting yourself is requiring tenants to carry rental insurance. Such insurance isn’t expensive, and can possibly keep you out of court if something happens to the tenant’s property. Tenants might assume the landlord’s insurance covers their personal items, but that’s not the case. If there’s an issue and the tenant suffers a loss, they might try to sue you if they don’t have rental insurance. Mandatory rental issues protects both parties, and if a tenant can’t afford another $20 a month for premiums, making rent payments on time may also become a problem.

Do Your Homework

Hawaii must abide by the federal Fair Housing Act, but there are also state laws relating to landlord/tenant issues. Familiarize yourself with these laws before becoming a landlord.
Before buying a property, figure out how much you can expect in annual income, your approximate annual expenses and possible risks. Such risks include vacancies, above-average repair costs, non-payment of rent and legal fees if you must proceed with an eviction.
Speak with an accountant familiar with rental properties and have them go over the numbers with you. It’s money well-spent.

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If you’re looking to buy or sell a home or find a rental property, you need a knowledgeable, experienced realtor. Contact Island Realty Group LLC at 808-689-7407 or


January 12, 2018

Strategies for Younger Buyers

Strategies for Younger Buyers Purchasing a Home

As millennials head into their initial home-buying years, the real estate market is ready for this huge demographic influx. Many young people think they can’t afford to buy a home, but they may not know about the tools available to help make home ownership a reality.

Loan Options and Saving for the Down Payment

Hawaiian real estate is expensive, but the 20 percent down payment found in cheaper areas is not the rule here. Many first-time buyers put down 5 percent, which for an average $600K home means saving at least $30K and financing the remaining $570K. Assiduous budgeting and saving can get you to that $30K figure within a few years, but there is another avenue – which does not involve gifts from relatives. That’s using money from your retirement savings account to help finance a first-home purchase. If you take the money from a 401(k), you will have to pay a 10 percent penalty. Take the money from an Individual Retirement Account (IRA) for that first home purchase, however, and there is no penalty. There is a lifetime limit of $10K, but for a couple who each take that amount from their IRAs, they are 2/3 of the way toward that 30K down payment.

If a millennial is a veteran, he or she may qualify for a VA loan, which may not require any down payment. VA loans also do not require private mortgage insurance.
This is a generation who, due to the Great Recession and unprecedented student debt, tended to live with their parents longer than the Baby Boomers. If living with the parents for a while can help millennials save money for a down payment on their own house, it’s a worthwhile tradeoff.

Millennials may consider a Federal Housing Administration (FHA) loan, which does not require as large a down payment – perhaps as small as 3.5 percent of the dwelling’s price. Since an FHA loan is guaranteed by the government, qualifying is easier than with conventional mortgage loans. FHA loans are available for those with lower credit scores. However, loan amounts are not as large, and you will have to pay a mortgage insurance premium. These premiums can cost substantially more than the private mortgage insurance needed for some standard loans.

The Right Realtor

Working with the right realtor can help millennials make their home ownership dreams come true. A real estate agent who specializes in marketing to millennials is not only technologically savvy – an absolute must for this generation – but can guide clients toward affordable homes, appropriate mortgage choices and assist in answering any questions regarding the home purchase process. Since most millennials are extremely cost-conscious, the right realtor helps save them money in ways large and small. Many millennials simply lack the financial knowledge needed to make homebuying and mortgage decisions, and the right realtor can act as instructor.

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If you’re looking to buy or sell a home you need a knowledgeable, experienced realtor. Contact Island Realty Group LLC at 808-689-7407 or


December 19, 2017

Renting vs. Buying: Pros and Cons

Renting vs. Buying: Pros and Cons of Each

Should you rent a home or are you better off buying? The answer depends on your individual circumstances, preferences and your stage of life. The right answer to the question may prove different when you’re 25 as opposed to a decade later, and your financial status at any given time.


Pro: In terms of upfront costs, renting is less expensive. While you are responsible for the required security deposit and monthly rental fee, you don’t have to worry about saving up a substantial down payment, as occurs when purchasing property. Pro: If you want flexibility, you can simply move elsewhere at the end of your lease, rather than go through the often time-consuming and stressful process of selling your house.
Pro: Budgeting is simpler, since rent is a fixed amount.
Pro: The landlord takes care of any necessary property repairs, and in most cases, it won’t cost you a dime. There are exceptions, depending on the language of your lease and the nature of the repairs.
Con: The lease spells out restrictions on your use of the rental unit. Failure to abide by them can cost you the tenancy. Those restrictions may include having another person live with you if their name is not on the lease. If you bring a pet into a rental dwelling where animals aren’t allowed, you will probably have to rehome it if your landlord discovers you are breaking the lease.
Con: Rent increases at the end of a lease are often steep.


Pro: When you rent, that money is gone at the end of every month. When you buy, you build equity in your home with each mortgage payment. At some point, you may have enough equity to borrow against it in the form of a home-equity loan to pay for college, a car or some other pricey necessity. You can also make extra principal payments to own your home outright sooner. When you sell, you do not have to pay taxes on capital gains above a certain amount.
Pro: When you own your home, you aren’t subject to a landlord’s rules on pets, redecorating, remodels or other strictures that are an owner’s prerogative.
Con: You must make repairs yourself or call the appropriate professional when something goes wrong, and it is all on your dime unless there is a warranty on the item in question. Repairs and other house-related expenses can also blow a hole in your budget.
Con: While renters can get away with relatively cheap renter’s insurance to protect their belongings, homeowners must pay for home insurance, property taxes, water and sewer service and possibly flood insurance, depending on the area.

The Wild Card

One wild card in the decision to rent or buy involves the Republican Congress’ tax overhaul. States with high state and local property taxes, as well as high home prices – such as Hawaii – will suffer if property tax and mortgage interest deductions are limited. Buyers will have to factor in extra costs, while landlords will likely pass those additional costs onto renters.

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If you’re looking to buy, sell or rent a home, you need a knowledgeable, experienced realtor. Contact Island Realty Group LLC at 808-689-7407 or

Buying and Selling During the Holidays

Things to Know Before Buying or Selling a Home During the Holidays

Given their druthers, most people prefer not to buy or sell a home during the holidays. It’s such a busy season in other aspects of life, but there are certain advantages to holidays showings and sales: People in the market to buy or sell at this time of year are motivated. Unlike other parts of the country, foul weather isn’t an issue in Hawaii. In fact, you may find “snowbirds” who want to move to a warm climate as soon as possible, and have the time to look for a new residence over the holidays.

Minimal Decorations

If you’re a seller, keep the holiday decorations to a minimum. Your home should feel welcoming to people of all faith traditions. Many holiday decorations overwhelm or clutter rooms, and that’s not conducive to selling your home.

Less Competition for Buyers

Buyers face less competition for available homes during the holiday season. Holiday buyers are more committed to purchasing a home rather than just browsing through open houses. A plus for buyers may prove a negative for sellers, as they’re more likely to receive lowball offers. The downside for buyers is that, with less inventory available, they may not find a home suiting their needs.

Closing Delays

An offer on a house made in early to mid-December is unlikely to go anywhere until after the start of the new year. Everyone involved in the closing – including lenders, appraisers and home inspectors – is more likely to travel or work fewer hours during this time. Keep that in mind if you want to close on the home by the end of the year for tax purposes. A buyer with children who wants their kids in a new school system after the holiday break should realize the process may take longer than they anticipated. The same holds true for relocation buyers starting a job in the beginning of the year.

House Showing Inconveniences

If you’re extra busy during the holidays, house showing becomes an inconvenience. You want your house to look neat and clean, but that’s often difficult when you have gifts and wrapping paraphernalia scattered around or are involved in serious holiday cooking and baking projects. Add shopping, parties and other holiday happenings, and you may not simply have time to keep your house looking up to par.

Whether buying or listing a house for sale, waiting until January generally makes more sense for both parties. However, if you can deal with the inherent inconveniences of house shopping during the holidays, go ahead and seek your new home or list your current one. It could end up a savvy decision.

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If you’re looking to buy or sell a home you need a knowledgeable, experienced realtor. Contact Island Realty Group LLC at 808-689-7407 or

November 13, 2017