People see the term “Real Estate Lottery” in Hawaii and immediately think… “I thought there is no gambling in Hawaii. You are right, as Hawaii is one of two states (the other being Utah) that has laws against all forms of gambling, including lotteries. However, what Hawaii does have is Real Estate Lotteries. With prices in Hawaii booming and demand booming as well, Hawaii has brought back the Real Estate Lottery.
Here are just a few examples of the lottery at work:
- DR Horton is accepting lottery applications until March 28 for 20 units at its Ka Malanai project in Kailua. This is the builder’s second public lottery for the condo project. Prices start at $520,155 for a one bedroom, $776,575 for a two bedroom and $875,290 for a three bedroom.
- Downtown Capital LLC is holding two lotteries for its second tower in Kakaako at 801 South St. Prices range in the affordable-housing complex are from $352,000 to $699,000. The deadline for the first lottery is March 28.
- Castle and Cooke’s lottery for its first phase of Hoonani in Ewa Villages began in December. Single-family homes ranged from $450,000 to $650,000 in the first phase.
Why Lotteries and How Do They Work?
Since demand is so high right now in Hawaii the lottery is designed to give the greatest amount of people the chance to own something in a development of their choice. However, you still need to remember that you are not winning a free home or condo. The lottery winner simply gets the first chance to apply for and own a home in the area they desire.
If you are considering being a part of one of these lotteries, then here are a few things you will want to keep in mind:
See if you qualify. Some units have owner-occupancy requirements and income restrictions.
Consult with a professional. Get your real estate agent’s opinion on the neighborhood, pricing and the purchase contract.
Know all the timeframes. Know when the lottery is being held, when the deposits are due, when the last day is to cancel is without forfeiting any money and when construction will be completed.
Keep in mind mortgage rates are rising. The mortgage rates you see today will most likely not be around when the project is built a year or two from now. Changing rates can affect your monthly payments and your lender may need to qualify you at a higher projected rate.
Read the fine print, house rules, condo documents and everything else. Some of these projects have unique terms, so it’s important to be aware of them.
Know what you’re buying. Find out where the parking stall is, what the maintenance fee includes or doesn’t include as well as the ins and outs of the contract.
Good luck out there!