What happens if you're the winning bidder - but can't come up with the money?

Today an auction was published for a unit I knew I had seen before: Elima Lani #1803.  I had always been told that if you bid on a unit and cannot complete the purchase, that your 10% bid would be returned, less the expenses for re-publishing the notices and holding the auction again.  However, I had never seen it happen.  

Apparently, after winning the bid and depositing his 10% with the commissioner, the bidder could not come up with the balance of the purchase price.  From the court minutes: 

Court: Orders the commissioner to re-auction as a NEW auction and to publish in a newspaper. Will GRANT plaintiffs motion and CANCEL the sale to the high bidder based on the representation that were unable to secure financing but will maintain possession of the 10% deposit until the costs to re-auction are sorted. 

Commissioner: Tenant moved out; inquires as to open houses and to rechecking out the property. 

Court: YES the commissioner shall treat this as a new auction and hold more open houses. 

Bidder: Pleads for the Court to release his deposit due to serious financial hardship; 

Court: The order states the deposit is to be held

I am interested to continue watching this one to see how much of his deposit the bidder is actually able to recover.  

Please remember: 

• Don't bid unless you have the full amount readily available to you. 
• Financing is very risky during a court foreclosure process.
• Just because this judge is willing to return some of this bidder's deposit, does not mean other judges would do the same under other circumstances.  Do not count on receiving any of your 10% deposit back if you cannot complete the purchase.  

Be sure to Subscribe to email alerts do you don't miss the updates as this case makes its way back through the new auction and the final accounting of bidder's deposit return is completed.  

Kyra Bronson R(B) 23930

LUVA Real Estate

68-3883 Lua Kula Street #1803, Waikoloa, HI 96738 - Foreclosure Notice

 From West Hawaii Today 5/31/23:

Notice #: 0001417825-01
Foreclosures

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NOTICE OF FORECLOSURE SALE Pursuant to the verbal orders of the court concerning Plaintiff’s Motion for (1) Cancellation of Sale; (2) for Forfeiture of Purchaser’s Deposit; and (3) for Court Instructions, filed on April 6, 2023, in U.S. Bank Nat. Assn., et al. v. Chinen, et al., Civil No. 15-1-395K, Third Circuit Court of the State of Hawaii, the Commissioner identified below has been directed to sell the following property at a public auction. DESCRIPTION: 68-3883 Lua Kula Street #1803, Waikoloa, HI 96738, TMK: 3-6-8-003-004-0083, a 2-bedroom, 2-bathroom Elima Lani condominium reportedly built in 1988 with 854 square feet of living area, and lanai. Fee simple. OPEN HOUSES: June 3, 2023 from 2:00 p.m. to 4:00 p.m., and June 10, 2023 from 10:00 a.m. to 12:00 p.m. PUBLIC AUCTION: July 7, 2023 at 12:00 Noon at the Keahoulu Courthouse, 74-5451 Kamakaeha Ave, Kailua Kona HI 96740, to the south of the “Ho’o Pohaku” sculpture in the shade near the northwest corner of the building. TERMS OF SALE: No upset price. Property will be sold in “as is” condition with no warranty of title or possession or any other warranties. No less than ten percent (10%) of the highest successful bid price must be deposited with the Commissioner at the close of the auction, and payment to be made in cash or cashier’s check. Potential bidders must be able to provide proof of their ability to comply with the 10% bid requirement or status as a party entitled to credit bid prior to participating in the public auction. The balance of the purchase price shall be paid to the Commissioner upon approval and confirmation of the sale by the Third Circuit Court of the State of Hawaii and tender of the document(s) transferring title. At the confirmation hearing, the Court may allow further bidding on the condition that the initial opening bid must be at least one hundred ten percent (110%) of the highest bid at the public auction. All costs and expenses of securing possession of the property and closing, including conveyance and recordation fees and conveyance taxes, shall be paid by the successful purchaser. The ten percent (10%) down payment may be forfeited in full or in part if the successful purchaser fails to pay the balance of the purchase price after court confirmation of the sale. Neither the availability of title insurance nor securing possession of the property shall be a condition of closing. Real estate brokerage commissions will not be paid from sales proceeds. The sale will not be final until approved by the court. For further information contact Daniel S. Peters, Esq., 74-540 Honokohau Street, Kailua-Kona, Hawaii 96740, (808) 331-1199, daniel@danielspeters.com, Commissioner. (WHT1417825 5/31, 6/7, 6/14/23)

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Kyra Bronson R(B) 23930

LUVA Real Estate

Maealani Place, Volcano, Island and County of Hawaii - Foreclosure Notice

 From Hawaii Tribune Herald 5/21/23:

Notice #: 0001416727-01
Foreclosures

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NOTICE OF FORECLOSURE SALE CIVIL NO. 1:21-CV-00261 DKW-KJM United States District Court for the District of Hawaii MFY Funding LLC v. Ohia Opportunities, LLC; Kanoa Ross Bristol, et al. PROPERTY ADDRESS AND DESCRIPTION: Two (2) adjoining properties situated on Maealani Place, Volcano, Island and County of Hawaii in the residential project known as the Volcano Golf Course Lots and bearing Tax Map Key Nos. (3) 9-9-002: 021 and 022. A single-family fee simple home is located on the two parcels containing approximately 0.45 acres or 20,909 square feet. The house covers approximately 1,822 square feet and contains five (5) total rooms: three (3) bedrooms, two and one half (2.5) baths with kitchen, pantry and two separate spacious living and family rooms. Covered garage (approximately 600 sq. ft.); outside laundry and concrete areas (approximately 280 sq. ft.). A separate stand-alone outdoor storge building (approximately 300 sq. ft.) exists. Ample outdoor open spaces with dense vegetation. AUCTION DATE: WEDNESDAY, JUNE 21, 2023 at 12:00 O’CLOCK NOON, Front entrance to Hale Kaulike Courthouse Building, 777 Kilauea Avenue, Hilo, Hawaii. OPEN HOUSES: BY ADVANCE APPOINTMENT ONLY on Sunday, June 4, 2023 from 2:00 p.m. to 4:00 p.m. and on Sunday, June 11, 2023 from 2:00 p.m. to 4:00 p.m. To attend the open houses, you must make an advance appointment to attend the open house on the designated dates. Walk-ins will not be granted access. Please contact Commissioner to make an advance appointment. TERMS OF SALE: Property will be sold in “AS IS” condition, without any express or implied warranties or representations of any kind, at public auction with 10% of the highest bid payable in cash, certified or cashier’s check at the close of auction. THERE SHALL BE NO UPSET PRICE. Balance of highest bid shall be paid in full upon court approval and confirmation of sale. Potential bidders must be able to provide proof of ability to comply with the 10% bid requirement BEFORE participating in the public auction. Purchaser shall pay ALL costs of closing, including, but not limited to, escrow fees, recordation fees, conveyance taxes and is responsible for securing possession of the Property upon escrow closing and recordation. Neither the availability of title insurance nor securing possession of the Property shall be conditions of sale closing. Sale closing usually occurs not later than thirty-five (35) days after the entry of the order confirming sale. Real property taxes shall be prorated as of the date of closing and recordation of the documents transferring title. The Property, including all improvements, will be sold without personal property. Property is currently unoccupied. ALL SALE AND TERMS OF SALE ARE SUBJECT TO COURT CONFIRMATION. DUE DILIGENCE INFORMATION: A Foreclosure Fact Sheet containing additional limited information is available upon request from the Commissioner. The information made available has been collected from various sources including tax records, a title report, and pleadings and appears to be reliable but it is not guaranteed. Photographs are available upon request. Potential bidders are expressly advised to perform and complete their own investigation and due diligence prior to bidding. For further information, contact Wayne K. T. Mau, Commissioner, 1003 Bishop Street, Pauahi Tower, Suite 320, Honolulu, Hawaii 96813; Telephone (808) 781-8494 (cell); (808) 380-8498 (ofc.); email: wayne@wmaulaw.com (HTH1416727 5/21, 5/28, 6/4/23)

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Kyra Bronson R(B) 23930

LUVA Real Estate

What is a Tax Lien sale vs a Tax Auction? NO TAX LIEN SALES IN HAWAII!

Recently I kept seeing a Facebook ad wanting me to sign up to learn about how to buy tax liens in Hawaii.  🙄  Fortunately I know that Hawaii County doesn't do tax lien sales, they do tax auctions.  

In many counties on the mainland, instead of letting a large tax balance build up over several years and then doing a foreclosure, those county tax offices auction off tax liens.  Typically you pay ONLY the amount of taxes owed, and the bidding is for the interest rate you will receive if the owner pays it off.  It starts at 18% and you bid down to zero.  The bidder who bids to pay off that year's taxes in full at the lowest interest rate wins the lien.  The following year, that same bidder is given the opportunity to again pay off the taxes for a tax lien.  Once there are three years worth of liens, the bidder may take the property to court for tax foreclosure.  This system is much more fair to the owner because they get three years to pay off their tax liens, and they are only required to pay the taxes plus the interest rate the bidder bid.  It's also much nicer for the bidder because although they have to wait through a three year process, they have the chance to obtain a property for ONLY the past due taxes, no bidding up.  

Contrary to this commonly used tax lien system, Hawaii County does a tax foreclosure.  They let the amount of taxes pile up for three or more years, and then take the property to auction where the amount gets bid up, sometimes to $100k or more over the tax liability.  This is very unfair to the prior owner who then has to come up with all of that extra money, at 12% interest, if they want to redeem their property.  It is also not nearly as lucrative for the bidder since they are getting the properties at close to market value, not nearly the bargain they deserve since they are buying a property that now has a tax auction in the chain of title.  The one big benefit is that the foreclosure part is already done.  Unlike the tax lien system where the bidder is responsible for finalizing the foreclosure, in Hawaii the county does that step.  

So, don't get duped and sign up for a class on how to buy Hawaii tax liens.  We only do direct tax foreclosures here!  

Tax Lien System	Tax Foreclosure System
Bidder must buy three consecutive liens, then bidder forecloses.	County accumulates a tax owed balance for three or more years, then county forecloses.
County get their taxes paid in full every year.	County has huge amounts of taxes due while they process the foreclosures.
Bidding is on the interest rate, starts at 18% (depending on county) and bids down.	Bidding is on the purchase price.  Starts at taxes owed plus legal fees and goes up.
Owner still owns – can pay off tax liens through the county and the county pays back the bidder.  Much easier to pay off because it is ONLY taxes owed plus interest.	Bidder owns immediately.  Prior owner has one year to redeem the property directly from the bidder by paying the winning bid amount + 12% + all escrow fees.  Difficult to pay off because it is the market price bid at auction plus interest and escrow fees.  Typically a lot more than what was owed in taxes.  County does not assist in the redemption process.
Bidder must foreclose after three years	County forecloses as part of the process
Usually online bidding	In person bidding

County of Hawaii Tax Auction June 2023

It's that time of year again!  The Hawaii County Tax auction has been scheduled for June 8th at the Afook-Chinen Civic Auditorium starting at 9am.  

Here is a link to the county site with the auction list and the folder full of litigation guarantees:  https://records.hawaiicounty.gov/weblink/Browse.aspx?dbid=1&startid=55713&cr=1

Here are the links to understanding tax auctions: 

Hawaii County Tax Auction FAQ

How to work the tax list to prepare for auction

And finally, a recap of January's auction so you can see how it might go: 

January 2023 tax auction recap

January's auction was held at the Sangha hall which was a great location inside, but the parking situation was dismal.  This year it looks like it will be back at the Afook-Chinen Civic Auditorium which had tons of parking but it was very difficult to hear what was happening.  I miss the days when the attendance was low enough that the auction could be held at Aunt Sally's.  

The publication of the list was also different this year, so maybe attendance will be down.  Typically the list is published along with bank foreclosures and association foreclosures in the online classified section of the West Hawaii Today and the Hawaii Tribune Herald.  This year, for some reason, it was only published in their print or online print-reader version, so if you didn't have a paid subscription to the paper, you wouldn't have seen the notice. I only saw it because I routinely check the county site for it starting in December and May.  

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11-2828 Lehua Street, Kurtistown, Hawaii 96760 - Foreclosure Notice

 From Hawaii Tribune Herald 5/17/23:

Notice #: 0001415174-01
Foreclosures

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NOTICE OF FORECLOSURE SALE Pursuant to the Findings of Fact, Conclusions of Law and Order Granting Plaintiff’s Motion for Summary Judgment Against All Defendants and for Interlocutory Decree of Foreclosure; Exhibit “A” filed on June 16, 2021, in New Residential Mortgage LLC v. Marshall D. Chinen, as Successor Personal Representative of the Estate of Frederick Turner King, et al., Civil No. 3CC151000247, Circuit Court of the Third Circuit, State of Hawaii, the undersigned Commissioner will sell the following described property at public foreclosure sale at the date and time set forth below: PROPERTY: All of that certain parcel of land situate at Keaau, District of Puna, Island and County of Hawaii, State of Hawaii, being LOT 6937, as shown on Map 51, filed in the Office of the Assistant Registrar of the Land Court of the State of Hawaii with Land Court Application No. 1053 (amended) of W. H. Shipman, Limited, and containing an area of 2.00 acres, more or less. Bearing TMK (3) 1-1-042-265. STREET ADDRESS: 11-2828 Lehua Street, Kurtistown, Hawaii 96760 III. Land Use Designation: County Zoning: A-3A. IV. Improvements: Built in 2002. One (1) bedroom, One (1) bath dwelling containing 474 square feet, as per County of Hawaii records. TERMS: The property will be sold “as is” at public auction with NO UPSET PRICE, and with ten percent (10%) of the highest bid payable in cash, certified or cashier’s check at the fall of the hammer; balance is payable upon delivery of documents transferring title; purchaser shall pay all costs of escrow, conveyancing, recordation and conveyance tax, and shall be responsible for securing possession; SALE SHALL NOT BE FINAL UNTIL APPROVED AND CONFIRMED BY THE COURT. The purchaser shall pay closing costs, including but not limited to costs of escrow fees, title insurance premiums, conveyance document preparation fees, accrued and unpaid real property, conveyance tax, accrued and unpaid ground rent payments, recordation and costs of securing possession after closing. The ability of the purchaser to secure title insurance shall not be a condition of closing. NO OPEN HOUSES WILL BE HELD. SALE DATE: The lot will be auctioned for sale on Thursday, June 15, 2023, beginning at 12:00 noon, at the front entrance of Hale Kaulike (Hilo Judiciary Complex), 777 Kilauea Avenue, Hilo, Hawaii. For legal description of property to be conveyed and for further details about the sale, contact JEREL I. YAMAMOTO, Commissioner, 187 Kapiolani Street, Hilo, Hawaii 96720 (phone (808) 961-0641); email: jerel@noyhawaii.com. ALL INFORMATION IN THIS NOTICE SHOULD BE INDEPENDENTLY VERIFIED BY THE PURCHASER BEFORE BIDDING. JEREL I. YAMAMOTO Commissioner (HTH1415174 5/17, 5/24, 5/31/23)

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1073 E. West Kawailani Street, Hilo, Hawaii 96720 - Foreclosure Notice

 From Hawaii Tribune Herald 5/12/23:

Notice #: 0001414990-01
Foreclosures

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NOTICE OF FORECLOSURE SALE Pursuant to Findings of Fact and Conclusions of Law Order Granting Plaintiff’s Motion for Default Judgment and for Interlocutory Decree of Foreclosure Filed September 12, 2022, filed on November 25, 2022 in Bank of New York Mellon Trust Company, N A. as Trustee for Mortgage Assets Management Series I Trust vs. The Secretary of Housing and Urban Development, et al., Civ. No. 3CC151000064, Circuit Court of the Third Circuit, State of Hawaii, the undersigned Commissioner will sell the following described property at public foreclosure sale on the date and at the time set forth below. PROPERTY DESCRIPTION: Real Property situate at Waiakea, South Hilo, Island and County of Hawaii, State of Hawaii, being Lot 7 of the Golden Shower Tree Estate Subdivision, Unit 1-A area 11,059 square feet, more or and further identified as TMK:(3)2-4-070-011, address 1073 E. West Kawailani Street, Hilo, Hawaii 96720. The house is of double wall wood frame construction, with a corrugated ir on roof, and contains three bedrooms and one and one half bathrooms. The area under roof is 1,032 square feet. The house was constructed in 1985 TERMS OF SALE: The property will be sold “as is” at public auction with no upset price. The successful bidder at the auct ion shall make a down payment to the Commissioner in an amount not less than ten percent of the successful bid price, such payment to be made at the close of the auction in cash, cashier’s check or certified check. Prior to bidding, interested parties must show the Commissioner their ability to make the required down payment, in such form as aforesaid, immediately upon close of the bidding. At the Court’s discretion, the ten percent down payment may be forfeited in full or in part if the successful bidder fails to timely close. The balance of the successful bid price shall be paid to the Commissioner upon approval and confirmation of the sale. All costs and expenses of closing shall be paid by purchaser, including, but not limited to costs of escrow fees, title insurance premiums, conveyance document preparation fees, prorated real property and conveyance tax, recordation and costs of securing possession after closing. The inability of purchaser to secure title insurance or financing shall not be a condi tion of closing. SALE SHALL NOT BE FINAL UNTIL APPROVED AND CONFIRMED BY THE COURT. OPEN HOUSE: No Open House, by Order of the Court. SALE DATE: Tuesday, June 13, 2023, 12:00 noon, at the front entrance to the Hale Kaulike Courthouse Building, 777 Kilauea Avenue, Hilo, Hawaii. COMMISSIONER: Stephen J. Menezes, 441 Kipuni Street, Hilo, Hawaii 96720; Telephone (808)934-8916. (HTH1414990 5/12, 5/19, 5/26/23)

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11-3876 Ruby Avenue, Volcano, HI 96785 - Foreclosure Notice

 From Hawaii Tribune Herald 5/12/23:

Notice #: 0001414031-01
Foreclosures

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NOTICE OF FORECLOSURE COURT ACTION: Pursuant to the Findings of Fact, Conclusions of Law and Order Granting Summary Judgment Against All Defendants in Civil No. 3CCV-20-0000128, in the Circuit Court of the Third Circuit, State of Hawaii, the subject property will be sold at public foreclosure sale. PROPERTY: 11-3876 Ruby Avenue, Volcano, HI 96785. TMK#: (3) 1-1-009-021-0000. OPEN HOUSES: May 20 and 27, 2023 from 10:00 a.m. to 2:00 p.m. AUCTION: July 5, 2023 at 12 noon, Front Lanai, State of Hawaii Judiciary Complex, 777 Kilauea Ave., Hilo, HI. SALE TERMS: Property sold “AS IS” without any representations or warranties. No upset price. A bidding party must show the ability to make a 10% down payment of his highest bid by cash, money order, certified or cashier’s check. Plaintiff may credit bid its down payment up to its secured debt. At the Court’s discretion a down payment may be forfeited in full or part if the high bidder fails to pay the balance of his bid. Costs and fees of closing, not limited to costs of conveyancing, conveyance documents, tax, escrow/recording fees, proof of title or title insurance, notary fees, costs of securing possession of the property, shall be paid by the purchaser. Neither the availability of title insurance nor securing possession shall be a condition of closing. COMMISSIONER: Craig Sadamoto, 614 Kilauea Ave., #16, Hilo, HI 96720 (Phone: 9367-1392). (HTH1414031 5/12, 5/17, 5/21/23)

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48 Leimamo St., Hilo, Hawaii 96720 - Foreclosure Notice

 From Hawaii Tribune Herald 5/12/23:

Notice #: 0001414030-01
Foreclosures

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NOTICE OF FORECLOSURE COURT ACTION: Pursuant to the Order Granting Plaintiff’s Motion for Summary Judgment Against All Defendants in Civil No. 3CC171000375, Third Circuit Court, State of Hawaii, the subject property will be sold at public foreclosure sale. PROPERTY: 48 Leimamo St., Hilo, Hawaii 96720. TMK#: 3-2-4-030-024-0000. AUCTION: June 21, 2023 at 12 noon, Front Lanai, State of Hawaii Judiciary Complex, 777 Kilauea Ave., Hilo, HI. SALE TERMS: Property sold “AS IS” without any representations or warranties. No upset price. A bidding party must show the ability to make a 10% down payment of his highest bid by cash, money order, certified or cashier’s check. Plaintiff may credit bid its down payment up to its secured debt. At the Court’s discretion a down payment may be forfeited in full or part if the high bidder fails to pay the balance of his bid. Costs and fees of closing, not limited to costs of conveyancing, conveyance documents, tax, escrow/recording fees, proof of title or title insurance, notary fees, costs of securing possession of the property, shall be paid by the purchaser. Neither the availability of title insurance nor securing possession shall be a condition of closing. COMMISSIONER: Craig Sadamoto, 614 Kilauea Ave., #16, Hilo, HI 96720 (Phone: 937-1392). (HTH1414030 5/12, 5/17, 5/21/23)

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481 Heahea Street, Hilo, HI 96720 - Foreclosure Notice

 From Hawaii Tribune Herald 05/01/2023:

Notice #: 0001414063-01
Foreclosures

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NOTICE OF FORECLOSURE SALE Pursuant to Plaintiff’s FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER GRANTING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT AGAINST ALL DEFENDANTS AND FOR INTERLOCUTORY DECREE OF FORECLOSURE, filed on March 21, 2023, in the case entitled MORTGAGE ASSETS MANAGEMENT, LLC v. LILLIAN FLORENCE SANTIAGO et. al., Civil No. 3CCV-22-0000196, in the Circuit Court of the Third Circuit, State of Hawaii, the Court-appointed Commissioner will sell the following described property at public foreclosure sale at the date and time set forth below: Property Description: Property located at 481 Heahea Street, Hilo, HI 96720, TMK No. 3-2-4-019-132-0000. Property consists of a home built in 1978 with 2 bedrooms and 2 baths. House is 1,554 sq. ft. and is on a 15,073 sq. ft. lot. Heahea Street is located above and close to the Hilo Municipal Golf Course. Open Houses: Saturday, May 20, 2023, 10:00 a.m. to 1:00 p.m. Sunday, May 28, 2023, 10:00 a.m. to 1:00 p.m. DATE AND LOCATION OF SALE: The property (house and lot) shall be sold on Wednesday, May 31, 2023 at 12:00 noon at , at the flagpole of the Hale Kaulike (new State Court Building), 777 Kilauea Avenue, Hilo, Hawaii. TERMS OF SALE: There shall be no upset price. The property shall be sold “as is”, “where is” condition without warranties of any nature, express or implied, to the highest bidder. Plaintiff, and all parties are authorized to purchase the property at the foreclosure sale. The successful bidder at the sale shall make a down payment to the Commissioner in an amount not less than ten percent (10%) of the highest successful bid price at the fall of the hammer in cash or certified cashier’s check, the balance of the purchase price to be paid concurrently with the conveyance of the Property to the purchaser. Plaintiffs are authorized to be a purchaser at said sale and the amount determined by this Court to be due and owing to Plaintiffs under the mortgage note at issue may be credited against the total bid price which Plaintiffs shall make at said sale. If Plaintiffs are the successful bidder at said sale, the ten percent (10%) down payment will not be required of Plaintiffs up to the amount of its secured indebtedness. Prior to bidding, any person not hereby authorized to credit bid must show the Commissioner such person’s present ability to make the required down payment in such form as the commissioner may determine. At the Court’s discretion, the 10% down payment may be forfeited in full or in part if the purchaser shall fail to pay the balance of the purchase price as hereinafter set forth. The balance of the purchase price shall be paid to the Commissioner upon approval and confirmation of the sale. All costs and expenses of closing, including without limitation, the costs of conveyance, preparation of the conveyance document, conveyance tax, escrow and recording fees, any proof of title or title insurance, and notary fees, as well as the costs of securing possession of the Property, shall be the responsibility of and paid by the purchaser. Neither the availability of title insurance nor securing possession of the Property shall be a condition of closing. COMMISSIONER: For fact sheet or other information, contact: PHILLIP L. CAREY, 688 Kinoole Street, Suite 105, Hilo, HI 96720. Tel # (808) 934-9711. careylaw@hawaii.rr.com. (HTH1414063 5/01, 5/08, 5/15/23)

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