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Hope I can get this worded right...
Buyer makes an offer on some land and requests as part of the deal the SSPP be paid by the buyer. That's fine so far.
Now they want the SSPP to be paid out of escrow.
This is not my transaction but that of a friend, but I want to understand why it would be done this way instead of just paying X dollars less the amount of the SSPP for the land.
I did tell them to ask their agent, tho'.
Puna: Our roosters crow first
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sounds like your realitor doesnt understand sspp. if bare land all the buyer is saying is that it is his responsibility " down the road". if he ever develops and wants helco then they(helco) will spread it out over years. but to pay out of escrow? unless the seller paid this and is trying to tack on to the land price? sounds just like people on all sides dont understand sspp.
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The seller has not paid the SSPP, but the buyer is requesting it to be paid by the seller. I assume they're wanting to develope the lot right away. I said buyers can ask for anything they want and is up to the seller to decide if those terms are OK. The only way SSPP would HAVE to be paid is if the owner wants HELCO.
Puna: Our roosters crow first
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I bothered to read Rule 13-S.
Long story short and IMHO: the SSPP is only "worth it" if you pay in full and actually get the electricity turned on. Otherwise, you're financing the construction (at 9%, for up to 30 years) ... for the privilege of paying obscenely high electricity rates.
In theory, you get some of that money "back" if other people join "your" SSPP construction.
In practice, a small off-grid system can be built for less than the SSPP fees.
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Possibly the SSPP fees would be renegotiated (and thus "higher") for the new owner.
If anyone else has paid into the local SSPP pool, the buyer might get a "better" deal on their own after the sale.
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It is appropriate to be paid out of escrow if it is a contingency in the sales contract, otherwise the seller may get stuck with paying for something that they don't want if the buyer backs out. It would be simpler to just offer a lower price and leave sspp out of it.
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Daniel I agree, seems like it'd be simpler just to lower the price, that's why I questioned it, no reason to make things complicated.
Puna: Our roosters crow first
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I assume your initial question was misstated and you meant to say that the buyer wants seller to pay. If so, buyer wants it payed in the escrow so that it will show up as a line item in the HUD which will provide documentation of it's being paid and also wants it paid by the seller rather than as a price reduction so that it gets included in the loan.
Pua`a
S. FL
Big Islander to be.
Pua`a
S. FL
Big Islander to be.
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Oink, I think you're right. I also wondered since the SSPP is basically being "built into" the overall price that the the realtor's commission could end up being charged on the gross sale proceeds rather than the net proceeds (less the SSPP amount) The SSPP is about $3500 so the commission at 10% would be an "extra" 350.00.
Puna: Our roosters crow first
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Buyer may want to make sure the ssp is paid and in place - title insurance? on it as well
seems just being very careful there is a "ssp for reals"
clever
