When buying a Hawaii home, there are many steps to get from start to finish. This guide will take you through the process step-by-step. Feel free to link to or share the handy guide above.
1. Save up a down payment.
A good rule of thumb for your down payment is to make sure it is at least 20% of the total value of the home you want to buy. You can usually get away with putting down less if you have excellent credit and/or qualify for additional types of financial assistance (see step 6). Of course, the more money you can put down up front, the better.
2. Find and meet a real estate agent.
There are several ways to find a great Hawaii Real Estate agent: contact people you know who have recently bought or sold a home; look in the newspaper; use online resources such as online reviews and referrals from friends; check out statistics on the real estate website Trulia.com; or go to an open house and ask for an agent's card.
Once you find a few agents, set up appointments with them. Interview them by asking how long they've been in business, if they specialize in your type of housing (condos, luxury homes, etc.), what their experience is and what their strategy will be for helping you buy your home.
3. Look at homes with your agent to get a feel for the market.
Once you've chosen a great Honolulu Real Estate agent -- and once that agent has chosen a title company, bank and insurance broker (see step 6) -- set up appointments to look at homes in your target neighborhood or city. You can usually get listings of homes for sale by visiting the local MLS site; you also may want to ask your agent for suggestions on neighborhoods they think might be right for you (they do this all day long, after all). Once you've narrowed down a neighborhood, you'll probably begin to see which areas are more desirable than others. In fact, you might even start to spot your dream house.
4. Put in an offer on a home.
Keep in mind in Hawaii that the owner of the home has the right to accept or reject your offer, and then counteroffer if necessary. You might have competition from other buyers when buying a home, so make sure your agent knows what you're looking for, your price range and the amount of time you're willing to wait.
5. Put money in escrow.
Usually, when you offer to buy a home in Hawaii, you will also need to put down earnest money (a deposit) in an escrow account held by your agent or his/her company. You can expect to put down an amount equal to 1%-3% of the total house price (in some states, like California, it might be more like 5% or 6%). This money is returned to you when the sale is finalized. If for any reason your deal falls through, however, you can expect to lose this money.
6. Inspections are completed.
After you put in an offer, your agent will probably set up inspections for the home -- either with a professional inspection company or an inspector from the local building department. These people will look at everything from the roof and electrical wiring to the foundation and basement to make sure it is structurally sound and free of potentially expensive problems. This might cost $300 to $500 or so.
7. Close and take ownership of your home.
Once the sale has been finalized, you will likely need to undergo an inspection one more time just before closing (when the final terms of your purchase are carried out). This is one last chance for you, as well as for the seller, to make sure there are no surprises that could scuttle the deal. You will have to transfer money from the bank account you set up for closing costs, plus sign a stack of legal documents. Finally, you'll receive keys to your new home.
Once you've taken care of all these steps, you can truly consider yourself a Hawaii homeowner. You'll have an important new set of responsibilities, but you'll also have the freedom to do whatever you want in your very own home -- including decorating or upgrading it however you wish.
If you think you are ready to buy a home or are even considering it, please give me a call today for a free consultation.
Photo by Greg Rivers on Unsplash
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