Hawaii Home Buyer Advisory
By Celeste â€œSallyâ€ Cheeseman, Century 21 Liberty Homes
So, you are thinking of Buying a Hawaii Home and you donâ€™t know where to start. Your finances are in order and the amount you spend on your rental can actually go towards a nice piece of Hawaii Real Estate. The Hawaii Home Buyer Â will be able to yield the benefits at the end of the tax year and you will be paying for YOUR home rather than paying someone elseâ€™s mortgage. You wonâ€™t have to worry about your landlord raising the rent and you wonâ€™t have to worry about moving when the owner sells the property.
Weigh out your options and determine if Buying a Hawaii Home is beneficialÂ for you and your family.
A Brief Description of the Hawaii Real Estate Transaction Process
Your Honolulu County Hawaii Real Estate Agent: A Hawaii Real Estate Agent is certainly a vital part of your Hawaii Home Buying process and we provide a wide range of services in searching and locating property, negotiating a sale for you as well as advising you, the Hawaii Home Buyer, in finding qualified inspectors and providing you with common documents that you need to review.Â If you are new to the islands your RealtorÂ® will make sure that you will have a few loan officers, home inspectors and other professionals to choose from and these professionals will likely be ones your RealtorÂ® has worked with in the past. Make sure you are comfortable with your agent and ask questions regarding their qualifications.
Your Honolulu County Hawaii Loan Officer: You will need to get prequalified and itâ€™s preferable to have a local loan officer who is knowledgeable of Hawaii Real Estate laws and our Hawaii Real Estate Purchase Contract. Your RealtorÂ® needs to know the price range you are qualified for in order to search for properties well within your price range and criteria. Your loan officer will go over options and programs for financing and remember that you do need to let the loan office know what you are comfortable with for monthly mortgage payments. The loan officer will get all information and documentation to check your credit, debts, income and asets in order to get you preapproved for a loan so make sure you get everything the loan officer asks you for asap. Ask for qualifications and make sure you are comfortable with your Loan Officer.
Your Criteria andÂ MLS (Multiple Listing Service): Your RealtorÂ® will go over your criteria for a home which will include type (home, townhouse, condo), #bedrooms/baths, sq/ft. interior/land, parking, inclusions, exclusions, price range, maintenance/association fees and so forth.Â This will help the agent properly select properties for you to view via your personal web page through our Client Gateway system. Youâ€™ll be able to save to your favorites, reject and also make notes for your agent to go over with you.Â The MLS may be incomplete or may have wrong information so your RealtorÂ® will help you verify important information contained in the MLS. Make sure you are comfortable with your criteria.
Setting up showing appointments: Â Â Your RealtorÂ® will need at least 48 hours to set up showing appointments.Â This is to contact the sellerâ€™s agent and set up showing appointment times, get showing instructions and allowing time for responses. This agent spends hours and starts with owner/tenant occupied listings and moves on to vacant homes in order to get timely responses. On the day of showing youâ€™ll receive a MLS printout of all properties you are going to be viewing from your agent.
Finding the Hawaii Home You Love: On the day of your showing appointments you view a few homes and you walk into that one particular home and immediately feel that â€œthis is the home for you.Â Your RealtorÂ® will let you know what the last sold prices on comparable homes in the area so you will have a better idea of the price you want to make an offer on. Your RealtorÂ® can also search and make sure that there is room for negotiation. Just remember that everything is negotiable although if you really love the home donâ€™t be a killer negotiator as you could lose the home you really love.
*Note: If you are a Relocating to Hawaii remember that we only have so much buildable (valuable) land and the sq/ft interior and land will be SMALLER than other areas in the Continental United States.
Terms of the Purchase Contract:Â Our Hawaii Association of RealtorsÂ® Purchase Contract is very detailed and consists of 12 pages of contingencies and your RealtorÂ® will go over all aspects of the terms and agreements that will go in that contract. There may be additional addendums to add to the contract such as VA/FHA Loan Addendum, As Is Addendum, Plain Language Addendum, Short Sale and Distressed Sale Addendums and so forth. After reviewing and signing the contract your RealtorÂ® will submit the Purchase Contract to the Sellerâ€™s Agent who in turn goes over it with the seller. If all is a go the seller signs and it becomes a binding contract.
Counter Offers: Should there be a disagreement on price, terms and conditions of the Purchase Contract the seller will Counter Offer your offer. Each term agreed on in the counter offer will supersede that contingency in the Purchase Contract and the date the Counter Offer is signed is the acceptance date.
Opening Escrow:Â Escrow is the third neutral party that takes care of all documents and monies to be collected and distributed.Â All signed documents, your earnest money deposit, and escrow instructions will be submitted to escrow immediately to start the transaction process. Each contingency in your contract comes with a time line and all involved parties will work together in a timely manner to get to that special day when you will own your Hawaii Home. The escrow company will order the Preliminary Title report and send out buyerâ€™s initial opening letter and documents as well as the timeline for the transaction. They will make sure that all parties sign off on the Termite Inspection Report, SurveyÂ and other documents for the property to make sure that all parties agreed on everything.
Opening the Loan Process: Your RealtorÂ® will send the Purchase Contract to the loan officer to start the Loan Process. In turn the Loan Officer will put together your file and order the appraisal for the property and request any other documentation from you for the process.Â If there is subdivision or condominium association documents the loan officer will request certain items (i.e. for a VA Loan they need the RR105C Property Information Form, the Current Budget, the last three minutes and Insurance Summary first before they send out the VA Appraiser). The loan officer will also give you a Good Faith Estimate that shows the estimated closing costs as well as your monthly mortgage payment.
Sellerâ€™s Real Property Disclosure Statement: The seller will provide a detailed summary within the first week since acceptance of the Purchase Contract. It is a report (four pages of itemized questions) of what they know about the property including but not limited to roof, termites, structural damage, electrical, plumbing, cosmetic remodeling, additional rooms (need building permits for these alterations) . Remember, this SRPDS does not take the place of a professional home inspection but it may give you more information about the property from the sellerâ€™s eyes.
Professional Home Inspection:Â This agent recommends all Hawaii Home Buyers to hire a Professional Home Inspector to do your home inspection. The professional home inspection is usually done within the first 14 days from acceptance of the contract. The home inspection will reveal any defects, safety, hazardous, structural, electrical and plumbing issues as well as any repairs or remedies that may need to be fixed before the transaction can continue.Â The seller will have to agree to the repairs/remedies and if they do not then the buyer at least has a written detailed report on what needs to be repaired/remedies should they wish to continue on with the transaction.Â Â If there is an agreement with both parties, the buyer and seller will sign off on the C-51 (Home Inspection) Agreement and continue on with the transaction.
Termite (Pest) Inspection â€“ The buyer selects a termite/pest inspection company and the seller pays for it. The property should be free and clear of termites/pests by time the transaction records. If termites/pests are found the home is treated by tenting or spot treatment (for surface areas)Â A warranty is provided by the company which is passed to the buyer.
Survey/Staking the Property (for single family dwellings): Unless the Hawaii Home is in a preplanned development with fences/walls already in, it is advisable to have a survey done. Back in the old days they didnâ€™t have laser survey tools and they went by eyesight and measuring tapes and you need to know if the boundary lines are within limits (up to 0.6 inches is acceptable). If there are encroachments (walls on your side or vice versa) there will need to be an agreement with the neighbors drawn up and signed or there is a possibility of accepting it â€œAs Isâ€ (especially if there is no reason to tear it down at this time) by signing an indemnification form with escrow.
Conditional Loan Approval Letter:Â Itâ€™s getting close to closing and the loan processor is making sure most of the documents for your loan are in. There may be a few things that may be left to do like the termite inspection, survey and a few loose odds and ends. The appraisal is in and it came in at offering price (if it didnâ€™t you and the seller may have to go back to negotiating). At this time a Conditional Loan Approval is in with those few â€˜conditionsâ€™ to fulfill is sent to the buyerâ€™s agent and has to be submitted to the seller to show that the loan is pretty much approved. Within a specified time (usually one to two weeks) the conditions have to be met.
Loan Approval, Signing and Escrow: When loan conditions are all met there is loan approval and loan documents are being prepared for signing. Escrow coordinates with the lender for figures and prepares an â€œEstimated Settlement Statementâ€ and we set a tentative signing date for all loan and escrow docs.Â After signing the loan company receives all signed loan docs and prepares for wiring funds to escrow two days prior to recording with the Hawaii Bureau of Conveyances.
Recordation and Owning Your New Hawaii Home!Â After escrow receives funds they submit the conveyance docs to the Bureau of Conveyances and then the property will have recording clearance two days later. (The bureau recently changed from one to two days for recording) When a clearance call from the Bureau to Escrow has been received it is then that they contact the buyer and sellerâ€™s agent to give notice of clearanceâ€¦â€¦and it is then that you now own your own home!
Last Note: This is just a â€˜briefâ€™ description of the Hawaii Real Estate Transaction Process and hopefully it gives the Hawaii Home Buyer some step by step insight into the process.
Your Home is Where YOU Make it!