This blog posit is all about the home buying process in Hawaii.
In 2020 I was pregnant with my first son. Being pregnant and childbirth is one of those topics that I had zero knowledge and experience on. I was so nervous about it, like really nervous. So I read up online and read books on the topic of pregnancy and birthing.
That’s when I realized this must be exactly how homebuyers feel!
After reading those pregnancy books I felt a lot more prepared and confident. I’m hoping this will be exactly how this blog will make you feel after reading. This blog has everything a first-time homebuyer needs to know about the home buying process in Hawaii.
The Home Buying Process in Hawaii
Getting Pre-approved With A Lender
This is the first a most important step that will determine if you can afford a property. If purchasing with cash skip to step 2. Most first-time homebuyers do obtain a mortgage. See a list of recommended lenders on this blog post.
Lenders or banks will need to look at your tax returns, pay stubs, 1099, or W-2 forms. Basically, they need to see proof that you are making income and paying your taxes. Once a lender says you are approved for a certain amount you can contact a Realtor to start shopping for homes.
Picking a Realtor
Now contact a Realtor if you don’t have one. Feel free to contact me or choose from a list of our other agents.
I highly advise sticking with one Realtor. All Realtors have access to the same properties online. It just creates confusion and stress when working with more than one Realtor at a time. If you feel like you don’t match well with your current Realtor, I recommending giving that agent a courtesy text or email stating or at least hinting that you are moving on. Trust me they will highly appreciate it and it won’t be awkward if you run into them at a home.
House hunting
Now it’s time to go on showings and property tours and always accompanied by your agent. Your Realtor/agent should be the one setting up all appointments with the listing agents.
At this point in the home buying process, a home buyer views homes until they find one they like enough to be serious about and make an offer on.
The house hunting phase and long as years to as short as a few days.
Making An Offer
Making an offer on a property is done in Hawaii through our State of Hawaii Purchase Contract. Your Realtor drafts this with the price and terms/conditions that the buyer chooses. Your Realtor will really guide and advise you through this paperwork.
Once your offer is submitted the seller can either accept your offer, reject your offer or counter your offer. Let’s assume that your offer is accepted Yay!!
Accepted Offer & Opening Escrow
This is when escrow is opened. An escrow company is a mutual party that handles the money and the title (who owns the property). Once there is an accepted on the property agents also say the term “the home is in escrow’. Meaning the seller/home is in contract with a buyer.
At this point sometimes I feel buyers getting nervous and thinking that being in escrow is going to take up a lot of their time. Really it doesn’t and your agent will make sure you are going through the necessary steps.
If we go back to my labor example. It’s like labor has just begun and everyone gets all nervous and excited. And at this point, we kind of just have to take the lead of our doctor or in this case our Realtor to guide us through the home buying process.
Inspection Period Contingencies
Usually, the inspection period is 7-15 days after the offer was accepted. At this time the buyer can either do their own inspection with family/friends or hire an inspection company. Depending on the house size licensed inspectors can charge from $500-$1,000.
During this time the home buyer can decide if the property is right for them and cancel penalty-free.
Appraisal
If obtaining a mortgage most mortgage companies will require an appraisal. The bank or lender requires one because they want to ensure that they are not lending you more than the property’s value. A licensed appraiser will inspect the home while the buyer, lender, and Realtor sit back and waits.
Final loan approval & Closing
At this point, we are waiting for the lender to say that the buyer’s mortgage got final loan approval and waiting for our closing date. Escrow will coordinate with the buyer and seller to sign closing papers. Which have to be done in person at escrow or with a mobile notary.
Then it’s closing or recording day, Yay! Which in Hawaii is the day that the title is recorded by the Bureau of Conveyances in the buyer’s name. On that same day, the seller also receives his funds from the sale. This whole process can take anywhere from years to months. A typical timeframe from opening escrow to closing is about 45-60 days.
Final Thoughts and Advice
Looking back at my pregnancy journey I really spent a lot of time focusing and researching the birthing process. Now being through everything I really wished I focused more on how to care for a baby. Because relatively the birthing process is a short time frame compared to taking care of a baby.
The same thing goes for homebuyers. A lot get caught up in worrying about the home buying process. However, it’s really such a short amount of time compared to the time you have preparing for the home purchase and owning your home.
My recommendation is to spend time figuring out how to get yourself in a better financial situation before purchasing a home. And worry less about what is happening once in escrow because your Realtor will be there guiding you through the process.
This blog is all about the home buying process in Hawaii.
