BUYING

Tips For Home Buyers

What Can You Afford?

Financing

Most real estate agents and mortgage lenders recommend pre-qualifying for a loan before selecting a home to purchase in Hawaii. This process will help you:

Determine the price range you can afford
Understand the types of loans you qualify for
Determine what your monthly payment will be

The Loan Process

Most Hawaii real estate agents and mortgage lenders recommend pre-qualifying for a loan before selecting a home to purchase. This process will help you:

Application:  All pertinent documentation is obtained. Fees and down payments are discussed, and the borrower will receive a Good Faith Estimate (GFE) and a Truth-in-lending statement (TIL), itemizing the rates and associated costs for the loan.

You will be asked to provide certain documents to your lender in order that your loan can be processed in a timely manner.

Loan Submission:  Once all the necessary documentation is in, your completed file is submitted to a lender for approval.

Loan Approval (Underwriting):  Loan approval, or underwriting, generally takes 24 to 72 hours. All parties are notified of the approval and any loan conditions that must be received before the loan can close.

Closing:  Once all parties have signed the loan documents, they are returned to the lender. If all the forms have been properly executed, the lender sends the loan funds by wire transfer. At this point, the borrower finishes the loan process and actually buys the house.

Finding And Choosing The Right Home

Before deciding which house to buy, think about your lifestyle, your current and anticipated housing needs, and your budget. There are many factors to consider in selecting a property, including location, bedroom and bath count, schools and amenities. It’s a good idea to create a prioritized list of features you want in your next home--you'll soon discover finding the right house involves balancing between your "must-haves" and your "nice-to-haves." Based on criteria that you establish, your real estate agent will help you find the perfect home.

Your agent will apply their extensive community knowledge and professional resources to research available properties, and show you the homes that best meet your needs. If you find a property that interests you through the Internet or your own research, let your real estate agent know so that a showing can be arranged.

As you view different properties, your criteria may change. Open and direct communication with your real estate agent is a key element of a successful property search.

Making An Offer

Once you have found the home that you wish to purchase, your real estate agent will apply their professional training and do all the necessary research to help you structure an effective offer.

This is where your real estate agent’s negotiation skills come into play. When an offer is made, the seller will have the option of accepting, rejecting or counter-offering. Your real estate agent will negotiate the best possible terms for you.

Your real estate agent will draft the purchase agreement, advising you of protective contingencies, customary practices, and local regulations. Home warranty, title and escrow arrangements will be detailed in the offer. Although your real estate agent will give you advice and information, it is your decision as to the exact price and terms that you wish to offer.

Offer Accepted

Managing the Escrow

When the purchase agreement is accepted and signed by all parties, your real estate agent will open escrow for you and your earnest money will be deposited. The escrow is a neutral third party that will receive, hold, and distribute all funds associated with your transaction.

Removing Contingencies

Prior to closing escrow, all of the contingencies of the Purchase Agreement must be met. Your real estate agent will coordinate this process. Typical contingencies include:

Approval of the Seller's Property Disclosure Statement
Approval of the preliminary title report
Loan approval, including an appraisal of the property
Physical inspections of the property
Pest inspection and certification
Acquisition of homeowner's insurance

Closing Escrow and Moving In

When all of the conditions of the purchase agreement have been met, you will sign your loan documents and closing papers. You will deposit the balance of your down payment and closing costs to escrow and your lender will deposit the balance of the purchase price. The deed will then be recorded at the County Recorder's office and you will take ownership of your home.

Your real estate agent is a valuable source of helpful tips for planning and coordinating your move.