Purchasing Your New Home

on the Big Island of Hawaii

Purchasing a home intimidates many people. However, with a little up-front planning, it’s not very complicated. So you’ll know exactly what to expect, I like to supply my buyers with an outline of the entire deal. Below are my nine steps to buying a home.

Step 1 – Prepare to move to the Islands, prepare to buy a home.

Moving to the Islands is a BIG step. There is not enough room to cover that here, but watch for my upcoming website “Moving to the Big Island For Dummies.”

I’ll be happy to chat with you about the pitfalls and perils of moving to the Islands, but no worries, the good FAR outweighs those obstacles! Just want you to know what to expect. No sugarcoating here. I want you to WANT to come here and STAY here. It takes extraordinary planning.

 There are several things you should do prior to starting your home search. You’ll want to make a list of features you want (view, no view, rain, no rain, commute, no commute), get an idea of what school districts and neighborhoods you’d like to live in if you still have children, and start planning!  A good rule to adhere to is that your mortgage payment should be close to a third of your monthly income.

Step 2 – Talk to a real estate agent

This is where I can help. I’d be happy to schedule a time to meet with you (probably over the phone would be the first introduction) and communicate with you about why you want to buy a home and get an idea of your plans for the future. We’ll discuss neighborhoods, schools on the Island, the mortgage industry, and any additional economic factors, geographical, factors, budget factors that may affect your purchase today or in the future.

I can also help you begin the loan process. There are some excellent mortgage professionals on the big Island. It is  ALWAYS a good idea to use and Island Lender. I can’t tell you how many deals go south last minute because a buyer wants to use their mainland lenders.

Unless your lender has offices in the State, not going to be a great idea. I can explain more about that when we talk.

I work with a lot of very good lenders, so you’ll be in great hands. They can help you determine which type of loan is best for you, as well as help you get qualified.

Step 3 – Begin house hunting

After our initial meeting, now, knowing more about your criteria,  I’ll begin finding available homes on the market that are good for you. I’ll research most of the houses and eliminate the bad ones, and then we’ll book appointments to view the houses at a time that’s convenient for you depending on your travels to the Islands. I have sold numerous homes to Mainland client’s sight unseen. It is not uncommon. Not saying that IS the way to do it, but often a buyer will come and look and not be ready to buy,  or the right house is not available. Once they go home, I watch for that right home for them and often they buy contingent (or not) upon seeing the home.

Step 4 – Get a feel for the market

An agent’s awareness of the properties available on the Island is  fundamental factor in your home search.

When we tour houses, we will be discussing when the asking price may have room for bargaining and also when I think the house is “priced to sell.” When working with an agent, trust your instincts and be sure to ask a lot of questions, as every REALTOR® will claim to truly understand the market. If things don’t add up, make sure you call me, especially when it comes to rental value of properties, as I owned one of the premier vacation rental companies on the Kona Coast for almost 10 years. I understand the rental market as well.

Step 5 – Find the home you’ve been looking for

I’m positive we’ll find the home of your dreams when you are ready to do the deal. The home may not be on the market today, but I will be watching the market for you daily, and you will also be getting MLS updates daily. The offer will be tailored exactly to your needs, including a lot of contingencies, such as acquiring financing, home inspections, and a clean title.

Upon submitting your purchase offer, you’ll be including an “earnest money deposit.” This is a cash deposit submitted to the seller to secure the offer to buy the property, and it’s often applied to the cost of closing. If the seller accepts your offer, we should close on the home about 45 to 60 days thereafter. This allows plenty of time for your mortgage financing. This money is safe unless you default for some reason in the process, and that’s what I am here for, to make sure there are no glitches or defaults on our side.

Step 6 – Negotiate the deal

Many offers are not initially accepted because buyers “make offers” and unless there are unusual circumstances, there is usually some negotiating going to happen back and forth via counter offers.  It’s common to receive a counter offer. This is part of the art of deal making. . We’ll discuss whether or not to accept the counter offer, submit our own counter offer, or reject the seller’s offer and so on.

Market conditions will play a big part in how aggressively we negotiate the contract. In addition, we’ll work within your financing limits. And when it’s all said and done, we’ll compose a deal that’s best for you.

Step 7 – Secure a loan

Before you make an offer, you will have met (via in person or phone) with a preferred lender to get a “pre-qualification letter”. This “letter” tells the sellers agent and the seller that you are qualified to purchase this home. It saves a lot of time and makes their decision easier.

After the contract is approved, you will then work more closely with your lender to start the loan process. Upon signing the contract, you’ll begin working with your lender to close the loan. If you’re pre-qualified, this won’t take much time at all, but you’ll want to stay in close contact with your lender.

Step 8 – Close the deal

Your lender will supply you with a  HUD Good Faith Estimate of your closing costs within three days of receiving your application. The estimate outlins closing costs from your mortgage lender within three days of getting your application. The estimate rests on the loan amount. RESPA requirements require that it has to involve all closing costs and fall within a tight range of accuracy, and I’ll review the estimate and let you know if it all looks all right. It gives you a good idea of what to expect, although not an exact science depending on various things.

Then we’ll close on your home. This will probably take place at a title company or escrow office and will probably be a smooth and stress-free occasion. You normally sing one day, funds another day and in Hawaii, it takes two days for recoding, which not is “deemed” CLOSE OF ESCROW. And Congratulations, your Hawaiian Paradise is now all your! Get ready for the company!

Step 9 – Select a property management company

If you desire to rent out your home to increase the return on your investment, contact Boundless Hawaii, the leader in oceanfront vacation rental. Boundless Hawaii is a boutique business by choice as personalized service, and high standards in all areas of operations, is core to their business philosophy and approach. The company has been managing and renting high end properties exclusively for the past nine years and Boundless Hawaii offers some of the finest oceanfront and hillside vacation rental properties along the Kona and Kohala Coast on the Big Island of Hawaii. For more information visit their website.

Step 10 – Call the movers!

Congratulations! It’s time to move into your new house.  There are a lot of link on my site to help you with your move.. Check out “Maps and Resources” page. If you need anything or have any questions, simply contact me at 808-987-4699 or drop me an email!

Warm aloha. Hope to help YOU buy your piece of Paradise!