Thinking about buying a home or land? The concept may be familiar or overwhelming to you. Either way, here is the best place to start…
STEP ONE – Contact Me
Let’s set up a time to meet, either in my office or by phone, to go over the buying process. I help my clients to define their goals, research their options, and assist with creating a plan to reach the goal of becoming a property owner. Working with me, a professional Realtor®, will save you time and simplify the process. This service is FREE!
STEP TWO – Get Pre-Approved for a loan
Meet with a profession lender, bank or mortgage broker. They will help you determine what you can afford and what type of loan options are available to you. There are special programs designed to help first time property buyers keep costs low. The lender will give you specific do’s and don’ts that are important to follow during this process. I can refer you to local lenders who have helped other clients. This service is FREE!
In addition to the loan amount, you will have an earnest money deposit as well as closing costs which will vary based on the sale price of the property you choose.
STEP THREE – Find the perfect home or land
Part 1: Let’s meet again to look at what properties are available within your criteria. You can also search on my website: jmcgeehan.clarkhawaii.com. Together, we will search for listings that you desire, fit your lifestyle, and are within your price range. You will pick five or six properties and we will set a convenient time for you to see them. We can go over a blank Purchase Contract and you can take one home to read through and get familiar with. The Purchase Contract is a legal document that sets the buyer’s and seller’s responsibilities and obligations that must be fulfilled in order to complete the sale.
Part 2: We will then narrow it down to your top three favorites, look at the properties again (if you choose), then select one to make an offer on.
STEP FOUR – Make an offer
Let’s prepare to make an offer. You will receive a list of comparable properties, called a Comparative Market Analysis (CMA). This information will help you understand what amount similar properties have recently sold for. After you have reviewed this information, we will write an offer called the Purchase Contract, for the value you have for this house and what you can afford. The seller will either accept your offer, reject the offer or make a counter offer which would then continue the negotiation process. This service is FREE!
STEP FIVE – Enter escrow
After your offer has been accepted, we open escrow with a local escrow company. The definition of escrow is: To hold in a fiduciary way. The escrow company works with the buyer’s and seller’s real estate agents to facilitate the transaction and communicates with everyone involved. There will be some costs to you in order to complete the purchase. Typically, the escrow process takes between 30 to 45 to 60 days, sometimes longer, to complete and for ownership to be transferred to you.
The Escrow Process:
~Submit your initial deposit, also called Earnest Money. The buyer lets the seller know what this amount is in the Purchase Contract.
At this point you will need to go back to your lender to finalize your mortgage details. This means finalizing your down payment, interest rate, monthly payment amount, and any other financial requirements. After the down payment there are additional expenses. Some of these additional expenses can be wrapped into certain types of loans.
As part of the additional expenses, your lender will collect impounds, which are typically a few months’ worth of future payments of real property taxes and insurance.
~Then Home Inspection and Termite Inspection needs to be done. The buyer typically chooses the companies to do these inspections. Usually the buyer pays for the home inspection and the seller pays for the termite inspection. I can provide to you a list of qualified inspection companies.
~When you are buying a home or property you will also want to have either a land staking or survey to determine if there are any encroachments, meaning anything that is built either outside the property line that belongs to you or if someone else has built on your property. Examples include rock walls, fences, pools, driveways, etc. The seller usually pays for the staking or survey.
~An Appraisal of the home is done by a professional company selected by the lender to make sure that the property meets the value of the agreed upon price. This has a separate fee and is a cost to the buyer.
~A Tax Assessment is done by the County of Hawaii on a periodic basis and this is what your property taxes are based on. Any taxes that have been paid for by the current owner will be pro-rated. For those buyers who purchase a home as their primary residence, a homeowner’s exemption may lower your property taxes!
~You will also receive a Sellers Real Property Disclosure Statement (SRPDS). This is a detailed report that tells you the history of the home including its utilities, upgrades, repairs, any damages, etc.