Congratulations on beginning your journey to homeownership in Honolulu on the beautiful island of Oahu! Here’s a brief look at the typical home buying process to prepare you for what to expect as you comb the island for your perfect new home.
Organize your finances. Before you begin looking for a home, decide on what your budget will be. Figure out what monthly payment you can afford. Consider potential closing costs, like attorney fees and inspection costs, and factor them into your calculations.
Be sure to shop around to get the best deal possible since you’ll be dealing with your lender for the next few years. Ask questions and make sure that you receive thorough answers that you can understand. If you’re looking to purchase your home further down the line, check your credit and
Once you’ve decided what you can spend on your new home, get your mortgage in place. If you haven’t already, check your credit report and apply for a pre-approval. Secure the best terms that you can find, and if you’ll need to submit a down payment at closing, draw up a plan to set this amount aside. You may want to hold off on making any major purchases that may impact your credit until after you close on your home.
Having your pre-approval in hand makes the rest of the home buying process go smoothly. It can also give you an advantage if your seller has to decide between multiple buyers. Knowing that your financing is in place and ready to go makes your offer more attractive than a bid submitted without funding assurance.
Choose a realtor. Ask friends or family for referrals and check reviews of local agents who know Honolulu and the complexities of real estate in Hawaii inside and out. Find someone that you trust and who makes you feel comfortable. Working with an expert can make finding your new home a truly enjoyable experience.
Start your search. Make a list of all of the features that you’re looking for in your new home. Decide what you can and can’t live without and write it down. If you love to cook, prioritize kitchen features. If you need a yard for your pets, make sure that it’s on your list. Consider the area of the island that you would like to live on, what schools are nearby, and how well the homes in the area have appreciated.
Being specific about your search parameters will help you narrow your search and save you time. Your realtor will be able to guide you through this process to help you buy a home that suits you.
Make an offer. When you’ve found the home that you want to buy in Honolulu, you’ll need to have your realtor put together an offer to let the seller know how much you’re willing to pay for your new home. Take a look at what comparable homes in the same neighborhood sell for. When you make your offer, be sure to take into account what the complete financial picture of your purchase looks like. If you need to make renovations, offer an amount that leaves you with room in your budget to upgrade it. If you’re looking at a condo or townhome, consider that you’ll also have monthly maintenance fees to pay.
Often, sellers will price their homes higher in anticipation of negotiations with the buyer.
When you submit an offer to purchase a home, the seller can choose to accept, reject, or counter your offer, and you can do the same. If you arrive at a price and terms that you and the seller both approve of, you’ll place earnest money into escrow to seal the deal and get ready to close on your new home.
Secure your mortgage. Now that you know which house you’re going to buy, it’s time to finalize your home mortgage. There are plenty of lenders who offer a variety of loan terms, and if you’ve done your homework for pre-approval, this part should go smoothly.
Mortgages typically span 15 or 30-year periods, and you’ll pay back the principal (the amount borrowed) in addition to any interest. Whether you opt for a fixed-rate, adjustable-rate, or interest-only mortgage, make sure that you’re getting the best possible deal as you finance your new home for the sale price that you and the seller have agreed upon.
Get your home inspected. Hire a professional to go through your new home. Even though everything may look great, a home inspection can potentially save you tons of money in surprise repairs. With this information, you can request that the seller fixes any issues that show up on the inspection report before you close if necessary.
Close on your new home. Set a date to close on your new home. If you’re currently renting, you may want to choose a date close to the end of your lease. If the seller is buying another home, they may need to wait until they can close on their new home to move out.
Discuss what you’ll need to bring to the closing table with your mortgage banker. You’ll often be responsible for costs like the down payment, attorney fees, appraisal fees, and the money to purchase point on your interest rate if you intend to buy down on your interest rate.
Move-in! With all of the paperwork out of the way, you are ready to move into your new home and enjoy life in Honolulu.
It’s easy to buy a home in Honolulu if you have a clear game plan and a team of realtors behind you committed to showing you the best of Oahu. If you’re ready to begin your search for the perfect new home for you and your family, reach out to our real estate team, Weaver Hawaii. With an intimate understanding of real estate here on the island, we can help you find your dream home.