Honolulu Home Buyers FAQs

A. One of the most important things you can do before buying is to take a good look at your finances. Figure out how much room you really have in your budget to spend on a home—and don’t forget to include things like additional utility costs or regular home maintenance.

A. Absolutely! In fact, we recommend you don’t even think about starting your home search until you get prequalified for a loan. The advantage of getting prequalified is that you have a professional take a look at your current credit and financial situation to let you know how much their bank is willing to lend you. This is pretty useful when trying to figure out your budget for a house!

Getting prequalified is also very beneficial when it comes to the home search—and making an offer. When you present a prequalification letter with your offer, it shows the seller that you’re both serious and qualified, which makes your offer much more appealing than a buyer who’s not prequalified.

A. It’s a common misconception that to buy a home, you have to have excellent credit and high income, and put down a 20% down payment. In fact, there are dozens of different types of loans all geared towards different types of buyers.

In addition to conventional loans, there are a number of federal, state, and local government loans geared towards helping first-time or low income buyers become homeowners. VA, FHA, and USDA loans are national loans, but Hawaii and Honolulu have others, too—and only a local lender is going to know if you qualify for those!

A. Buying a home is pretty straightforward, right? Get a loan, find a home, make an offer, pay your down payment, get the keys. Not so fast—there’s a lot more that goes into buying a home than that! For example, do you know which Honolulu neighborhoods best hold their value? Do you know which inspection contingencies you’ll need to include for a waterfront property or a home with a pool? Do you know the difference between fee simple and leasehold ownership?

Clearing up these questions is only a small fraction of what an agent can do for you! And what’s more, as a buyer, you don’t pay the agent’s commission! So the better question is, why wouldn’t you use an agent?

A. Real estate differs from state to state, from the loan options available to property taxes to ownership types. In Hawaii, we have two common types of ownership:

• Fee simple: This is how the majority of property is bought and sold (here and across the US). In short, in a fee simple ownership, you own both the property and the land underneath. This works with condos, too—in a sense, you own a proportionate amount of the land (as well as the common areas).
• Leasehold: In a leasehold ownership, you own the building, but not the land it’s on. In this case, the land is owned by someone else (the fee owner) and you only rent the land out. These properties may be more affordable (since you’re not buying the land), but can be risky; the fee owner sets the terms of the land ownership, which could get pricey or restrictive.

A. In short, escrow is the period of time between when the offer is accepted and the close. During this time, there’s a lot that’s going on for both the buyer and seller—and all their associated representatives. Once the buyer and seller agree on terms, an “escrow account” is opened with a third-party company. This company will hold your earnest money (submitted with your offer) while doing some behind-the-scenes checking and research—like ordering a title search and preparing the deed.

During this time, you as the homebuyer will likely order any inspections and appraisals that you requested in your offer. This allows you to request repairs or cancel your sale, should you find any problems with the home.