Owning a home can seem like a daunting task, especially in a market like Hawaii. Many first-time homeowners make seemingly small mistakes that can lead to big issues down the road. Locations is Hawaii's leader in first-time homeownership education, and we've compiled a list from our experts to save you time, money, and headaches as you go through the process.
You don't have to go it alone. We will guide you through the process and share critical information that every first-time homeowner should know.
No Worries. We Can Help.
1. Talk to a Real Estate Agent
A good real estate agent is one who will find you a list of properties. A great real estate agent is one who will thoroughly understand your needs, educate you on the home ownership process, and will find you something that fits your needs. Locations agents treat you as a priority, make sure you set your goals realistically, and will dutifully guide you along the path to home ownership.
No matter your financial situation, great agents will be patient and tenaciously look for properties that fit your needs. When you observe a great agent's actions, you will see they are working toward the goals you outlined from the beginning. And the most important part – a great agent will share as much knowledge as possible with you about the Hawaii Real Estate Market.
2. Get Pre-Qualified Sooner Rather than Later
Everyone's situation is different, and you need a home loan that fits your unique circumstances. When you apply for a loan, your lender takes into account your work history, credit card balances, calculates your debt to income ratio, then finds the appropriate lending program and incentives to help you get qualified. There are numerous options available based on your financial situation, including Fixed Rate Conventional Loans or VA and other Government Loans. Many people are in the financial position to own a home and don't even know it. Getting pre-qualified gives you a comfortable price range and confidence to become a new home owner.
You can forget about having to put 20 percent down on a new loan. It's possible now to put 3 percent, 5 percent or even zero percent down, depending on your qualification. Once you're pre-qualified you will see that owning your own home is not as difficult as you may have thought. It will also give you incentive to start looking and take advantage of our historically low interest rates. Compass Home Loans is a trusted, local company that will work with your Locations Agent and assist you in getting the loan process started.
Contact Compass to get Started
3. Define your Needs and Goals
Setting goals and planning will save you time, money, and effort. Is being close to work critically important? Or is the neighborhood more important? Are you looking for good schools? Or is being closer to shopping more important? Defining your goals makes the search less stressful and the path to homeownership clearer. It will also help your Locations agent find homes that fit your needs. This is especially important in a market like Hawaii where inventory is very limited and properties are snatched up lightning fast after being listed.
4. Don't Wait for the "Perfect" Home
There is no perfect home. Look for a home that meets your 2 or 3 most important needs and goals. Homeownership is not a “life sentence”. Your first home will not be your last one. Don’t get caught up wasting time trying to find the "perfect one". Waiting, in a market like ours, is very expensive. Prices may rise, or interest rates may go up, or both. Set your goals, and shop within your price range for the home that meets your top 2 or 3 goals/needs. Get the best property for your price range and make it a home.
5. Leasehold vs. Fee Simple
The Hawaii real estate market is unique in that there are leasehold home ownership opportunities available.
Fee Simple is home ownership as most people understand it. You're given a title to the property which grants you complete ownership to the land and any improvements in perpetuity. You can possess and use the land as you wish, and give it away or transfer ownership.
Leasehold gives the owner temporary rights to use the land. The buyer does not own the land and can only use the home for a predetermined amount of time. The length of the least. The buyer of a leasehold property has rights until the end of the lease agreement. At the end of the pre-determined period, ownership reverts to the original land owner. There also may be restrictions or other provisions preventing improvements or changes to the property. Since Hawaii has Leasehold properties, first-time homeowners need to understand the differences. Your Locations Agent will guide you through the Leasehold/Fee Simple maze.
6. Get your Home Inspected
As part of the Purchase Agreement that protects new home owners, you have the opportunity to retain a professional home inspector to take a look at the structural components of your potential new house or condo.
The surface value may be outstanding, new kitchens, beautiful floors, or incredible views. However, if your foundation is weak, or the plumbing needs work, the additional unforeseen costs can add up very quickly. Without the home inspection, you're new home might turn into an unintended nightmare.
Ask Yourself, How Much Do You Know About Roofs? Not as Much as a Certified Inspector.