The homeownership process can seem daunting, especially in a market like Hawaii. However, you don't have to go it alone! Locations is Hawaii's leader in first-time homeownership education. Our knowledgeable experts will guide you through the homeownership process and share critical information that every first-time homeowner should know.
Here are our top six tips for first-time homeowners:
1. Talk to a Realtor®
A good Realtor® will find you a list of properties. A great Realtor® will thoroughly understand your needs, educate you on the homeownership process and find you something that fits your needs. Locations agents treat you as a priority, make sure you set your goals realistically and dutifully guide you along the path to homeownership.
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 and debt-to-income ratio, and 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 price range and the confidence to become a new homeowner.
You can forget about having to put 20 percent down on a new loan. It's possible now to put 5 percent, 3 percent or even zero percent down, depending on your qualifications. 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 an incentive to start looking and take advantage of low interest rates. Compass Home Loans is a trusted, local company that will work with you and your Locations agent to get the loan process started.
3. Define your Needs and Goals
Setting goals will save you time, money and effort. Is being close to work critically important? Or is the neighborhood more important? Are you looking for certain 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 to find homes that fit your needs. This is especially important in a market like Hawaii, where inventory is very limited.
4. Don't Wait for the "Perfect" Home
There is no perfect home. Look for a home that meets two or three of your 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 trying to find "the 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 two or three goals or needs. Get the best property for your price range and make it your home.
5. Leasehold vs. Fee Simple
The Hawaii real estate market is unique in that there are leasehold and fee-simple properties.
Fee Simple is homeownership as most people understand it. You're given a title to the property that 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 the length of the lease The buyer of a leasehold property has rights until the end of the lease agreement. At the end of that 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 can advise you on which type of ownership is right for you.
6. Get your Home Inspected
As part of the Purchase Agreement that protects new homeowners, 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, additional unforeseen costs can add up very quickly. Don't skip this important step!