It can take anywhere from a few weeks to several months, depending on inventory, budget, lending and several other factors, to buy a property. It is best to start the whole process a few months ahead of time by doing some research:
1. Starting your research:
If you are looking to buy a home, you want to start research early. Understanding how the lending process works can help set financial goals. Searching through real estate listings can help you determining which properties are most likely to fit your needs.
2. Find out what you can afford:
When you have determined which properties are going to be suitable, you need to find out if you can afford them. There are many interactive mortgage calculators online, many mortgage brokers we work with offer free online tools. Using one of these calculators will give you a good idea of what your purchase price, down payment, and monthly mortgage payments could look like.
3. Getting pre-approved for a mortgage:
All online tools and calculators are great for giving a general impression as to what you can afford. However, the final word comes down to what a mortgage broker is willing to underwrite. This means that a mortgage broker will look at your total financial situation and pre-set a limit as to how much they are willing to be lent. Being pre-approved for a mortgage will allow you to immediately determining which properties you can afford. During this process, you will need to submit copies of your financial documents.
4. Find a knowledgeable real estate agent:
This is where Hawaii Elite Real Estate can directly help you the most. The National Association of Realtors recently reported that 88 percent of all buyers in 2017 purchased their home through an agent. A agent will explain and walk you through the home buying process while providing their expertise on the local market. They are great at connecting you with listings you can afford and that best suit your needs. Perhaps the most valuable asset of working with an agent is that they have vast experience at price negotiation.
5. Make an offer on your dream home:
Working with your agent, you will view, either virtually or in person, several properties that fit your needs and your budget. Once you find a property that satisfies both of these conditions, your agent will work with the seller to determine the best fair and market price. Once that price is determined, your agent will submit an offer to purchase that property at that price on your behalf.
6. Getting the property inspected:
Once an offer has been accepted, the property then enters escrow. This is when you need to have a property inspection done. An inspector will visit the property to identify anything that needs to be fixed. Both you and the seller will receive a copy of the inspection report, after which you can renegotiate with the seller if anything was found to be in a state of disrepair. If major problems are found, most offers contain a contingency for the purchase to be abandoned at this point.
7. Get a mortgage:
Based on your financial situation and goals, you will then proceed to speak with a mortgage broker or loan officer to get a mortgage. Some buyers will skip this step if they are paying cash. Depending on what your financial goals are, you could look for a mortgage that has a low monthly payment, or one that has monthly payments and a single, larger payment in the future. Mortgages are creative today, and your mortgage broker will help find the right one for you.
8. Getting a home appraisal:
Once you have the mortgage in place, you have to make sure that the property is actually worth what the value of the mortgage is. An appraisal ensures that you are not overpaying and that the lender is not over lending.
9. Having a title search performed:
One of the final steps in the home buying process is to have a title search performed. This is done by a Title Company. They will research the ownership chain of the property to make sure that when you purchase the property and the lender (if there is one) holds the title, that no legal ownership claims can be filed against the property.
10. Close the deal:
Once all these steps have been completed and the lender (or you) writes the check to the seller, the transaction is complete! You and your agent will meet with the seller or seller’s representative and pick up the keys to your new home!
Call us at Hawaii Elite Real Estate today, to begin the home purchasing process, or for assistance at any step along the way.