Buying in Hawaii


Some may think that you can’t buy property in Hawaii.  Contrary to popular belief, anyone can own property in Hawaii, even people from foreign countries.  However, foreign owners may not be able to live in the property without a green card.  Many people, US citizens and foreigners alike, own investment property or vacation homes in Hawaii.

There are two types of ownership, Fee Simple (Freehold) and Leasehold.  For more on this subject, please click on the link: Housing in Hawaii.

Foreign buyers will need to buy in cash or qualify for a mortgage with a US lender who will require a minimum 25%-30% cash down payment.

Buying a single family home or condominium is generally a fairly straightforward process, but for the inexperienced buyer, for example a first time home buyer, it can be filled with pitfalls and may be viewed as a daunting process.  After all, you are probably taking on your first large debt.  That coupled with the realization that you will be tied to this home for years to come, as the usual loan is 15 to 30 years long, frightens most people.

But there is a bright side as buying a home is one of the best ways to build personal wealth. Much of the great wealth in this country was built on land ownership.  Plus, it’s yours to do with as you please.  You can decorate and/or renovate the place, paint the walls your favorite color, and even have a pet.

And, the rent never increases!  Therefore, the longer you hold on to the property, the better off you are.  Within a few years, you should also have built in equity, as property values do tend to rise steadily.

The Key is to do it right.

First, find a knowledgeable and experienced Realtor who will look out for your best interests!  Remember, the listing agent represents the Seller, first and foremost.  It’s their job to get the highest possible price for the property.

A Buyers agent works for you.  Your agent will find the best properties which fit your needs and advise you of property values by comparing each property to similar property sales in the neighborhood.  As all Realtors place their listings in the MLS (Multiple Listing Service), your Realtor will be able to search all possible properties which match your budget and your preferences, regardless of which company has the listing rights.

Next, find the right loan!  Your Realtor can also help you find a dependable lender and get you pre-qualified.  This is an important first step.  You want a lender who will help keep your loan within a manageable budget.  Overstepping your budget can get you into trouble in the long run.  Most banks require that your max, long-term debt, be no more than 40% of your income.  That will include all your loans, credit cards, as well as all your housing expenses, including property tax, home insurance, and maintenance or HOA fees, if any.

Once you are pre-qualified, your Realtor will help you find a home to match your budget. You can waste a lot of time driving around and looking at open houses which don’t match your budget.  Your Realtor will be able to answer most of your questions about the properties and neighborhoods and if need be, can locate other information which may affect your decision to buy.

Next, make an offer!  Once you find the right property, your Realtor will help you set an offer price based on a variety of information such as: recent sales, other listings, condition of property and market changes.  A knowledgeable and experienced Realtor also knows how to write a Purchase Contract, which will appeal to the seller while protecting your rights.

Lastly, you will go through the escrow process!  Once you have an accepted contract, you will be faced with a lot of dates to meet and documents to review.  Your Realtor should give you a list of those dates and help you stay on track with reminders by phone, text, or email.  Keeping up with the timelines is important.  Both sides must meet the agreed-to dates and perform their respective duties under the contract if you are to bring the sale to a timely closing.  Your Realtor will be an important partner in keeping those dates, but it is the client’s duty to perform whatever tasks are required under the contract.

Finally, you’ve reached the closing, which is the end of the home buying process! Generally, you will sign all transfer documents a few days prior to the closing.  You will also be required to make any remaining deposits by way of a cashiers check and your loan company will deposit your loan funds with escrow at that time.  In two days, you will receive word that the Deed has recorded and you will receive the keys to your new home on that day.  It’s a great feeling!

Please consider letting Aloha Properties help you find the right home.

Aloha, Peter & Yasuko

To make an appointment, Please Click Here

Other useful links

Moving to Hawaii

Hawaii Schools

Bringing your Car

Bringing your Pet

Hooking up Utilities

Honolulu Real Estate

Housing in Hawaii

Selling property in Hawaii

Foreign Ownership in Hawaii

1031 Tax Deferred Exchange

Property Tax in Hawaii

Rent or Own


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