5 Tips for Purchasing a Home in Hawaii
Wednesday - January 10, 2007
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Allan Crooks congratulating his
clients at their new home in
Is buying a new home your goal for 2007? Interest rates are expected to rise by the end of the year, so now is the time to begin laying the groundwork for what will probably be the biggest financial transaction of your lifetime. But where do you start? Here are a few tips that will help pave the way to the home of your dreams.
1. Select an experienced, reputable real estate agent to represent you.
What are the qualifications you should look for in a real estate agent? Market knowledge, negotiation ability, and proficiency in navigating the purchase contract (the DROA), plus familiarity with zoning laws, construction, and the buyer’s financial profile and long term goals. The agent should be a trusted advisor and a strong advocate for the buyer’s interests from initial negotiations with the seller and through completion of escrow. A capable real estate agent can identify good opportunities for their buyers and help prevent them from making bad decisions. Often, a strong buyer’s agent will negotiate thousands, and sometimes hundreds of thousands of dollars in savings for the buyer. The buyer typically pays nothing for these services, as it is the seller who pays a commission that is split 50/50 between the seller’s agent and the buyer’s agent.
2. Select an experienced, reputable loan officer.
The loan officer plays a critical role in any real estate transaction. Many purchases have successfully closed only because of the diligence and perseverance of the loan officer.
Conversely, transactions have also fallen apart because of a loan officer’s inability to fund the loan. Beyond providing competitive good faith estimates for fees, interest rates, and monthly payments, the lender must be able to execute the financing in a timely manner. The buyer should be accurately informed as to how much financing they qualify for and what the closing costs and mortgage payments will be. Furthermore, the loan officer should be aware of and proficient in programs that might qualify a buyer for a larger purchase or a lower mortgage payment. For example, the Mortgage Credit Certificate program (MCC) allows substantial tax savings above the standard mortgage interest deductions for qualified, first-time home buyers, thereby helping the buyer qualify for a larger purchase.
3. List and prioritize your needs and wants in a home.
By specifying what you require and desire in a home, you can greatly increase the efficiency of the search for the right home. If you are unsure of what you may be able to afford, a qualified real estate agent will be able to provide guidance and acquaint you with the range of appropriate, available properties on the market. Once you establish parameters, your agent will tailor an Internet search program through the Multiple Listing Service and notify you of new listings that may be of interest.
4. Move quickly when you find the right house at the right price.
On Oahu, given the shortage of inventory, finding the right home at the right price can be a difficult task. A qualified real estate agent will be able to advise you as to whether a home is competitively priced. Although the real estate market has flattened considerably, in general, inventory is still low and demand remains high. When a well-priced property comes on the market, sellers are still receiving multiple offers. However, if a buyer, with the help of their agent, moves fast enough, sometimes the purchase can be negotiated before other buyers become aware that the property is available.
5. Use professionals to assist you in your inspections of the home.
With the average single family home selling in Oahu for over $600,000, spending around $500 for a professional home inspection just makes sense. If the home inspector notes a problem, other experts such as electricians, plumbers, contractors, engineers, etc, can be brought in to quantify the scope and cost of a repair.
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