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Escrow and understanding the contingencies in the Contract Mike and I often find that our clients either start by going to open houses and learning about the market or they start with finding a realtor who will help them plan their steps; both are wonderful places to start. The first step when we meet is to get to know you and to determine what type of home will fit your needs. We will ask questions to help with the search in order to eliminate properties that are either too big/small, over priced/under-priced, in a neighborhood that is acceptable, and has the amenities that are must haves. It is so exciting to explore the answers to these questions because it will lead us to the special property that will fit your needs and budget. Here are a few of the questions we will ask and explore: How many bedrooms, bathrooms, parking spaces do you need? Do you prefer condos, townhouses, a single family home, or multi family home? Is there a preferred area of the island that you would like to be in? What attracts you to that neighborhood? Have you spoken with a loan officer or mortgage broker? Do you have comfort zone for your mortgage? The second step is to have you pre-qualified with a lender if you haven't done so already. We work with a couple of different mortgage brokers and loan officers and depending on your situation or needs we can if you would like us to make recommendations. There are so many out there and it is sometimes difficult to determine if the loan officer or mortgage broker is looking out for your best interest or his best interest. Mike and I, prefer professionals who always put their clients first and by doing so we do not encourage our clients to over extend themselves financially. Once we receive the price range of what you are comfortable with we begin the search. We may email you properties to review prior to setting up a showing or we may pick properties that we feel fit your needs and we will go on a 2 to 3 hour excursion looking at each. We ask our clients at this point how they prefer to work and thus work accordingly. The third step will be writing up an offer using the HAR "Hawaii Association of Realtor" Purchase Contract and submitting it to the Seller's Realtor or to the Seller directly if he is a FSBO "For sale by owner". If you would like to get familiar with the Purchase Contract click on the word which is a hyper link to an adobe file and you can view and/or print it. At the time that we submit the purchase contract to the Seller there is an earnest money deposit required, which is a fancy way of saying a personal check, in the amount usually ranging from $1000.00 to $5000.00. The check is held until the offer is accepted at which time the check will be dropped off at the escrow office and deposited. This needs to be done on the first business day after acceptance. The fourth step is opening escrow. As previously mentioned, the earnest money deposit is delivered to the escrow company on the first business day after acceptance along with a copy of the executed contract. The good news is we do this as your realtor. Once escrow is open we will put together a estimated time line of "To Do's" based on the contract and get a copy to you. We will then arrange for the C-51 Initial Inspection and if you want a professional home inspector we will also schedule this for you. We highly recommend hiring a professional home inspector if your budget permits. The costs is usually between $350.00 to $550.00 depending on the size of the home and number of appliances. The reason we recommend doing this is because the home inspector will let you know if there are items you should be concerned about, items that need to be repaired as soon as possible, and he will also give you piece of mind. Sometimes, the inspector's report may indicate items that seem like they are deal breakers but often times the seller will have had no problems regarding the issue. Why this is, our only guess it that the inspector has to be Chicken Little and look at the worse case scenario. Often times, if the buyer is really concerned about an issue we recommend having a professional specializing in the issue come in and double check the situation. For example, the home inspector might feel that the electric box should have another circuit but when the electrician comes in he might be able to explain why it is the way it is and that it really is okay. Once the inspection is completed and the conditions are accepted we move forward. If the Purchase Contract indicated an additional deposit upon acceptance of C-51 we will now obtain another check from you and deliver it to the Escrow company. At the same time that we are doing our due diligence regarding the inspection you as the buyer need to be filling in the loan application and supplying your loan officer/mortgage broker with the requested documents. C-25 Buyer's Obligations is the paragraph that pertains to this item on the Purchase Contract. We highly recommend giving us your loan officer/mortgage brokers name and contact information. We understand that our clients will sometimes want to keep the financial side of things discreet and that is okay. Their loan officer/mortgage broker won't disclose any personal information to us and having their information will help us coordinate documents and signing of closing docs with them directly. Within the designated time frame we will also be receiving a Seller's Disclosure Statement-C-44 Seller's Obligation to Disclose and in turn we will have so many days to review the document and if there are any questions we can forward them to the Seller's Realtor for clarification or have a professional inspect the item if needed. Should you decide not to accept the Seller's Disclosure Statement then you will be able to terminate the contract according to C- 29 as long as it is done within the time indicated in C-46 Buyer's Rights Upon Receipt of Disclosure Statement. Along with the Seller's Disclosure Statement if you are purchasing a Single Family Home in an area with CCR's - C-66 Contingency on Subdivision Documentation Approval or Home Owner's Association or a Condo - C-64 Contingency on Homeowner Organization Documentation Approval you will have an opportunity to review the documents and decide if what you read is acceptable to you. We will be required to inform the Seller with a specific time frame if you find these documents unacceptable and you wish to terminate the contract. Usually within 5 to 10 days of acceptance we will need to choose a professional to perform the C-59 Termite Inspection for the TIR "Termite Inspection Report". The Seller usually pays for the inspection and treatment if required. You will be required to inform escrow of the type of tenancy you would like to take usually within 15 days. Most people aren't sure and we highly recommend discussing this with your attorney and/or read the attachment that Title Guaranty of Hawaii has kindly provided to us. Title & Tenancy Guidelines. Back to C-25 Buyer's Obligation regarding the financing contingencies, we will be required to present by the specified date in this paragraph the conditional loan doc provided by the bank or mortgage broker then within the specified time period you will have had to complete the conditions and have your bank or mortgage broker submit a final loan approval doc. These are the majority of the items that will require action or a response and depending on what you are purchasing, single family home/vacant lot/multi family home which will require either a C-41 Staking or a C-42 Survey, which includes a staking. A condo does not require either. The Seller's Agent is responsible to order these items and to inform us of the completion. The good news is that we are your realtors here in Hawaii and we will keep track and stay on top of what needs to occur when. We will keep in touch via email or phone and you will not have to worry about a thing. We are full time realtors which allows us to monitor and respond to situations as they occur. We do not have another job that prevents us from doing so. You are our number one priority. Fifth Step is meeting at the escrow company to sign all your documents to close the transaction. As the buyer we will warn you... this can take a while especially if your mortgage broker or loan officer will be there with their docs. You will need to sign their documents in triplicate. and then Escrow Docs. At this time the escrow officer will give you instructions on how to get the additional funds if any to escrow and by a specific deadline so the transaction can record on time. Sixth Step is you will receive a phone call from Mike or myself congratulating you on the purchase of your new home. We will make arrangements to get the keys to you and welcome you home. Information Request Form: Select the items
that apply, and then let us know how to contact you.
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Contact Information
Send mail to
Gayle@GreatHawaiianHomes.com with
questions or comments about this web site.
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