Tip #1: Prove to the seller that you are financially qualified
Each offer you present must include a loan pre-qualification or a loan pre-approval letter from a lender of your choice. The letter proves to the selling home owner that you have already spoken with a lender and it also shows that you have taken the necessary steps to preparing to make your home purchase.
Tip #2: Have a competitive offer price
In Hawaii’s real estate market, home prices are on the rise in many market areas. In the remaining market areas, home prices have been stable. This means that even if you aren’t willing to offer full list price to the home owner, there will ultimately be someone else who is. I have even found that sometimes, buyer competition was so high in some markets that offering full list price was not enough to get an accepted offer! This doesn’t mean that you always offer full asking price for every offer you submit but that you strategize with your real estate agent to come up with the highest and best offer.
Tip #3: Minimize your request for seller concessions
In some Oahu markets, home buyers who ask for seller credit is the norm but in others, asking for these concessions is viewed as outrageous. Before you submit an offer, find out what market conditions are like and if the seller will consider seller credit from your real estate agent. If a credit is necessary, work with a reputable agent who can help you strategize other ways in the purchase contract to get your offer accepted.
Tip #4: Increase your earnest money deposit and/or down payment amount
Generally speaking, the more money you are willing to invest in your home, the more solid of a buyer you appear to be. For this strategy, you could offer to place an additional earnest money deposit into escrow after the completion of the home inspection contingency or it may mean that you provide a larger down payment due to escrow at closing.
Tip #5: Work with a knowledgeable agent
Your agent should be able to tell you what real estate market conditions are like for your neighborhood. The agent should be able to develop a good rapport with the seller’s agent and he/she should be asking enough questions about the property’s offer process so he/she has an idea of what the seller is looking for in the offers.
The general idea with these tips is to position you as a serious contending buyer and that you can successfully close on the loan within the market timeframe of 45 days. There are different strategies based on local market conditions, buyer competition, and individual seller needs.
Coreen K. Nishijo (RA) CDPE, e-Pro has been serving as a local Realtor® with Exit The Master’s Plan Realty in Aiea since 2007.
|From GENERAL REAL ESTATE|
“Real estate is at the core of almost every business, and it’s certainly at the core of most people’s wealth. In order to build your wealth and improve your business smarts, you need to know about real estate.”
Donald Trump, Think Like a Billionaire
Real estate has proven itself to be the road to wealth and despite the economy’s down turns, there are still many more homeowners who continue to profit from a solid investment.
Homes on Oahu purchased 20 – 30 years ago have nearly doubled their value. If that’s too far off for you, homes purchased 6 – 8 years ago were priced considerably lower than they are today. As bad as “gurus” make the market out to be, Hawaii’s home market hasn’t seen the price drops and foreclosure problems that mainland markets talk about on the news. In fact, Hawaii’s residential market is still one of the best places nationwide to realize equity gains over time.
Is investing inHawaii’s real estate market for you? Here are some things to consider.
1) Equity Builds as the Market Improves
As Oahu home prices improve, the difference between the current value of the home and the price paid for it means equity for you.
2) Equity Builds as You Pay Down the Mortgage
For every month the mortgage is paid, a portion of the principal is paid off. While that portion may be minimal during the first few years of your loan, it increases over time. Likewise, for every month rent is paid on time, you build your land lords equity.
3) Location – Some Markets are Better than Others
Even though home prices are at their lowest, buyers should also research current market prices for other comparable homes as well as what the past market high prices were for the area. This information gives the buyer a nice range to compare their home against to see if their prospective home is truly a good deal.
Hawaiioffers a solid investment market for both first-time home buyers and investors. For more information on how you can get started or if you have any questions, send me an email at coreen dot nishijo at gmail dot com.