Well let’s see. Buyer, seller. That’s 2. Each one has an agent. That’s 4. Escrow, title, appraiser, lender, loan broker, inspector, termite inspector. That’s 11 so far, and there could be more. Need a geological cert? How about a contractor? A repair man? The list goes on.
You and the Seller Must Agree
For some of the services, you have to agree. The escrow and title for one thing. If you get into a dispute about repairs, you might have to agree on a contractor or inspector. You both have to agree to agree on the other stuff. For the most part, the buyer gets to choose the service providers like appraiser, lender, etc.
Escrow and Settlement
The escrow company is named in the purchase contract right up front. The escrow handles the paperwork and makes sure that everyone’s money is in escrow and all contingencies are met before releasing the funds and the title to the property. Basically an escrow’s job is to act as a neutral third party to make sure that nobody gets away with cheating anyone. While there is no assurance that they will succeed, that is the role they intend to play.
Choosing an escrow in Hawaii can be difficut because there are so many vendors. You can get a qoute from an escrow before you make the offer, but sometimes the time is not there to do so. Your Realtor can often tell you which escrows will do a good job and make a smooth transaction for you. Sometimes this isn’t the cheapest option, as in many things in life. You have to pay for good service, but you can also negotiate service fees with escrow too. I recommend you shop around a bit before committing.
The title insurance covers the buyer or seller in the event of a title dispute. You should read the title policy to see exactly what they cover and what they don’t. Usually if someone makes a claim on your house’s title after you purchase, the title company should take care of it. This could happen if the relative of the seller, or someone holding an unrecorded lein or unrecorded title shows up and claims that part or all of your house belongs to them.
It sounds scary, but it could happen and it does on occasion. Lenders won’t even let you buy a property without title insurance, so it’s not optional. The lender wants to make sure that your new oceanfront Hawaii home doesn’t get claimed by some guy who shows up with an unrecorded lein, because the lender can’t make claim on the loan to someone who is not on the mortgage.
You can and should shop title insurance companies, since there are several in Hawaii. First American, Island Title, Title Guarantee, and Old Republic, just to name a few!
Termite and Inspection
Before your escrow is completed, your home should be inspected for termites. Even for a new home that was just built, it doesn’t hurt, because termites can move in fast and do damage quickly. The termite inspector is going to look for active or past evidence of termite activity, mainly just by looking. He won’t usually rip open walls or go where he cannot easily get. He may go in the attic, the basement, or under the house, but there could still be damage that he can’t see.
The termite report can be paid for either by the seller or buyer in Hawaii real estate, so you should mark off the appropriate box on the DROA. Either buyer or seller can pay for it too.
One thing to understand is that in Hawaii termites are very common. You might be looking to buy a nice new luxury home that was just built in Kahala, but find that it already has termites. Not to worry. In Hawaii the termite problem is so common that usually a little treatment by the termite company is all that is needed to proceed.
A licensed Home Inspector will examine the whole house to see what things are needing repair or replacement. Inspectors go under the house if they can, on top of it, inside it, under the sinks, and everywhere they can. They look for water damage, broken appliances, plumbing issues, and a vast scope of things. The home inspection of probably the best way to see what kind of property you are getting.