If you’re getting ready to buy a residence in Hawaii, don’t assume you need a costly brokerage firm to file your Hawaii purchase contract for you. It may be cheaper to hire a local real estate attorney.
Here’s the deal: typically, the seller pays for the buyer’s broker or agent commission, which is 3% of the sales price. That 3% will automatically be figured into the sales price. However, for high-dollar properties, this fee can amount to so much money that it’s less expensive to ask the seller to dispense with the broker, give you a 3% discount on the price, and let you hire an attorney instead.
DeVries & Associates can take it from there. If you have questions about a Hawaii purchase contract, contact us today at (808) 465-2500.
How a Hawaii Purchase Contract Works
Buyers and sellers typically use the Hawaii Association of Realtor’s Standard Form Purchase Contract during the sales process. Here’s how the process goes:
- You, as the buyer, fill out the Hawaii purchase contract. It will contain a number of provisions you’ll need to pay close attention to, including but not limited to your purchase price, the timeline before closing, and any special terms you and the seller have agreed upon.
- You send the purchase contract to the seller.
- They respond. If they agree with your terms and conditions, your seller will usually initial every page before signing the contract. However, they may also submit a counter-proposal in which the terms and conditions may differ from your original offer. Don’t worry, this is not unusual! If it occurs, the contract will go back to you for review. Your options are then to (a) sign the revised contract, agreeing to the new terms and conditions; (b) counter their counter-proposal; or (c) reject the deal and walk away.
- If you counter their counter-proposal, the contract goes back to the seller for their review. If they re-counter, you can choose from the above options again. Ideally, at some point, both of you will agree and you will both sign the purchase contract.
- If you and the seller do both sign the contract, you’ll need to open an escrow account with a Hawaii-based escrow company. And finally:
- You’ll need to get a title insurance policy from a local title company.
You’ve Signed the Contract; Now What?
Now the sale can proceed toward closing. But don’t assume you’re home free; there’s still plenty to do, and the deal can even fall through if certain conditions aren’t met.
Luckily, if handled properly, the standard Hawaii purchase contract lets you back out without penalty or default under these circumstances:
- You can’t get a conditional loan commitment letter from a lender;
- You can’t satisfy the conditions of the loan commitment letter by a specific date;
- You’re dissatisfied with the property’s preliminary title report;
- The seller’s disclosure statement is not satisfactory;
- The property inspection is not satisfactory; or,
- An inspection reveals a termite infestation.
Please note that you have to exercise all the above options before a specific deadline. We encourage you to put all your requirements and inspections on a calendar, scheduling them carefully so you know you can meet them well before that deadline. Add some “wiggle room” so you can reschedule the inspections and title search if necessary.
What’s next? Just one thing: closing.
If You Don’t Use an Agent or Brokerage
As a buyer, you don’t have to hire a real estate agent to help you through the buying process. If you don’t, however, you will need a local attorney to review the process, particularly the terms and conditions of your purchase contract. Legal language can be confusing, and you don’t want to make any errors, especially where the withdrawal provisions are involved.
We know how nerve-wracking a property purchase can be. So rather than suffer through that yourself or pay huge brokerage fees, contact us. Not only will we review your real estate contract and explain any sections you don’t understand, we’ll take a look at your preliminary title report, seller’s disclosure statement, and property inspections too.
Let DeVries & Associates Handle Your Hawaii Purchase Contract
At DeVries & Associates, we’ll guide you through the process, making sure you understand both your risks and your rights — and get your Hawaii purchase contract filed in record time. Call us today at (808) 465-2500.