How to Buy a Kauai Home or Condominium

Low interest rates along with low prices are encouraging many people to buy a home on Kauai in the current housing market.

The significant drop in home prices on Kauai in the last few years means that many very desirable living areas – areas where many people have always wished to own a Kauai home or condominium yet couldn’t afford – may now be within their price range.

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From oceanfront estates to upcountry ranches there are some amazing Kauai real estate deals available. Real estate purchases have also become increasingly attractive as an investment option because the stock market has been lackluster at best, and the interest rates that banks are offering on savings accounts is almost negligible.

Meanwhile home loan mortgage rates are at historical lows, providing a great opportunity to negotiate good home mortgage loan terms. This makes it possible to arrange a reasonable monthly payment for your dream home on Kauai.

The low interest rates on home mortgage loans also makes this a good time to lock in a 30-year fixed rate mortgage that will protect you against future rises in interest rates.

The reasons for home ownership are many including long term home appreciation, the chance to not have to pay rent anymore, tax benefits, and the pride and satisfaction that comes from home ownership. Another benefit of ownership is the ability to change your home’s features to your liking.

Kauai Home Buying Process – Determining Your Budget

The first rule in home buying is to determine a realistic home buying budget. Once you have done this you can be Pre-Qualified for a loan.

Once you are Pre-Qualified for a loan and know how much down payment money you have available as well as cash for other costs, then you can formulate in more detail your home buying budget.

Consider All of the Costs of Buying a Kauai Home

Costs incurred may include: the loan application fee (including credit report and appraisal); loan origination fee; loan points; title insurance; mortgage recording fee; homeowner’s insurance; private mortgage insurance (PMI); an inspection fee; escrow fees; and a loan impound account to cover insurance and property tax payments.

Other fees may arise as well, and these are best discovered in consultation with your lender and Realtor to ensure that there are no surprises.

Always Use a Professional, Respected Realty Company

One of the most important things you can do when buying a home on Kauai is to find a knowledgeable Realtor who can help you avoid wasting time and money as you navigate the home buying process.

A competent Realtor is priceless in helping you find the home of your dreams, and perhaps even more importantly, avoiding the major problems that can result from a lack of professionalism in what may be one of the most important business transactions of your life.

Always choose a Realtor from a well-established and trusted real estate firm that has been in business a long time and has a proven track record. This is the very best way to ensure that you are being treated properly and ethically, and that your best interests are always the number one priority. There are many ways that you will benefit from a knowledgable and competent real estate agent as you navigate the home buying (or home selling) process.

Buying a home should be fun and exciting without hassles and unpleasant surprises. This is where a professional, experienced Realtor makes all of the difference in helping you buy a home on Kauai.

Bali Hai Realtors have many years of knowledge and experience on Kauai and are happy to consult with you about finding your dream home.

Consider What Type of Home You Prefer

After determining your home-buying budget and price range, you can discuss in detail with your agent exactly what type of home you are looking for.

For example, what types of architectural styles do you prefer, do you like to be in the mountains or near the sea, how many bedrooms would you prefer, how big of a home would you like, and are there any design features you prefer?

Also decide what things must you have, as opposed to things you would prefer but are not mandatory. This will help when it comes to reconciling your desires with your home buying budget.

Visit Kauai Properties that Fit Your Requirements

A Bali Hai Realtor can perform a detailed search of all available properties to narrow them down to properties that meet your criteria. Pre-screening of potential homes to suit your needs will save you time and ensure that you have the very best chance of finding your perfect Kauai dream home.

When you go on home visits to review the properties you will not be wasting your time as there is a high likelihood that the property is something that you will find desirable.

You Found A Kauai Home You Like – Now Make An Offer

Once you have found a home that you like and are prepared to make a purchase, your Bali Hai Realtor will help you determine what a reasonable offer would be on the property based upon the property’s features as well a consideration of the current real estate market including recent sales and comparable sales in escrow at the time.

A Bali Hai Realtor will also help the buyer structure the transaction in the way that is most beneficial to the buyer’s interests including financing arrangements, a time schedule, and any contingencies that may be needed to protect the buyer.

The Offer to Buy a Kauai Home and the Earnest Money

When you submit an offer you will also provide an Earnest Money Deposit toward the home purchase. This demonstrates your commitment to complete the transaction.

If the seller agrees to accept the offer then the earnest money is held in an escrow account until the closing. Usually the earnest money will not be refunded to the potential home buyer unless a contingency in the offer was unfulfilled. 

Kauai Home Inspections

A thorough inspection of the property is a key element in determining the condition of the property that you are buying. This is generally done after you reach an agreement with the home seller.

If any major issues (e.g., structural problems) are uncovered, they should be addressed early on in the process. Your agent can provide you with suggestions on your options available in dealing with such issues.

Kauai Home Financing

Once the offer is accepted you need to finalize your lending arrangements, and hopefully you have already been pre-qualified for a loan. An inspection of the property will also need to occur, and any problems addressed. Your Bali Hai Realtor will ensure that you understand your best options in dealing with any issues that may arise.

An escrow account will also be opened in order to facilitate the various documents that will be required to complete the real estate transaction. The property may also be surveyed or staked to mark the boundaries and ensure there are no encroachments over the boundary line.

A Title Report needs to be completed and any encumbrances on the title need to be addressed. You will also have to deal with various issues such as homeowner’s insurance and other items that will be required by the lender.

Just before closing the buyer will have an opportunity to perform a final inspection of the property to ensure that all of the property described in the contract (e.g., major appliances) is still there, and also that no damage has occurred to the property and any repairs that were required have been completed.

The Loan Closing

 Finally the loan closing occurs. On this pre-scheduled date all necessary funds are disbursed, all of the required documents are signed and accounted for, the conveyance documents are sent to be recorded with the State of Hawaii Bureau of Conveyance, and you are given the keys to the property and become the owner.

Finding Your Kauai Dream Home

For more information about buying a home on Kauai please feel free to give us a call. The Bali Hai Realty staff will be happy to help you find the perfect Kauai home and answer your questions about the Kauai home buying process.

Also see our Kauai Real Estate Galleries or use our unique Map-Based Kauai Home Search.

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