What Does the Buying Process on Maui Look Like?

If you haven’t purchased a property on Maui before, this will be your quick guide on what the process looks like! Having sold over 90 properties in my career thus far, I have experienced quite a broad spectrum of escrows and varying situations. However, in a nutshell, the basic buying process is as follows:

1. Pinpoint Your Criteria

Identify what kind of Maui property you are after. Are you looking for a full-time residence, transient residential property, vacation rentable condo, or vacant land? This, obviously, is an important step to identify exactly what you’re looking for and can thus save time and energy when the other options that don’t match your needs are eliminated. Having a focused search is key when looking for a property, as it filters out unnecessary distractions.

Another key piece in this first step is identifying which areas of Maui you would like to hone in on. For clients looking for a vacation rentable property, there are only two areas on Maui you will be searching in — South Maui and West Maui, as these are the only two areas with vacation rentable approved properties. However, if you are looking at residential homes and condos, this opens up your search to all other areas on Maui. And if you’re interested in vacant land, there are areas with more options than others.

2. Start Your Search

Once you have identified the type of property you’re interested in, the search can then be honed in even further. I like to set my clients up on an MLS search portal, which filters out exactly the types of properties they are searching for as soon as they hit the market. If you are physically on island, we can set up showings to tour these properties in person. However, if you are on the mainland, I am available to get into properties for full video tours/video calls with you. For a lot of mainland clients searching for vacation rentable properties, this is the route that tends to be the easiest, as most of them are not physically here when the “right” property hits the market. So I’m happy to the be the “boots on the ground” in that situation.

3. Make an Offer

Once the right property is found and then you want to make an offer, then I immediately get to work. If you are doing financing, we’d first make sure that you had already spoken to a lender and obtained preapproval (preferably from a solid local mortgage broker, as this not only assures a smoother transaction, but can also strengthen your offer in a lot of other seasoned listing agents’ eyes). I will then typically call the listing agent for the property to gauge the offer situation. If there are already multiple offers on the property, I will give you differing advice on your offer as opposed to if they don’t have any offers on the table. From there, I will advise you accordingly and write up your offer according to your instruction (as at the end of the day, I represent my clients’ best interests and will always respect what you want to do).

4. Do Your Due Diligence

If we are able to come to terms with the seller and get a signed contract, then escrow is opened! This is when your due diligence period begins. In Hawaii, our real estate contract is very buyer protective, and you definitely are allotted quite a fair reviewal process when buying. Typically, our industry standard is a 14-day home inspection period, in which you can conduct any type of inspection that you’d like. I recommend at least getting a professional general home inspection in order to “dig deeper” than just the initial showing and find items that need repair or any defects with the property. Now, it is important here to note that our contract is written as an “as is” contract, and nowhere in it does it say “buyer is able to request repairs and/or a credit, and seller is obligated to oblige the buyer request.” That being said, it has become customary here, as in other markets, for buyers to try to negotiate either repairs and/or credits from the seller during this home inspection contingency. However, the seller is free to respond in 3 ways: agree to the requests, negotiate a compromise, or say no to all requests. If a seller says no to all the requests, then the buyer can either accept this and continue with the deal, or cancel the transaction and get their earnest money deposit back.

Also, during this initial due diligence period, the seller will also typically provide a seller’s disclosure (noting any defects or material facts of the property to the best of their knowledge), an inventory list (if furnishings are included), and condo or subdivision association documents (if there are any).

The escrow/title company will also send out opening documents and a preliminary title report during this initial period, and if you are financing, you will also need to make sure the lender has everything they need to get the loan process underway.

5. Financing

After these initial contingencies are completed, the escrow can continue. At this point, a survey (if it is a residential home), and a termite inspection report will be conducted (if written into the contract). If you are financing the purchase, the loan will typically be the last major contingency. This is based on a successful appraisal process, conditional loan approval to be issued, and then final loan approval if all the outstanding conditions are met. The time period on a financed purchased can differ greatly on the type of property you buy. If it is a standard residential home or condo, the competitive time frame is anywhere from 30-45 days from acceptance to closing. However, for vacation rentable condos here on Maui, the quickest an escrow period can be is around 60 days. This is because they have to be financed through local banks due to being considered “condotels,” and cannot be loaned on by the majority of mainland lenders.

If you are buying the property with cash, the escrow period (regardless of if it’s vacation rentable or not) can be as quick as 14-21 days. Thus, this obviously provides a huge leverage point for cash vs. financed deals.

6. Sign the Paperwork

Once the loan is approved (if financing), and all the other escrow contingencies are met, then escrow can close the file and transfer title. Typically, during the final week or so, the buyer can do a final walk through (which I often video/video call my clients if they are on the mainland), to make sure the property is in the same condition and is ready for closing. Escrow will also need final paperwork to be signed and remaining funds to be sent in (down payment, or full purchase price if cash). Once the funds are in and title is conveyed, that’s it — you now own a property on Maui!

Looking to Buy on Maui?

Of course, there are many variables and idiosyncrasies that can come into play during the buying process, but I hope this at least gives you a general idea of what the process looks like from start to finish. And of course, my job is to help you along the way so it as smooth and efficient as it can be. If you’d like to get the process started, reach out to me today!

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Daralyn Schoeppner

October 11, 2023

Hello! I’m not sure if you can answer my question..but I am a Maui native looking to return home from Missouri. I am hoping to be a first time home buyer and my boyfriend is able to work from any location as he will continue with his current job while we move to Maui. I was originally told that we would have to put down a 10% down payment due to our Maui home being a “second home”, since we do not currently have residency. We currently rent in Missouri and will not obtain financial income from selling a home. Do you have any information that may pertain to this?

Thank you!

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