Transaction Timeline for Sellers
Below we've laid out a detailed explanation of the timeline of a real property transaction in Hawaii. In practice there is a good bit of variation of dates and time periods. The following are approximate dates based on a 35-day timeline.
If you've got any questions, get in touch any time.
Listing Agreement and Photography
You decide to sell your home. That's great! The first thing to do is to sign a listing agreement with your real estate agent.
Shortly after that, you'll need to prepare the house for photography and possibly videography. Make any repairs you need to, spruce up the place, and have the place in show-ready condition.
By law, you are required to disclose everything you know about the property that could potentially impact its value. You'll have a long questionnaire to fill out, which may not be very fun. This is where many sellers just don't say quite enough. While you don't have to investigate anything about your property, you should write as much as possible, and even gather relevant documentation, about what you do know about the property.
The disclosure is commonly referred to as the Seller's Real Property Disclosure Statement or SRPDS.
Day -5 to Day 0
We've hit the market, done an open house or two, and scheduled several private showings. Now we finally have our first offer!
At this point, we may have some back-and-forth with the buyer before we actually reach a signed and mutually agreeable deal.
Days 5 - 7
Most buyers will hire a home inspector, a generalist who evaluates the safety and function of the home's components. Depending on findings the home inspector make recommend that additional specialized inspectors further evaluate particular issues.
Home inspections typically range in cost from about $350 to about $800, and the buyer owes payment at or before the time of service.
Specialized inspections (ex: pipe scoping, roofing inspection, gas line inspection, soil analysis, foundation inspection, mold testing, etc.) can vary substantially but are usually in the neighborhood of $500-$1000 each.
End of Inspection Period
Days 10 - 15
In Hawaii, the inspection period provides buyers with a get-out-of-jail-free card. If buyers want to cancel for any reason during this time, they can do so and get a full refund of earnest money deposits.
Once this period is over, it gets harder and harder for buyers to terminate the purchase contract and receive full refunds of deposits.
Initial Documents and Earnest Money Deposit
Days 1 - 3
We'll submit your lender's pre-approval letter and a verification of funds to the seller right away.
You'll also need to make an earnest money deposit to escrow. This typically ranges from $1,000 to $40,000, scaling with the purchase price.
For pre-1978 properties, the seller will send along a Lead-Based Paint Disclosure.
Review HOA Documents
Days 12 - 14
If the property is in a homeowners association (HOA), then the seller will deliver the associated governing documents to the buyer for the buyer's review.
Days 15 - 25
If the buyer is using a loan to purchase the home, the bank will hire an appraiser on the buyer's behalf (and expense) to inspect the property and determine its value.
Usually the lender will have collected a $650-$750 deposit up front to pay for the appraiser's fee. If the deal is terminated, the appropriate portion of that deposit is transferred to the appraiser. If the deal goes on to completion, the escrow company pays the appraiser at that time from the buyer's deposit.
Assuming a home inspection has been done, once the appraisal is ordered the buyer has spent about $1,000 to $1,600 in nonrefundable services so far.
If the property is a single family home or land, normally the seller will pay for a survey to be completed. The survey will show the boundaries of the property and will highlight any encroachments on or by the neighbors.
In the first few days of the escrow period, the buyer will select a termite inspector. On about day 20 or so, the inspector will investigate the home and produce a report showing any termite infestation that may be present. Typically, the seller pays for the inspection and pays for any termite treatment that may need to occur.
Final Loan Approval (FLA) and Down Payment
About 5 days or so after CLA, the lender will provide another letter giving final loan approval. The buyer will pass the letter on to the seller.
Around the same time, the buyers should move the remainder of their down payment (in addition to the earnest money deposit already made) to escrow. Normally, the buyers will wire these funds to escrow.
Signing and Final Walk-Through
Days 30 - 32
The buyer will do one last walk-through to make sure the property is in its expected condition.
The lender and escrow will prepare a large pile of documents for the buyer to sign. Many buyers confuse "signing" with "closing," but they are two different things. In Hawaii, signing typically happens 4 to 7 days prior to closing.
(or 45, or 60)
Most transactions in Hawaii take about 45 days to complete, but there is a lot of variation. They can close in 21 days, or they can take several months in extreme situations. We aim for 35-day transactions, which are seen as speedy but often doable.
As you may imagine, then, the dates and timelines above are approximate.
In Hawaii, escrow submits the deed -- which transfers the property from seller to buyer -- and other documents to Hawaii's Bureau of Conveyances (BOC) 2 days ahead of the scheduled closing date. On or around 8am on the morning of closing, escrow is notified by the BOC that the documents have recorded. Then escrow informs the parties of the same.
Closing is when keys and money change hands.