Home Buyer’s Guide

by Eric Olson

2015

With so many realtors out there, Why work with Eric Olson?

Buying a house is difficult and stressful, no matter if it's your first or your fifth. It's even more confusing on an isolated island in the middle of the Pacific.

!  As a career military officer, having spent his last 15 years of active duty on Oahu, ERIC OLSON is uniquely qualified to help military families (and hard working civilian families) navigate the confusing waters of home buying on this beautiful island. 

!  As a retired Marine, coming from a family of prior service members, Eric has developed a personality of trust, honesty, dedication, and hard work; and, he puts those values and abilities to work for his clients. He simply doesn’t know how to do it any other way. 

!  As a family man, whose wife has spent her career in education (15 years of it in Hawaii), Eric also has insights and experience with the education system on Oahu. Eric will address ALL of your issues and concerns about Oahu’s schools. 

Olson family enjoying the day in Lanikai

Welcome to

Oahu Market the

Monthly distribution of

Sales on Oahu

300

350

400

450

500

550

600

650

700

750

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Average monthly combined Single Family Home and Condo sales over the last 5 years

S

The real estate market moves in cycles, governed by supply and demand. The months of supply, or time it would take for all of the current homes on the market to sell at the current rate, without new inventory coming on the market, determines the type of market you are in – buyer’s or seller’s.

1-4 months 5-6 months 7+ months

Balanced Market

Seller’s Market

Inventory Demand

Price

Buyer’s Market

Inventory Demand

Price

Months of Supply Real Estate Prices impacts

How the

Characteristics of

Home Buyers

Where do today’s

Buyers find their

Homes?

34%

53% 47%

of homebuyers were under 35 years old. of first-time buyers were between 25 and 34 years old, while most repeat buyers were between 35 and 54 years old. of home purchasers in 2014 were first-time homebuyers.

for 2014

Advantages Home Ownership of

A home is most likely the biggest purchase you’ll ever make, and it marks a major step in life. There’s no scientific formula that tells someone when they’re ready to buy, but you should take stock of your financial situation, as well as your personal lifestyle. In general, there are a number of advantages to home ownership, both tangible and intangible, that you’ll want to consider.

Investment Every payment you make on your mortgage builds equity and puts you one step closer to acquiring your home. Every improvement you make to your property not only enhances your way of life, it also adds value to your home.

Protection Inflation

Once you purchase a home, the bulk of your housing costs are protected from inflation. That means your only housing expenses that will rise over time are property taxes, homeowners insurance, and maintenance costs.

from

Equity Because a home increases in value even as you are paying down your loan, most buyers effortlessly build equity. Equity creates wealth and can help you accomplish any number of financial goals, such as paying for retirement and funding a child’s education.

Tax Advantages

Your real estate taxes and the interest on your mortgage are deductible from your income tax. For many buyers, that tax break can go a long way toward making home ownership just as affordable as renting.

Satisfaction For many people, home ownership simply makes life more enjoyable. Whether it’s the pride that comes from decorating and maintaining your home, or the knowledge that your family will grow up in the neighborhood of your choice, home ownership is still the American Dream

Finding Home

your

Mortgage Pre-Approval Unless you are fortunate enough to purchase with all cash, you should take the time to obtain a mortgage pre-approval. A pre-approval not only strengthens your offer by letting the seller know that you have already proven your creditworthieness to a lender, but it also lets you know how much money you can actually spend. It is more in-depth than a mortgage pre-qualification, and requires you to provide tax returns and bank statements to your lender, who will also check your credit. In today’s market, where you are often competing with multiple offers, a pre-approval is key to a successful offer.

Once you have obtained a mortgage pre-approval …

ready

home search to begin your

You are

Review Listings

Using guidelines you set, Eric will present you with available listings. In addition to price and property attributes, pay close attention to data like property taxes, market time and monthly assessments for condos and town homes.

Properties

Eric will schedule showings and accompany you on each appointment. When you walk through a home, some things to consider are: how space functions for your lifestyle; what’s included in the total square footage (lanai and garage); and, in new construction, which features are standard and which are upgrades.

View

Patience According to the U.S. Department of Housing and Urban Development, the average buyer will view 15 homes before buying one. But, that is just an average. Some buyers will purchase the very first home they see. Others will look at even more homes.

Open House

Remember, when attending Open Houses, be sure to mention that you are being represented by an agent. This will save you from being inundated with calls from other agents trying to represent you. Eric will supply you with some his business cards to make the Open House sign-in process even easier.

Compare Properties

Discuss each home you see with Eric, and he will merge your expectations with the marketplace. With candid feedback, he will be able to adjust parameters such as location and property features in order to present you with relevant alternatives.

When you find a home and are ready to make an offer, Eric will perform a Comparative Market Analysis or CMA. This report compares the subject property with other properties that are currently listed and recently sold to help you formulate your offer.

Making Offer Chances are, when you find a home you absolutely love, someone else may love it too. It’s important to act quickly and make an educated offer based on a rational approach to pricing and negotiating. Eric excels in this arena.

an

To get the process rolling, Eric will draw up a contract that includes your offering price and other terms and contingencies. Buyers often focus on price, but there are many other important terms to a real estate contract. You can include any terms you like, and can adjust the terms to make your offer more appealing to the seller. Here are the most common elements of a real estate contract:

Price The market will determine the final price, but Eric will help you formulate an offer based on comparable listings and sales, as well as current market conditions.

Mortgage

A mortgage contingency stipulates that you will buy the home subject to obtaining a mortgage. If you cannot obtain a mortgage and the seller will not agree to finance the sale, then the contract will be void. The terms of the mortgage must be stated in the contract, and you will also need to establish a timeframe for securing financing.

Contingency

Disclosure Sellers are required to disclose, in writing, any issues that could measurably affect the value of the property to a “reasonable person”. Additionally, the listing agent is required, by law, to disclose any property information not disclosed by the seller. This disclosure is not a warranty, but it does provide you with a list of EVERY issue the seller, or seller’s agent, is aware of regarding the property. When the disclosure is combined with a professional home inspection, you have the best possible picture of the property’s condition.

Home Inspection

Given the age of many of the properties in our market, and our harsh tropical climate, a professional home inspection is of utmost importance. A thorough inspection by a licensed home inspector protects you against structural or material problems that are not detectable in a casual walk-through. You, not the seller, are responsible for hiring and paying the inspector, but compared to the price of purchasing the home, it is a very small cost for that peace of mind and a better understanding of the home you are buying.

Termite Inspection Termites are among the most destructive insects there are, especially in the tropics. A subterranean termite colony can eat about a pound of wood per day, so a thorough termite inspection is essential! You generally select the inspector, and the seller generally pays for the inspection (through escrow).

Survey The survey will show you the property’s boundaries and determine if there are any encroachments. Fortunately, most encroachments are minor and have usually been in existence for many years. If an encroachment is found, you can ask the seller for an encroachment agreement. If they are not able to obtain one, you have the option to either accept the encroachment or cancel the contract. The seller is responsible for paying for the survey, and delivering you a survey map.

Earnest Money

This is a deposit, given by you to the seller, which secures the contract until closing. It is usually in the form of a check, and must be given to the seller or seller’s agent along with the contract. Earnest money is held in an escrow account until the closing, when it may be applied to the down payment and/or closing costs. If the sale does not go through due to contingencies covered within the contract, then the earnest money is returned. However, if you are in breach of contract, then the seller may be entitled to keep all or a portion of the earnest money.

Negotiating Counter-offers

Negotiating for a home can be a highly charged and emotional process. Often times, there is a fair amount of negotiation – offers and counter-offers – before both parties are satisfied. Eric excels at this, and draws from his experience and market knowledge to offer sound advice during a negotiation. He provides a buffer between the you and the seller/seller’s agent, so no matter how heated negotiations get, you will always look like a cool customer, and in the end, get what’s important to you.

Closing Date One of the most important terms of a real estate contract is the closing date – the date that ownership changes hands. This is usually, but not always, the day that the seller must vacate, and you may occupy your new home. Flexibility on the closing date can give the buyer a big advantage over other potential buyers. Occasionally, it can also allow you to negotiate a lower price, or other more favorable terms.

Agent YOU

How an works for

Home Complicated Purchasing a

is

With a wealth of online resources, a growing “for sale by owner” market and countless cable TV shows on the subject of real estate, it’s not surprising that some homebuyers consider a “do it yourself” approach when purchasing a new home.

But for most, a real estate professional is an indispensable partner in the home-buying process. While buyers today are more educated about real estate than ever before, all the research in the world can’t match the “in-the-trenches” understanding of what’s happening in YOUR market TODAY. Eric brings you this knowledge. Eric knows the Oahu Market and will ensure you don’t wind up overpaying, or even worse, losing out on the home of your dreams.

Real Estate

Flow Chart

transaction

Deal together

Putting the

Half Battle is only the

KEEPING IT TOGETHER IS the other half, And it can be JUST AS CHALLENGING

The time from contract to closing is full of loose ends and potential pitfalls. Eric brings his Marine Corps diligence, initiative, and attention to detail to the transaction to coordinate and oversee the following steps:

!  Deliver earnest money to seller or seller’s agent

!  Recommend and schedule a home inspector, and accompany the buyer on the inspection

!  Obtain important documents, such as property disclosure forms and condominium documents (budget, declaration, association minutes), and deliver them to the buyer

!  Recommend and schedule a termite inspector and accompany the buyer on the inspection

!  Recommend service providers for moving, home improvement and repairs

!  Schedule a final walk-through. Again, both buyer and buyer’s agent should be present

!  Coordinate and attend your closing

Eric will work closely with you, your lender, and the seller’s agent to make sure everything is in place for a smooth and efficient closing.

There is no need to print, fax, or scan any real estate documents because all of your documents can be signed online with Digital Ink or DocuSign. Both are leading providers of real estate electronic signatures, so you can be assured your signature is secure. Electronically signed documents are clear and easy to read. Sign with just a few mouse clicks from anywhere in the world, as long as you have internet access, even from your smart phone.

Eric will give you a completely objective and professional opinion of the properties you are considering. Also, remember that as your buyer’s agent, Eric’s commission is paid by the seller. You have nothing to lose and everything to gain by tapping into Eric’s expertise. From the moment you select him as your agent, Eric will be working for YOU.

About Century 21 All Islands #1 Century 21 franchise in Hawaii

CENURY 21 All Islands has more than 30 years experience serving the real estate needs of Hawaii. During this time we have assembled a highly-trained sales force dedicated to providing our clients with the highest service possible. And, we benefit from the support of the best known brand in real estate and one of the largest real estate organizations in the world: CENTURY 21® truly sets The Gold Standard for the rest of the real estate industry.

We can successfully help you navigate the Hawaii real estate market, no matter whether you are a first time buyer or seller, listing a luxury home, or somewhere in between. With offices statewide—Oahu, Maui, Kauai and The Big Island of Hawaii, we cover every neighborhood, giving back to the communities we serve and building an enviable base of knowledge and understanding about what it is like to live in each tract of paradise.

Eric Olson RA, MRP, RSPS 808.389.8071

eric@ericolsonrealty.com www.ericolsonrealty.com

Your Property is my Priority

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Chris C. - Kailua, HI