The Home Buying Process for First-Time Homebuyers on the Big Island

A Step-by-Step Guide for Buying Your First Home on Hawaiʻi Island

Buying your first home is exciting, and a little confusing. There are new words, new deadlines, and a lot of people involved. The good news is that the process follows the same basic steps every time. Here’s how it works, from your local real estate specialists.

Step 1: Talk to a lender

Start by finding out what you can borrow. A pre-approval from a licensed lender turns a list price into a monthly number you can plan around. It also shows sellers you’re ready to buy.

Step 2: Choose your agent

You’re not required to have an agent, but most buyers do. Since August 2024, buyers who work with an agent sign a written agreement before touring homes together. It spells out what the agent will do and how they’ll be paid. That compensation is negotiable, so ask about it up front.

A good agent knows the local details. We negotiate for you, keep track of every deadline, and know the things that don’t show up online, like which neighborhoods have association fees or how a lava zone affects insurance. As a boutique brokerage, we keep it personal from your first showing to closing day.

Step 3: Make an offer and put down earnest money

Earnest money is your good-faith deposit. Once your offer is accepted, you make a deposit to show the seller you’re serious. In Hawaiʻi, it goes to a neutral escrow company, not to the
seller, and it counts toward your purchase at closing.

Will you get it back? It depends on timing. Your contract has contingency periods, like the inspection period. If you cancel within those windows under the contract terms, your deposit is
typically returned. If you back out after they’ve passed without a contract reason, it may be at risk.

Step 4: Get a home inspection

This is your chance to look closely before you commit. On the Big Island, pay special attention to:
● Roof: age, leaks, and wear from sun, rain, and salt air.
● Plumbing: pipes, the water heater, and the wastewater system. Many homes here use a septic system or cesspool, and some use rain catchment for water.
● HVAC and ventilation: many island homes don’t have central air, so check what’s there and look for signs of moisture or mold.
● Pests: a termite inspection is a standard part of Hawaiʻi home purchases.

Some risks won’t show up on the report. An inspector checks the home, not its location. Look up the flood zone with the State’s Flood Hazard Assessment Tool (fhat.hawaii.gov), check
the lava zone, and get insurance quotes early.

Step 5: The appraisal

If you’re using a loan, your lender orders an appraisal. A licensed appraiser visits the home, looks at recent nearby sales, and gives an opinion of value. If it comes in at or above your price, you keep moving. If it comes in low, your options depend on your contract, and your agent will walk you through them.

Step 6: Closing

Escrow brings it all together. Your loan is finalized, documents are signed, and the sale is
recorded. Then you get the keys.

You Don’t Have to Know It All

First-time buyers don’t need to memorize every step. You just need someone who will explain each one as it comes up. That’s the part we love. If you’re thinking about buying your first home, we’re a locally owned small real estate brokerage with Agents available to guide you and always happy to talk story.

Buy. Sell. Stay.
Salt Water Real Estate, saltwater heals everything