In this series, I will go over the steps and lingo of the Purchase Contract to help the new Buyer navigate the home buying process. From escrow to contingencies to appraisals, this series will cover the essentials a prospective Buyer should know in order to familiarize themselves with the home buying process in Hawaii.
What is an Inspection Period?
The inspection period is designated on the Hawaii Purchase Contract in paragraph J-1 and realtors often refer to this period as your J-1. During this time period, which is typically 14 days, the Buyer and Buyer's agent are to do their due diligence in looking into any potential issue with the home. If something were to arise during this time that the Buyer is uncomfortable with, they may cancel the Purchase Contract at any time with a full refund of their initial earnest money deposit.
What is a home inspector and what do they do?
Your agent will either book a home inspector directly or will send you a name of a few companies, from which you can choose. The home inspection is paid for by the Buyer and this price starts around $500, however, it is based on the home size as well as any additional add-on inspections you may want to include. These add-ons may include lead-based paint inspection, sewer scope, infrared water detection, and mold inspection, among others.
The home inspection company will spend several hours at the home looking at potential issues that the house may have, including roofing, the exterior and interior of the home, the foundation, and any electrical or plumbing issues. It is very unlikely that you will receive an inspection report with no issues on it, unless the home is brand new. The inspector's job is to find any potential problem the house may have, large or small. After the inspection, the inspector will create a detailed report as well as meet with you to go over their findings. Your inspection report will be a 30+ page detailed report with pictures and descriptions of the findings that will be rated based on the severity of the issue. Once received, it is up to the Buyer whether or not the findings warrant a credit from the Seller or the Buyer may ask the Seller to have the issues repaired by closing. Your real estate agent will negotiate any repairs or credits. Remember, the inspector will find issues, it is their job, however, it is up to you and your agent, whether those issues are worth a credit or warrant canceling the contract.
What's next?
The inspection period is usually the largest hurdle to jump. After the inspection period, if receiving financing, the Buyer will have the home appraised, with the final loan approval. Stay tuned for future blogs that go into more detail on this process.
Thinking about buying a home, but don't know where to start? Check out my First time Home Buyers Guide by clicking below for a free PDF with insights on the home buying process in Hawaii.