The Closing Process in Hawaii: From Contract to Closing

Understanding the Closing Process in Hawaii

Welcome to my blog! As a real estate expert with nearly two decades of experience, I've navigated the distinctive landscape of Hawaii's real estate process countless times. Today, I'll guide you through the closing process in Hawaii - from contract agreement to closing.

Stage One: Contract Acceptance

The journey begins when the buyer and seller agree to the terms and conditions in the purchase contract. All parties sign the contract, addenda, and final counter, establishing an "Acceptance Date" which acts as the basis for most contingencies.

Stage Two: Opening the Escrow

Escrow is opened upon the receipt of the signed purchase agreement and the buyer’s initial deposit. Typically, the buyer chooses the escrow company and officer. The escrow process in Hawaii is slightly different from other states where law firms and attorneys dominate the scene, offering a more interactive experience.

Stage Three: Deposit Delivery

The buyer's deposit is directed straight to the escrow account, either via check or wire transfer. This direct path is safer and minimizes the risk of deal interruptions.

Stage Four: Loan Finalization (if applicable)

If a mortgage is part of the deal, the loan application and finalization process proceeds concurrently with the escrow process. This necessitates effective cooperation and clear communication among the mortgage broker, escrow officer, and buyer's agent.

Stage Five: Ordering the Preliminary Title Report

Once escrow is open, the escrow officer orders the preliminary title report, initiating a title search. The title in Hawaii is recorded at the state level with the State Bureau of Conveyances, differing from county-level recording practiced in other states.

Stage Six: The Unique Challenges of Hawaii

Hawaii's geographical status as an island state adds distinct layers of complexity. Documents need to be signed and funds must reach escrow 3 to 5 days prior to closing. Understanding these nuances is key to avoiding unnecessary delays in your real estate transactions in Hawaii.

Stage Seven: Near-Closing & Finalization

About 48 hours before the recording date, the transaction becomes almost unstoppable. And on the closing day, typically around 8:01 am, the escrow officer notifies both the buyer’s and seller’s agents that everything has been recorded.

Closing Timeline in Hawaii: Final Thoughts

Hawaii’s real estate process is unique: it’s an escrow state and an island state. Ensure all signed documents and funds reach escrow 3 to 5 days before closing. On the closing day, you can expect to receive the keys before noon. Master these, and you're well on your way to a smooth closing process from contract to closing in Hawaii.