5 Steps to Finding the Perfect Oahu Home

You’ve finally decided to make the big move to Oahu… or maybe this is your first home purchase, here on the island? Maybe you are trading up or down, and it’s been years since you’ve purchased… What are the steps you should take in finding the perfect Oahu home? Where do you start? Watch our video for a summary, or read on, to find out more!

There are 5 basic steps to finding the perfect Oahu home.

1. Find a Great Full-time, Full-Service Realtor with Lots of Experience and Expertise

Experience is Necessary, with Both Buyers and Sellers

It’s important, first, to find an experienced realtor; someone with many years of helping buyers and sellers of Oahu real estate. Realtors should have experience with both buyers and sellers because it helps to know both what buyers want and need, and what sellers expect from buyers. This knowledge can help make your offers stronger and more competitive. It also enables your realtor to have a full understanding of the market conditions and various competing factors that will affect finding the perfect Oahu home.

Local and Island-Wide Expertise and Both Important

It’s also important that your realtor has experience in the geographical areas in which you are looking. The odd thing about Oahu real estate, however, is that many buyers start out looking in one area and end up buying in another area. Sometimes, this is because of unfamiliarity with the various areas and neighborhoods of Oahu. Other times, it is a result of affordability or not being able to find the right property in the first neighborhood you liked.

As a result, you might be best off with a realtor that knows all of Oahu and has experience in many areas of the island. It is great when your realtor can offer numerous ideas for places to live that would work for you. Having options is good and being prodded into searching in only one area may not always be the best solution. With an experienced realtor, you may discover a whole new neighborhood that you really love, and that meets your needs better than the place in which you originally thought you would purchase.

2. Find a Great Local Lender, So You Can Be Sure of What You Can Afford

The second step in your Oahu home search is finding a great, experienced local lender. Working with a local lender is not mandatory, but it can be a good idea. The reason local lenders are preferred is that they understand the local Oahu real estate market better than mainland lenders. It is safe to say that more Oahu deals close more quickly and easily with local lenders.

Hawaii Properties Can Be Complex

Often local lenders also have special programs and portfolio loans that will be less stringent as to property qualifications or provide benefits particular to Oahu borrowers. For example, a local lender might loan on a property which has an ADU and allows that income to be used to qualify. Another local lender might have less stringent requirements for improvements built without building permits. I had one client, once, that insisted on a mainland lender. That mainland lender refused to lend in a popular, desirable, and somewhat expensive neighborhood on Oahu because there was a sewage treatment plant in the vicinity.

Local lenders provide loans in this same area all day long! Delay and headache could have been easily avoided had my client initially used a local lender.

We are happy to provide referrals to local lenders with whom we have worked in the past and who provided us great service. Let us know if you need one.

You Need to Know What Properties Will Work and How Much You Can Afford

Talk to a local lender BEFORE you start looking at property. You need to know what type of loan you are getting and how much you can afford. Not all loans are appropriate for all properties. If you are limited to VA or USDA loans, you might approach your property search a bit differently. For example, if you are using a VA loan to purchase a condo, you need to make sure that the condo is on the VA approved list or that, at least, it is eligible for addition (another process) to this list.

You need to know how much you can afford, so that your heart is not broken when you find your dream home, only to learn that it is beyond your budget. Get pre-approved, know what properties work for your loan type, and be prepared and ready to go when that amazing home pops up. You will be so happy you were ready!

3. Narrow Down Your Location and/or Search Criteria

What Type of Property Do You Need?

The third step is to identify your needs and your wants. Think about what is most important to you. Identify the number of bedrooms and bathrooms. What view would you like? Pool or no pool? Do you want a rental or ADU type unit for potential extra rental income? Do you want a detached single family home or a condominium? What features are deal-breakers? Older homes in Hawaii tend to have smaller rooms than newer construction homes on the mainland. You may have to come to terms with the fact that your 12 person dining room table will not fit in any of the Oahu homes that you are looking to purchase.

What Location is Best?

You need to also identify your location constraints. How long of a commute to work is tolerable? How close do you need to be to hospitals and schools? Do you prefer easy access to the beach or stunning mountain views? The choices of geography are numerous on Oahu and will be influenced by both your lifestyle and your work and family situation. They will also be influenced by your budget. In general, the closer to the beach, the more expensive the property. They better the views, the more expensive the property. Properties easily accessible to downtown amenities and popular schools are also more expensive.

If you are from the mainland, especially, don’t be surprised if your desires and tolerances change once you starting looking for property. This is completely normal.

4. Have Your Realtor Set You Up With Searches from the Oahu MLS

All REALTORS on Oahu have a great tool to use, to help our clients to find the perfect Oahu home. This is the HiCentral/Matrix MLS Search Portal and it’s the fourth step to find the perfect Oahu home. Once you’ve identified your initial search criteria, your realtor can set up searches to match the criteria. This is the absolute best source available for finding properties that are available, as it has the most recent and up to date information. Zillow and Trulia do not have a direct feed from the MLS. The properties shown there are often unavailable or they are not picked up quickly.

You risk losing the property of your dreams if you rely on these resources. You can also be very frustrated as the property you want shows available there, when it is no longer available.

The HiCentral Matrix Portal is automated and can be set up to deliver new listings at the frequency you desire. The searches can be tailored to you and you can have more than one. You can also ask your realtor to stop or modify these at any time. The Portal allows you to discard homes that you definitely do not like into the “trash” and to mark the homes that you do love with a “heart.” This helps your realtor to identify the homes that will appeal to you the most and to schedule showings.

5. View Homes with Your Realtor

The fifth basic step to find the perfect Oahu home is to schedule showings with your realtor. These will generally be the homes that you identify in the Matrix Portal and/or that your realtor picks for you.

Open Houses

You can also attend open houses, if you wish, with or without your realtor. Open houses are sometimes good to go to because they may provide the first and only showing opportunity. However, this is not always the case. Many times, it is nicer to see a home in a private showing, where you are not rushed and where you have the opportunity to ask questions, without a crowd of people around. Usually, your realtor can find out for you if there will be showings before the first open house.

Often it is best to get in with a private showing first, before the open house, if it is a property likely to be in high demand. The early bird sometimes gets the worm.

It is a great idea to see homes with your realtor whenever possible. It allows your realtor to better understand your needs, wants, and to see your emotional reactions to properties. Your realtor can better identify properties for you, the better she understands your criteria. She can also provide valuable insights and advice at showings. Your realtor is here to help you find the best home available for your price and lifestyle needs.

Don’t Forget to Think Outside the Box

There are other ways to find a perfect home on Oahu, in addition to using the five steps above. I’ve helped my clients locate off-market properties, in several other ways. I’ve also known about properties coming to market, through my network, even before the properties have come on the market.

In a competitive market, sometimes, non-traditional methods should be used to supplement the usual ways. However, generally speaking, the five steps above are the ones to find the perfect Oahu home. At the very least, find yourself a great realtor who you can trust to guide your way in the direction best for you.

Good luck finding that perfect Oahu home! Aloha.

GET on Oahu

Some of the questions we are asked by buyers purchasing homes on Oahu are about taxes. As mentioned previously, Hawaii Real Property Taxes are among the lowest in the entire United States. We love this about Hawaii! However, we do have other taxes, such as GET, which will impact homeowners.

Hawaii General Excise Tax (GET)

One of these taxes is the Hawaii General Excise Tax. This tax is assessed by each County, based upon the gross revenue received by a taxpayer. Many people confuse the Hawaii General Excise Tax with sales tax because it is generally tacked on to the price of goods and services purchased, like a sales tax. You will see GET on your check at a restaurant and on your receipt at a clothing store in the mall, just like a sales tax. There are some significant differences, however, and this is not a sales tax. Hawaii does not have a sales tax. But you should be aware, if you are self-employed, you will owe GET tax to the State of Hawaii, in addition to both state and federal income tax.

Differences Between Sales Tax and Hawaii GET

With a sales tax, the tax is assessed against a PURCHASER of goods and services at the time of purchase. Though, if the provider of the goods and services does not charge the purchaser the sales tax, for whatever reason, the provider may still be liable for this tax. With Hawaii GET, the tax is assessed against the PROVIDER of the goods and services, who is authorized by the State of Hawaii to pass the tax on to the purchaser. A provider is always responsible for the tax and it is paid later, to the State. Importantly, it is assessed upon gross receipts, without taking into account costs or expenses, and whether there is any profit at all from the transaction. GET is assessed also regardless of whether it is passed on to the purchaser. The consolation, if any, is that there is no sales tax in Hawaii and GET on Oahu and the other islands is much lower than most sales taxes assessed on the mainland.

What is Oahu GET?

For 2022, the Hawaii GET is 4%. There is also a Honolulu County (Oahu) surcharge of 0.5%, for a total of 4.5% GET. Consumers will see this passed on as a tax of 4.712% on their bills for goods and services, because GET is actually owed on the tax collected. Yes, there is GET on the GET!

How Does GET Impact an Oahu Homeowner?

You will see GET passed on to you on the following:

~ Your purchases at retail establishments
~ Services from people such as contractors, plumbers, electricians, etc.
~ Services provided by Realtors, lawyers, accountants, and other licensed professionals
~ Online purchases shipped to Hawaii

You also will owe GET yourself, even if you are not self-employed, for:
~ Rental revenue received for investment properties
~ 1099 income received from any source

NOTE: You do NOT owe GET for income received through capital gains in selling a home (this is covered by federal and state Capital Gains Tax) or on the sale price of a home (this is covered by Conveyance Tax).

This is not an all inclusive list of items which warrant payment of GET to the State of Hawaii. Please consult with your tax professional for detailed questions on whether or not you will owe GET for any particular circumstance.