Big Island Buyer Strategies: 5 Tips to Get Your Offer Accepted

The 2023 real estate market has shifted, and I get asked daily how the market on the Big Island is affected. We are still seeing sellers sell and buyers buy. Yet, we are seeing many buyers expecting to find their “perfect” home or a good deal when the market is calling for a more realistic outlook.

Our prices have not dramatically decreased as you might expect in a market on the mainland due to our low number of homes and condos for sale. We still have a very low inventory comparatively. Nevertheless, buyers want deals and offer lower than asking prices.

If you are looking for that perfect home, investment property, or condo at a perfect price, here are five tips for Big Island buyers to get your offer accepted.

1. Get Your Pre-Approval and Proof of Funds

Before starting your home search, it’s essential to know what your budget is. Speaking with a lender first and discussing your finances so you can get a pre-approval secures your buying ability. It also ensures that you understand what your monthly mortgage will be at that pre-approved amount so you can adjust your expectations on price if you prefer to spend less.

Providing a pre-approval letter is much stronger than a pre-qualification letter in a purchase. The pre-approval letter shows the seller you are ready to purchase and are ready to select the home. Providing that letter with your offer shows your motivation to the seller, which can go a long way in the current Big Island real estate market.

2. Consider Initial and Secondary Deposits

Your initial deposit is a “good faith deposit,” meaning it shows your intent to follow through on the deal, assuming nothing is amiss with the home. You can also consider providing a secondary deposit after your due diligence period (the first 14 days of escrow) to give you a more substantial purchase offer. Those deposits can be refundable if you cancel the contract within your contingency periods. Make sure to talk to your agent regarding your refundable deposits before it’s too late!

Your lender will tell you how much cash you need to include in the purchase based on what exactly you’re purchasing. Your lender will typically recommend 20-25% cash down for an investment property such as a rental. Utilizing some of that cash in your initial and secondary deposits can make your offer stand out.

3. What Are the Seller’s Needs?

Working with your real estate agent to see if there are special needs a seller has can also help get your offer accepted. For example, does the seller live in the home and need extra time to move out? Another example – does the seller of the Waikoloa area short-term rental property you’re purchasing need you to honor future bookings? Working with your agent on asking these questions can make or break the offer.

4. Can You Shorten the Due Diligence Period?

The due diligence period is the buyer’s right to investigate facts and do their homework about the property. On the Big Island, the due diligence period for our real estate market is typically 14 days, starting when both buyer and seller sign the purchase contract.

Fourteen working days is not long. If you decide to shorten that period, I recommend starting your due diligence before making an offer on the property. Can you ask for the seller’s disclosure prior to escrow? Can you see if the HOA house rules can be provided sooner?

Suppose you discover something you don’t like or can’t agree with the seller. In that case, it’s essential to cancel the purchase contract before your due diligence period ends to ensure you don’t lose your initial deposit. This is one of the most important tips I can give a buyer looking to purchase on the Big Island. Beginning your due diligence early so you can negotiate a shorter escrow period can also help the seller be more open to your offer.

5. Can You Make a Lower Offer?

In today’s market, making a lower offer can possibly work. Before doing so, it’s important to look at recent past sales of the neighborhood. Having your real estate agent provide a comparable area analysis is the first step. You can also look at past sales, see if others have made lower offers, and see what percentage below asking has worked in the area.

Doing your homework and being aware of the recent and historical sales data will help you find your jumping-off point. As a real estate agent, we are happy to share this with you and discuss past sales. Researching the neighborhood can help you come up with an offer that is more likely to be accepted.

Bonus Tips for Big Island Buyers:

1. Add an escalation clause.
2. Sweeten your offer by making the closing date sooner.
3. Don’t complicate the offer; simple and straightforward is best.

If you’re looking to buy on the Big Island, my experience can help you get the best deal out of what’s available. I have extensive expertise in many of the areas of the Big Island. Reach out to discuss how I can help you in your home search.

With aloha,
Leeana