How does closing work when buying a home or property on Maui, and how much time do you need? Since most real estate buyers in Hawaii are coming from out of state, they come with their own ideas of how the transaction closing is handled. Whether you have previously closed a real estate sale or not, here’s a brief rundown of how it works here on Maui.
1. Transactions are handled by the title and escrow company, not by lawyers. The escrow company acts as the neutral third party to coordinate title documents and funds. We have many good companies to work with and they all do a great job. Lawyers are not a standard part of the equation, but clients are welcome to seek legal advice if they feel it’s important. Once buyer and seller have agreed to price and terms by way of the purchase contract, escrow is opened. Yippee!
2. Buyer and seller proceed to remove contingencies as stated in the purchase contract, and closing day approaches. The timing in the last week is critical.
3. Signing of the final documents will need to be done in person, and papers need to be notarized. Signing should be at least 2 days before closing, and more like 4 business days if loan papers are signed and funds to be released. Buyers and sellers are usually scheduled to sign at different times and they do not meet face to face at “the closing table.” Signing can take place at the escrow office, or at a place more convenient for the client. If the client is off-island then arrangements are made for a mobile notary to meet with them. Be sure to have some picture ID with you when signing so the notary can verify who you are.
4. Documents are recorded at the Bureau of Conveyances in Honolulu, for all transactions on all islands. The actual physical documents are sent over and need to be in place the day before closing can occur. This adds an extra day for sales that are not on Oahu.
5. Once all documents are recorded, the escrow company will be notified and they in turn notify the buying and selling agents who can inform their clients. It’s usually first thing in the morning, and this is Closing Day. Congratulations!
6. Fridays are a great day for closing as the preceding days of the week will be scheduled for signing and the release of funds.
** Closing does not occur at the same time as signing, unlike some locations on the mainland. Please keep this in mind if you need to travel to Maui for closing. Consult with your lender or real estate agent.
It takes time to ensure everything is done correctly during the sale, so please consider at least 30 days for a cash sale, and 45 – 60 days for a sale requiring financing. If you’re in a big hurry…well, you know what they say: Slow down, this ain’t the mainland!
Be sure to work with a Maui REALTOR® when buying or selling your Maui property.
Georgie Hunter, R(S), e-Pro
800 667-5028 ex 8241
Direct: 808 283-0635