How to Buy a House in Hawaii: 8 Steps Real Estate Experts Recommend

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By Thomas O'Shaughnessy Updated October 1, 2023


8 Steps to Buying a House in Hawaii

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Now that the housing market is finally calming down after the pandemic[1], buyers are facing a new challenge: Soaring mortgage rates.[2]

In Hawaii, the average 30-year fixed mortgage rate is 6.78% — up from 2021's historic lows. This raises the average monthly mortgage payment to $4,377 (assuming a 20% down payment at the median home value).

But buying a home in Hawaii is still possible, even for first-time home buyers. Many markets are seeing frequent price drops and fewer offers, giving motivated buyers the upper hand in negotiating for the best price.

In this guide, you’ll learn how to buy a house in Hawaii with confidence no matter what the market brings. Learn why you can trust our advice.

Whether you're actively house hunting or just starting to browse homes on Zillow, it's never too early to find a great local realtor to guide you on your search. An experienced agent can help you navigate a tricky housing market, explore your financial options, and negotiate the best deal possible.

Best of all, hiring a real estate agent comes at no extra cost to you — since the seller typically pays both their listing agent and your buyer's agent.

Ready to find a great local realtor, but not sure where to start? The best (and easiest!) option is to try a free agent matching service like Semya-Moya. Answer a few simple questions about your home buying goals, and Clever will match you with hand-picked agents from Keller Williams, RE/MAX, and other top brokerages in your area. Find a top local agent and make your home buying dreams a reality today!

Step 1: Save for a down payment

🔑 Key takeaway:

Your down payment can be less than 20% of the purchase price — $168,186 for the typical home in Hawaii — but you'll have to purchase mortgage insurance and pay more interest over the life of your loan.

Your down payment is the first part of your home's purchase price that you pay at closing. Your mortgage lender will pay the remaining balance.

Typically, mortgage lenders in Hawaii want you to contribute 20% of the purchase price as a down payment. That would be $168,186 for a $840,928 home — the typical home value in Hawaii.

However, you have options to lower your down payment amount.

Government backed loans, like VA and FHA loans, allow you to contribute 0% and 3.5% of your home's purchase price respectively. Even conventional loans allow for down payments as low as 3-5% (though the minimum varies by lender).

But making a down payment of less than 20% comes with some risks.

First, because you're borrowing more money, you'll have a higher monthly payment and pay more in interest over the life of your loan.

Second, you may have to purchase mortgage insurance.

Conventional loans require private mortgage insurance (PMI) until your loan balance reaches 80% of the purchase price. FHA loans, on the other hand, require a mortgage insurance premium (MIP) for the life of your loans.

Mortgage insurance costs around 1% of your mortgage balance annually. However, rates vary based on your down payment and credit score. Typically, your mortgage insurance payment is added to your mortgage payment each month.

VA loans don't charge mortgage insurance. Instead, you'll pay a VA loan funding fee at closing, which can range from 1.4% to 3.6% of the purchase price.

» READ MORE: Everything you need to know about low-income home loans

Hawaii down payment assistance programs

First-time and low-income homebuyers may qualify for one of the several down payment assistance programs available in Hawaii. Although eligibility requirements vary by program, there are plenty of great resources available. Here are just a few options in Hawaii to research and apply for:

Down Payment Assistance Loan Program

The HHOC (Hawaii HomeOwnership Center) offers a Down Payment Assistance Loan Program to low-moderate income homebuyers afford a home. Eligible borrowers are able to buy a home with only a 3% down payment and without mortgage insurance. A low monthly payment is required.

Deferred Closing Cost Loan

The HHOC also offers a Deferred Closing Cost Loan for first-time homebuyers with a first mortgage from HHOC. Eligible borrowers may receive a 15-year deferred loan of up to $10,000 without any monthly payments or interest.

To qualify for the program, your annual household income must not exceed 120% of the average median income for your county. You will also be required to take first-time homebuyer education classes.

U.S. Department of Housing and Urban Development

You can find more of Hawaii's homebuyer programs here.

Step 2: Find a great real estate agent in Hawaii

🔑 Key takeaway:

Interview multiple agents to find one who knows your target neighborhoods, has experience in your price range, and communicates well.

Your real estate agent will be your main ally during the home buying process. Besides finding and showing you properties, your agent will help you make offers, negotiate contracts, and navigate the closing process. Plus, they can recommend other service providers like title companies and inspectors to help you buy your home in Hawaii.

Don't rush into choosing an agent. Instead, take the time to research and interview multiple real estate agents who have experience in the neighborhoods you're interested in. You should pay attention to a realtor's:

  • Years of experience
  • Number of transactions in the last year (the more the better!)
  • Experience in your price range
  • Overall review score
  • Individual reviews and complaints

👋 Find the best realtors near you!

Finding a great real estate agent shouldn't be complicated. Let Semya-Moya do the hard part and match you with experienced local realtors who are experts in your market.

Enter your zip code below to compare top agents from trusted brands like Keller Williams, Berkshire Hathaway, and Coldwell Banker, then choose the best fit for you. It's 100% free, and there's no obligation.

Step 3: Get preapproved for a mortgage

🔑 Key takeaway:

Once you're preapproved for a mortgage, it's imperative that your financial situation doesn't change. If your credit drops, it can derail the process and keep you from closing on your house.

Here are some easy ways to ensure your credit doesn't change after you receive your preapproval letter:

  • Avoid opening new credit accounts
  • Don't close any accounts that have been open for a long time
  • Make all of your credit card payments on time

» LEARN MORE: What factors do mortgage lenders consider?

A mortgage preapproval letter is an offer to lend you up to a certain amount of money to purchase a home. It shows sellers that you are a serious buyer who is financially qualified to make an offer on a home.

Most sellers in Hawaii will require preapproval before showing you their home.

You don't have to decide on one lender right now. In fact, you should compare interest rates and preapproval amounts from several lenders to make sure you're getting the absolute best terms when you buy your Hawaii home.

Step 4: Choose the right location

🔑 Key takeaway:

Search for neighborhoods where:

  • Home prices are within your price range
  • Home values are on the rise
  • The local amenities support your lifestyle

Currently, the typical home value in Hawaii is $840,928, but don't worry if that doesn't perfectly match your budget. Home prices vary dramatically from city to city and even from neighborhood to neighborhood!

Also, look at past home value trends. This will give you an idea of how much your home's value could go up over the next few years.

To give you an idea of how appreciation could impact what your house is worth in the future, consider these examples from three neighborhoods in Honolulu:

Home value appreciation in Honolulu

Neighborhood 2015 Current Appreciation
McCully-Moiliili $422,125 #N/A #N/A
Manoa $1,189,745 $1,697,196 29.9%
Waikiki $387,190 $491,002 21.1%
Show more

Step 5: Start house hunting in Hawaii

🔑 Key takeaway:

Listing prices in Hawaii have increased over the last year while inventory continues to dip. There won’t be a lot of options available and little wiggle room regarding the price. If you’re determined to buy, keep an open mind to your real estate agent’s suggestions. While it may be difficult to find the perfect home, you may be surprised with the listings your agent can find.

Searching for homes in Hawaii is the fun part of the home buying process! You'll get to look at a variety of homes and discover what you really want in a home.

Make a list of everything you want in a home and prioritize them. At the top of the list should be the items that are most important to you. This will help you separate your "must-haves" from your "nice-to-haves."

Your agent can help you understand if your wants are realistic for your budget and favorite neighborhoods or if you need to rethink what you're looking for.

Look at current housing inventory

The timing of your house hunt in Hawaii can have a big impact on your number of options. For example, in Hawaii, July has historically seen the most homes for sale. Searching in this season could give you more options and a greater likelihood of finding your dream home.

On the other hand, December gives you the fewest choices in Hawaii. Historically, there are 38.4% fewer homes for sale than during Hawaii's peak season.

Housing inventory in Hawaii by season

Step 6: Make an offer

🔑 Key takeaway:

Houses in Hawaii may sit a bit long in the market, but the limited inventory in the state is leaving very few available at the end of each month. This means that you have some time to mull over the offer you plan to write, but don’t put it off for too long. Consult with your realtor to come up with a fair and competitive figure that will still be a good deal for you.

Once you find a Hawaii house you love, it's time to make an offer. Your real estate agent will help you write a compelling offer that gives you the best shot of convincing the homeowner to sell to you.

Currently, in Hawaii, homes stay on the market for 82 days before going under contract. However, every market goes through seasonal changes. During busier months, homes get snatched up more quickly than others.

Historically, Hawaii homes sell fastest in September, where the average property is only on the market for 75 days. If your home search falls around this time, you should be prepared to move quickly and potentially make offers on several homes before yours is accepted.

On the other hand, if you buy in December, you have a bit more time to search. Homes typically stay on the market 12 days longer than Hawaii's annual average.

Average time homes spend on market in Hawaii

» LEARN MORE: What should an offer include?

Step 7: Inspections and appraisals

Inspections and appraisals are an opportunity for you to better evaluate the home's condition and value before officially purchasing it. You may have an opportunity after this step to renegotiate the terms of your contract with the seller if something unexpected pops up.

🔑 Key takeaway:

  • Inspections: A licensed professional checks the house for any unseen, unexpected, or potential issues.
  • Appraisals: An appraiser hired by your lender examines the house to determine how much it's worth.

Home inspections in Hawaii

Having your Hawaii home inspected by a licensed inspector gives you peace of mind about the condition of the property before you commit thousands of dollars to purchase it.

Your inspector should check out the following parts of the property:

  • Roof
  • Foundation
  • Electrical system
  • HVAC system
  • Plumbing

If the home has a septic system, you should also pay for a septic inspection to make sure it doesn't have any problems that wouldn't be covered in a typical home inspection.

Hawaii-specific inspections

Hawaii requires sellers to disclose known issues of a property to potential buyers, but it's recommended to get additional tests done to ensure that the home is in good condition. Before you decide to close on a house, consider getting these inspections done first:

  • Pest inspection: Termite and pest inspections may be required by some lenders in order to secure a loan. However, it's wise to complete an inspection to make sure the home is safe and free from any unwelcome critters.
  • Indoor air quality inspection: Getting an indoor air quality test can help you and your family avoid potential respiratory problems when moving into a new home.


Appraisals determine the value of the property. If you're using a mortgage to buy your new home, your lender will order an appraisal to make sure the home is worth the money that it's loaning you.

» LEARN: 3 options for buyers after a low appraisal

Step 8: Close on your new home!

🔑 Key takeaway:

Before you close on your new home, you and your agent will do a final walkthrough of the property to ensure that it's still in the expected condition.

On the closing date, you'll meet at the title company to review some important paperwork and settle your closing costs. You'll be asked to sign several pages to finalize the transfer of your Hawaii home, so make sure you fully understand each document before signing.

Some common forms will include:

  • Your final loan application
  • The deed
  • The mortgage promissory note

After the paperwork is finished, you'll pay off your closing costs. The title company will simply ask for the total amount due, and then they'll distribute your funds to every service provider you owe.

Homebuyers can generally sort their closing costs into four different categories:

  • Title and escrow charges: Fees owed to the title company for their services. Sometimes, buyers and sellers split this cost since the title company helps facilitate the closing.
  • Lender fees: Fees paid to your mortgage lender for originating and underwriting your loan. These fees will usually make up the bulk of your closing costs.
  • Prepaid costs: Ongoing costs of owning a home. Some lenders require new homeowners to pay expenses like property taxes and homeowners insurance up front.
  • Other closing costs: Miscellaneous costs that vary depending on the buyer’s situation. Other closing costs frequently cover pest inspections, certifications, and real estate attorney fees.

Buyers in Hawaii typically pay 3–5% of the purchase price in closing costs. For a $840,900 home — the typical home value in Hawaii — that's between $25,227 and $42,045!

⚡Make your home-buying dreams a reality!

Ready to make your home-buying dreams a reality? The first step is to find a top local realtor who's an expert negotiator with proven experience in your market.

Enter your zip code below to compare the best agents from trusted brands like Keller Williams, Berkshire Hathaway, and Coldwell Banker, then choose the best fit for you. It's 100% free and there's no obligation.

Frequently asked questions

Do I need a real estate attorney in Hawaii?

In Hawaii it's required for a real estate attorney to be part of every home sale. While your agent can make recommendations, remember you get to make the final decision. Interview lawyers before hiring them to make sure they have the experience you need.

What are the steps to buy a house in Hawaii?

  1. Save for down payment
  2. Get pre-approved for a mortgage
  3. Choose your preferred Hawaii neighborhoods
  4. Partner with the right real estate agent in Hawaii
  5. Go house hunting
  6. Make a strong offer
  7. Inspections and appraisals
  8. Do a final walkthrough and close

Does Hawaii have a first time home buyer program?

No, but the Hawaii Housing Finance and Development Corporation currently offers a Mortgage Credit Certificate to low-income homebuyers. This certificate reduces the federal income tax a potential homebuyer would need to pay, which could help them qualify for a mortgage.

The program is open to those who meet household income limits for their county and haven't owned a primary residence in the past three years. Interested buyers will need to submit a $25 application fee and a $400 processing fee.

» READ: What are the top first-time homebuyer programs?

Why trust us?

Semya-Moya is a free agent-matching service that has helped more than 82,000 people buy and sell homes. We partner with over 2,700 top-performing agents nationwide at national brokers including Keller Williams, RE/MAX, Century 21, and more. We also help buyers save money with cash back after closing — no strings attached.

We’ve earned buyers’ trust with a rating of 4.9 out of 5 stars on Trustpilot and over 1,800 customer reviews.

Our team of industry-leading researchers are committed to making homeownership more accessible by educating buyers through guides like this one. We've spent thousands of hours analyzing publicly available data, surveying consumers, and interviewing industry experts. Our research has been featured in The New York Times, Business Insider, Inman, Housing Wire, and many more.

Learn more about Clever.

Article Sources

[1] Federal Reserve – "Housing Market Tightness During COVID-19: Increased Demand or Reduced Supply?". Updated July 08, 2021. Accessed October 11, 2022.
[2] Consumer Protection Financial Bureau – "The Fed is raising interest rates. What does that mean for borrowers and savers?". Updated March 17, 2022. Accessed October 11, 2022.

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