When most people think about the sun and the sea while standing on an exotic beach, they’re thinking of Mexico or an island in the Bahamas. However, getting the tropical vacation experience from the front yard of your oceanfront house is easier than ever, and doesn’t require the bureaucratic hassle of leaving the United States. Living in Maui is the quintessential home experience for those who want to live in a tropical dream while still staying stateside.
While there are a lot of amazing properties on Maui, Maui real estate can be in very high demand, so be ready to take swift action on a property that catches your eye. One of the best tools at your disposal for this is the earnest money deposit (EMD).
First Thing Is First… Finding Your New Home
Working with a real estate agent will greatly speed up the search for a new home, and in the process provide you with an expert to get your questions answered about all the details of making a purchase. It is vital to go through all the steps and procedures involved with the normal real estate routine, plus any special considerations for the real estate laws of Maui specifically. Once you find a property that gets you excited, it is time to take a look at an EMD.
Earnest Money Deposits: Staking Your Interest In A Property
Most homebuyers, working with a realtor, can find a great candidate for a new home in paradise in very little time. Once a homebuyer has found the house that they want to make their home, the process in order to get the ball rolling will be described to them by the real estate agent.
In general, first they must make an offer on the house in question and put down an EMD in accordance with an agreed upon contract created after the selection process. This solidifies their official interest and takes them to the next steps in buying their new abode. The EMD is a clear statement that the buyer is serious about the property and sets the property aside for them while the offer is being addressed by both parties.
There are a lot of reasons to state interest in a piece of property, including wanting to claim the house before another prospective buyer. It also serves to speed up the home buying process. In West Maui, especially such historic areas as Lahaina, Kaanapali, and Honokawai, it’s crucial to put down an EMD quickly, because of the scarcity of land and the large market for houses in an area so highly prized.
Know The Details of the Property & How Your Contract May Effect Your Earnest Money Deposit
While it may sound tempting to get your EMD and offer in ASAP, it is still imperative to know the house in question is truly the right one before you do. This means knowing when a dream home is really a dream home, and not just a pretty picture in a brochure. Homebuyers must, with the help of their realtor, become knowledgable on how the real estate buying process works, and the effects the nearby property and locations may have on it. This includes information regarding any local Home Owners Associations or local committees interested in the rules and management of related properties.
Homebuyers should put down an EMD only after being fully aware of any laws and regulations specific to the location of the property as well as any general writings about the law of real estate, including escrow laws and regulations. For instance, no one can act as an out-of-state escrow depository unless they’re specifically licensed to act as a Hawaii escrow depository. This kind of knowledge is crucial for both the buyer and the seller of any property in question.
An Earnest Money Deposit is Generally Refundable
According to the terms of your purchase contract, your EMD will generally either be applied to your purchase or refunded to you. Your individual contract will have the time frames and other requirements regarding the EMD and it is important understand your specific terms. In the specific event that there’s a complication with the sale and the EMD is threatened, be aware that a refund of the deposit may not be issued if the stipulations presented in the contract are not met. Usually these consist of time limits in order to keep the house available to a buyer but to prevent the property being tied up in real estate limbo for a long period of time.
Your realtor will have more information on the specifics of EMD’s, to make sure you use them as the valuable resource they are for your home buying process.