If you're buying or selling a home on Oahu, understanding the escrow process is essential. Hawaii handles escrow a bit differently than many mainland states, and knowing what to expect at each stage can help you avoid surprises and close with confidence. Here's a step-by-step look at how escrow works in Hawaii.

What Is Escrow?

Escrow is the neutral process that carries your real estate transaction from an accepted offer to the official transfer of ownership. A licensed escrow or title company acts as a third party, holding your deposit, coordinating documents between all parties, managing payoffs, and handling the recording of the deed with the state.

In Hawaii, escrow services are typically provided by title insurance companies, though they can also be handled by trust companies, lenders, attorneys, or licensed real estate brokers. The escrow agent follows the instructions outlined in the Purchase Contract and works with the buyer, seller, real estate agents, mortgage lender, and insurance companies to make sure everything is carried out according to Hawaii law.

How Long Does Escrow Take in Hawaii?

The typical escrow period in Hawaii depends on how the purchase is being financed:

• Cash purchases: Approximately 30 days (sometimes as fast as 7 to 14 days depending on title clearance)
• Financed purchases (with a mortgage): Approximately 45 days
• VA or FHA loans: May require extra time for appraisal and underwriting

The Escrow Timeline: A Day-by-Day Breakdown

Here's what a typical 45-day financed escrow looks like in Hawaii:

Day 0: Offer Accepted and Escrow Opens

Once both parties sign the Purchase Contract, escrow is officially opened with a neutral third-party escrow company. The buyer delivers earnest money within 3 business days (unless otherwise agreed). You'll receive your file number and the escrow team's contact information.

Days 1–14: Due Diligence and Inspection Period

This is the buyer's window to complete important steps:

• Schedule and complete the home inspection
• Order the termite inspection
• Notify your lender of the accepted offer and submit your loan application
• Review the seller's disclosure statement (typically received around Day 7)
• Escrow orders a preliminary title report (also around Day 7)
• Make any additional deposits per the contract

Days 15–30: Loan Processing and Document Review

During this phase, the transaction moves into deeper coordination:

• Return escrow paperwork, including choosing tenancy (how you want to hold title)
• Review condominium or subdivision documents if applicable (you typically have 10 days)
• The lender processes the appraisal and underwriting
• Negotiate any repairs or credits based on inspection findings
• Escrow coordinates with title insurance to clear any title issues

Days 31–40: Final Approvals and Preparation

The finish line is in sight:

• Loan receives final approval from the lender
• Termite report and clearance are submitted
• Escrow prepares the deed, closing statements, and transfer documents
• Closing statements show exact prorations for property taxes, HOA fees, and utilities
• Signing appointments are scheduled for both parties

Days 41–42: Final Walkthrough and Signing

The buyer completes a final walkthrough to verify the property is in the expected condition and that any agreed-upon repairs were made. Both parties sign loan paperwork and escrow documents. The buyer delivers the remaining down payment and closing costs via wire transfer or cashier's check from a Hawaii bank.

Important: Hawaii is a "good funds" state, meaning all money and documents must be ready at least 2 business days before the recording date.

Day 43–44: Documents Submitted for Recording

Escrow submits the deed and other documents to Hawaii's Bureau of Conveyances (or Land Court, depending on how the property is recorded). Hawaii uses two recording systems, and your escrow team will confirm which one applies to your property.

Day 45: Closing and Recording

On the morning of the closing date, escrow is notified that the documents have been recorded. At that point:

• Escrow releases funds to the seller
• The deed is officially recorded
• Ownership is transferred
• Keys are handed over to the new owner

What Does Escrow Handle?

The escrow agent is the central coordinator of the entire transaction. Here's what they manage:

• Holding deposits: Your earnest money is held safely in escrow until closing
• Coordinating documents: Between buyers, sellers, agents, lenders, and title companies
• Preparing closing statements: Detailing who pays what and who receives what
• Managing payoffs: Including the seller's existing mortgage and any liens
• Recording the deed: Filing with the Bureau of Conveyances or Land Court
• Disbursing funds: Paying agents, lenders, and delivering seller proceeds

Tips for a Smooth Escrow in Hawaii

• Respond quickly: Delays in returning paperwork or scheduling inspections can push your closing date
• Get your funds ready early: Remember the 2-day good funds requirement
• Stay in communication: Your agent and escrow officer are your best resources for tracking milestones
• Don't make major financial changes: Avoid opening new credit accounts or making large purchases during escrow
• Know the difference between signing and closing: In Hawaii, signing typically happens 4 to 7 days before closing day

What Makes Hawaii's Escrow Process Unique?

Two recording systems: Hawaii uses both the Bureau of Conveyances and the Land Court. Your escrow team handles the correct filing, but it's good to be aware that procedures differ slightly between the two.

Good funds state: All funds must be deposited and cleared at least 2 business days before the recording date. This is a critical deadline that catches some buyers off guard.

Signing vs. closing: Many people confuse the two, but in Hawaii, you sign documents several days before the actual closing (recording) date.

Have Questions About the Escrow Process?

Whether you're a first-time buyer or a seasoned seller, navigating escrow in Hawaii doesn't have to be stressful. Our team walks clients through every step of the process, from opening escrow to handing over the keys.

Contact Kristy & Austin Nakamura to learn more about buying or selling a home on Oahu. We'll make sure you know exactly what to expect at every stage.