Are you trying to sell your house in Hawaii but don’t know where to start? In this article, I’m going to show you a few different options you have for selling your house (or condo, townhouse, multi-family, etc.), whether you’re looking for a top of market retail value or a quick sale, whether you’re in pre fore closure or have oodles of equity. Of course, the right option will be determined by you alone, so buckle up, and let’s get right to it! Like Kihei condos for sale
It’s no secret that the Hawaii real estate market operates at a different price point than most markets in America. Oahu, Maui, Kaua, Big Island – of course, there are differences across and between the islands, but real estate is generally expensive compared to the rest of the country. For this reason (among many others), it’s critical to understand both the local market and your options for selling your property.
List Your House With A Realtor
There is an option most people selling their homes are familiar with it. It is not – I repeat, not – the only way to sell your house, no matter what some might tell you. It is perfectly legal to sell your home on your own. However, most people do enlist the services of a licensed real estate agent.
Pros:
A good agent will know your local market conditions if you aren’t up to speed. Trending prices of Waikiki condos? The effects of Chinese tourism increases on townhouses in Kihei? Whether Should you buy in Poipu or Kapaa? Your agent should have an industry insight into these questions. They should also know about local Hawaii-specific guidelines and regulations, such as the differences in shoreline setback regulations between Oahu and Kauai and the legalities of erosion control structures. Being a coastal state means extra considerations. A realtor will also handle most if not all of the paperwork, filings, open houses, and other activities that stand in the way of a closing.
Cons:
Listing your house with an agent will, in most cases, cost you 6% in commission fees. That might not be a big deal in some states, but in Hawaii, that can easily be $30,000 or more for a single-family house. You might also have differing opinions on the listing price and timeframe for price drops than your agent. What will you do when opinions differ? If your house is in foreclosure, you also need to have an agent who understands how the foreclosure is handled here – our laws and guidelines aren’t the same as on the mainland. Many realtors, unfortunately, don’t know how to handle a short sale, and Hawaii has no shortage of overleveraged mortgages.
Bottom Line: If you have the budget and don’t mind waiting for a top-of-the-line retail price, then using an agent to sell your house is likely the best bet. Ask me for a local referral if you need one.
Selling Your House Yourself On The Market
This option becomes quite popular in recent years. The “For Sale By Owner” or “FSBO” tactic has become the method of choice for home sellers from Honolulu to Kehaka. Do you have the chops?
Pros:
Save that 6%. Probably the most common reason for home sellers to go it alone is to save that commission and keep it in their pocket. As stated earlier, that’s a large chunk of change in Hawaii, where homes can quickly sell for over $500,000. Another reason might be controlling to whom and when you show your house. You and you alone will determine your open house schedule. Want to go surfing on Sunday? Go for it – tell the buyers to pop in on Saturday morning instead. It’s your call. Lastly, you can list your property on the MLS for $300 or less for added exposure.
Cons:
Are you ready for the paperwork? Do you know how to read a standard Hawaii real estate purchase contract? If not, you better get a friend who does. You also might not understand your local market conditions and risk settling for a lower price or more extended sale period than you intended. Lastly, many do-it-yourself home sellers don’t have the marketing reach that an agent can offer. Also, if you need a short sale, forget the FSBO – you’ll need a licensed Hawaii agent or a professional investor to help you along.
Bottom Line: FSBOs are popular here. Drive around Honolulu on weekends and look for the “For Sale By Owner” signs on the lawn – you’ll see them. Selling your house yourself puts more responsibility on your shoulders and puts more money in your pocket when the home sells. In Hawaii, where the stakes are more extensive, that’s a lot of cash when all’s said and done. Just don’t skimp on the lawyer since the odds are you don’t work with the contracts every day.
Selling Your House Quickly To An Investor
Another option for many folks is to not even bother with any marketing at all. A quick Google search or scan of Craigslist will reveal Hawaii real estate investment companies that buy houses directly. Let’s look at the pros and cons of this method:
Pros:
You can sell your house directly, saving that 6% just as you sell your home yourself. Once again, considerable savings in the Aloha State. Many investors can also buy your house in 30 days or less since they use available private investor capital instead of waiting on a lengthy bank appraisal process. So if you’re in a distressing situation where you need an influx of cash sooner than later, or you need to get out from under burdensome mortgage payments, a quick sale to an investor may be your best ticket. If you’re trying to avoid foreclosure, an investor can also be your best friend because they can not only help have your short sale processed but can be the buyer as well, saving you from watching your house sit unsold on your local island MLS while buyers pass over your short sale for a condo they know they can buy without bank intervention. Hawaii has many real estate investors but makes sure you work with a professional and can close on your property – many don’t have much heft beyond a fancy business card.
Cons:
You’re unlikely to get a retail price when selling your house to an investor. Investors, by and large, need a significant amount of upfront equity since they have a profit motive (instead of moving in). So if you’re ready to accept a discount and have more to think about than price, go for it. On the other hand, you can wait six months or longer for that top-of-market offer on that Diamond Head beachfront home, and this is not the way to go. Maybe you can work out some seller financing on top of the commission savings to increase your net. But if you’re in a bankruptcy, divorce, or probate scenario, you might want to take less money but know your deal is going to close and move on to better days ahead.
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