Are you attempting to sell your Hawaii home but unsure where to begin? I’m going to outline a few possibilities for selling your home (or condo, townhouse, multi-family unit, etc.) in this article, regardless of whether you want a rapid sale or top dollar, are facing foreclosure or have a ton of equity. You alone will choose the best course of action, so sit back and let’s get started!
There is no denying that the real estate market in Hawaii runs at a different price point than the majority of American markets. Although there are disparities within and among the islands—Oahu, Maui, Kauai, Big Island—real estate in Hawaii is often pricey relative to the rest of the nation. Understanding the local market and your options for selling your house are crucial for a variety of reasons, including this one.
Option 1: Have a realtor list your home
The majority of people who are selling their homes are familiar with this option. Despite what some people may tell you, it is not—I repeat, it is not—the only way to sell your house. Although it is completely acceptable to sell your home on your own, the majority of individuals choose to work with real estate agents in Hawaii who are duly licensed.
Advantages: If you’re not up to speed on the local market, a professional agent will be. Waikiki condo pricing in recent years? How have Kihei’s townhouses been affected by the rise of Chinese tourism? Should you purchase in Poipu or Kapaa? Insight into the market should be available from your agent on these issues. Additionally, they should be aware of any regional laws and ordinances that apply specifically to Hawaii, such as the distinctions between Oahu and Kauai’s beach setback requirements and the legitimacy of erosion control structures. A coastal state must take additional factors into account. The majority, if not all, of the paperwork, filings, open houses, and other tasks that prevent a close will also be handled by a realtor.
Cons: You will typically pay 6% in commission fees if you utilize an agent to list your home. In some areas, that might not be a significant concern, but in Hawaii, it might easily cost $30,000 or more for a single-family home. Additionally, you and your agent can have different perspectives on the listed price and the timing of price reductions. What action will you take if opinions diverge? Since our laws and regulations differ from those on the mainland, you should also work with an agent that is familiar with how foreclosures are handled locally if your home is in foreclosure. Hawaii has no shortage of overleveraged mortgages, which is problematic given that many realtors are unaware of how to handle a short sale.
Bottom Line: Using an agent to sell your home is probably your best option if you have the money and don’t mind waiting for the highest retail price. If you require a local recommendation, ask me for one.
Option #2: Putting your home up for sale by yourself
In recent years, people have started to favor this choice a lot. Home sellers from Honolulu to Kehaka now choose to use the “For Sale By Owner” or “FSBO” strategy. Do you possess the skills?
Save that 6%, good. Going it alone is most likely motivated by the desire to avoid paying a commission and keep more of their money. That’s a significant sum of money in Hawaii, where houses can easily sell for more than $500,000. Controlling who and when you display your residence could be another factor. Your open house schedule will be decided by you and you alone. Are you up for some Sunday surfing? Tell the buyers to come in on Saturday morning if you want to go ahead with it. It’s up to you. Last but not least, for $300 or less you can increase exposure by listing your own property on the MLS.
Cons: Do you have the necessary paperwork? Do you understand how to interpret typical real estate agents in Hawaii purchase agreements? If not, get a friend who does as soon as possible. You run the danger of settling for less money or a longer sale term than you had planned if you don’t comprehend the dynamics of your local market. Last but not least, a lot of do-it-yourself house sellers lack the agent’s marketing potential. A certified Hawaii agent or a seasoned investor will be needed to assist you if you need a short sale, so forget about going it alone.
Conclusion: FSBOs are common in this area. On the weekends, drive about Honolulu and keep an eye out for “For Sale By Owner” signs on the lawn. You’ll have more responsibility if you sell your home yourself, but you’ll also make more money when it sells. That’s a lot of money when it comes down to it, especially in Hawaii where the stakes are higher. Don’t cut corners on the attorney, though, as it’s unlikely that you deal with contracts on a daily basis.
Option #3: Immediately Selling Your Home to an Investor
Many people also have the choice to forgo all marketing altogether. Short searches on Google or a quick look through Craigslist may turn up Hawaii real estate investment firms that make direct home purchases. Let’s examine the benefits and drawbacks of this approach:
Advantages: You can sell your home immediately and save that 6% exactly like you would if you were selling it yourself. Again, substantial savings in the state of Hawaii. Since they use readily available private investor capital rather than relying on a drawn-out bank appraisal procedure, many investors can also acquire your house in 30 days or less.
Therefore, a speedy sale to an investor can be your best option if you’re in a difficult circumstance where you urgently need cash or need to escape from onerous mortgage payments. An investor can be your best friend if you’re trying to avoid foreclosure because they can act as both the buyer and the processor of your short sale, saving you from having to watch your home sit vacant on your local island MLS while potential buyers pass it up in favor of a home they know they can purchase without the involvement of the bank.
There are numerous real estate investors in Hawaii, but you should make sure to work with one who is qualified and can truly close on your home. Many of these investors are just flashy business cards.
Cons: If you sell your home to an investor, you probably won’t get the full asking amount. Since investors typically have a profit motivation, they require a large amount of upfront equity (instead of moving in). Therefore, go for it if you’re willing to accept a discount and have considerations other than price. This is not the best course of action, though, if you can wait six months or longer for that top offer on that Diamond Head beachfront home.
To boost your net, you might be able to arrange some seller financing in addition to the commission savings. However, if you’re facing bankruptcy, divorce, or probate, you might prefer to accept less money knowing that your deal will close and you can continue on to happier times in the future.
Conclusion: An investor can be your best alternative if you need a speedy solution to sell your house in Hawaii. In addition to avoiding agency fees, a problem property will close quickly for you. You won’t receive market value with this choice, though. This is for people who require assistance.
As you can see, your optimal course of action will largely depend on your current financial, logistical, and environmental situations. There are actual people living in Hawaii as well as surf, sun, and sand. These people have real families and genuine lives. People in this area manage their money and mortgages similarly to people on the mainland. While some homeowners in communities like Ewa Beach, Kihei, and Hilo have no mortgages at all, others struggle to make even minimum payments. Over the past five years, the Hawaii real estate market has undoubtedly changed, with the outer islands experiencing the most change. Your best course of action for you and your family will depend on how well you understand your neighborhood, your reasons for selling, and your needs. Aloha.
In Aloha State, Big Rock Investments, LLC offers real estate solutions and investments. Right here on the islands, we buy, sell, renovate, and wholesale residential property. We specialize in assisting those who are having real estate issues, whether they need to halt the foreclosure process on their Hawaii home or swiftly sell a distressed property for cash. In order to create equity-driven Hawaii real estate investment opportunities, we also place these homes back on the market, either completely renovated or in their current shape, at discounted market pricing. Aside from that, we also provide a very alluring private mortgage financing program where your money works hard for you, earning a very fixed high-interest rate with the security of a recorded private mortgage.