Selling Property in Hawaii: Tips & Insights
Hawaii is a beautiful vacation destination. It is also a popular place to make real estate investments. Hawaii, however, is a bit different than the other 48 states when it comes to real estate. Despite things like Covid-19 and the threat of a recession, the housing market is still doing fine. In fact, it’s very hot.
There are numerous factors to consider if you want to sell your house. When you enter the market, the following information will help you determine how to continue. One of the most crucial measures is to prepare your home to sell for top dollar.
The Significance of a Financial Plan
This is the initial and most crucial stage. Seek assistance from a reputable tax professional. They can assist you in understanding all of the financial implications of selling your house. What will you do with the sale proceeds? How do you raise the value of your home to a fair market value? These are the kinds of questions that a good advisor should be able to answer.
Price will always be at the top of the list. People want to know how much it will cost up front. Will there be any broker’s fees, taxes, or other commissions? The most likely answer is yes.
Although there is no standard brokerage fee, sellers should anticipate to pay a commission ranging from 5-6%. The proceeds will be shared between the listing and buying agents.
It should be noted that unless an exemption is applied, Hawaii imposes a conveyance tax. The amount varies and is based on the value of the property.
There is also the subject of title insurance in the state of Hawaii. This insurance covers any issues in the property. The price is split between the seller and the buyer.
Escrow fees differ as well. They can cost anywhere between $900 and $1,500. However, the entire cost of the home is the deciding factor. A termite inspection must also be paid for by the seller. This can also amount to a few hundred dollars.
Utilize the 1031 Exchange
Under this current tax law, you can upgrade your property to earn money. Take the investment property and convert it into a new investment. As long as you move the money you’ve earned from the sale into the property, you won’t have to pay capital gains tax.
How to Determine the Value of Your Home
While many sellers believe that raising the price of their home to get the fastest sale is a good idea, this is not the case. Even in the most enticing real estate market, buyers must exercise caution and evaluate a variety of factors. You must be well-versed in all aspects of home selling. Trying to be slick while selling your home may backfire on you.
You could make the mistake of setting your property’s price so high that it sits for a lengthy time. It might never sell at all. Setting the right price for your home will make it far more appealing to potential buyers. Hiring someone to appraise the property is the best way to receive the right property value. They will inspect your home from the inside and outside. They will consider the condition of your home, the market, and other factors that may influence its value.
It is best to hire multiple assessors. Unfortunately, history has shown that not all assessors are trustworthy and impartial. Do your due diligence. This will save you time and hassles in the long run. Some websites may also provide you with a free market analysis. It removes the human aspect from the equation. You can type in the information and discover anything you need. The conventional thinking would be to use both.
Seller Disclosure Statement
This is also an essential aspect of the real estate transaction. This factual statement contains everything that needs to be understood regarding the property’s condition. This contains items that may reduce the home’s value. Everything must be made public. People have gotten into tremendous trouble for purposely leaving out information that a potential buyer needs. Falsifying or omitting important information on a seller disclosure statement is a crime. The penalty can be severe.
Keep in mind that even if a property is being sold “As Is,” this does not exclude them from putting the proper information on the disclosure statement.
Getting Your Home Ready to Sell
When you are preparing your property for sale, it is a good idea to hire an inspector. While the buyer usually does this, it wouldn’t hurt if you did it on your own. This way, you will know everything inside and outside of your home that needs to be repaired or replaced. An inspection can uncover a lot of hidden details. This will also keep you from being sued. If a person buys a house and major fixes are uncovered, you will be held liable.
Another key consideration is keeping the place tidy. No one is suggesting that you scrub the house from floor to ceiling, but you should keep it clean and presentable. If the house has been sitting for a while, dust and filth will accumulate. You can do it yourself if it’s not too severe. You can pay someone to sweep, mop, clean the windows, vacuum, or even touch up the paint if it’s a huge job.
Don’t forget about the landscape. Yards with uncut grass and an unsightly appearance typically turn people off. Hire a landscaper to clean up the yard. This includes picking up any rubbish on the curb. Don’t go insane. Only the essential enhancements will suffice. You should not spend any money unless it is required by the inspection results. Let that be the buyer’s responsibility. Once you’ve fulfilled your role as a seller, the rest is up to them.
This is another important thing to consider when sealing the deal. The average escrow length is about 45 days. Unfortunately, there are times when issues arise with the title and other paperwork that can cause delays. In most cases, transactions go through without a hitch. As long as you are receiving good advice and have everything in order, you should be fine.
If you are interested in selling real estate in Hawaii, contact me today. The real estate market is very complex. And in certain states, like Hawaii, there are some different laws that must be followed. If you follow the advice and utilize a sound plan, you will likely be on the upside for a very profitable deal.