WORK WITH A
REAL ESTATE PROFESSIONAL

Choosing a Broker to represent you during the sale of your home is one of the most important decisions you will make. An experienced agent who is knowledgeable about the selling process will guide you through to a smooth closing and will help you avoid mistakes along the way or resolve any issues that may complicate or in the worst case, cause the transaction to fall apart.

When choosing a Broker, it is important to choose one with experience and one that fits with your morals and principles. You also want to make sure that you can get along with the Broker as you will be dealing with the Broker a lot during the sale of your home.

Make sure that the Broker provides you with proper comparisons of your home so that you have a good understanding of what your home is worth.

DECIDING ON A LISTING PRICE

Your Broker will go over with you all of the data on recent active listings, pending sales, and closed escrows when choosing an asking price. Choosing a price that is too high with the idea that "we can always come down" is usually a mistake. A new listing receives the highest percentage of activity during the first two to three weeks on the market. A home that is reduced after that time period is unlikely to regain any of that lost exposure. Pricing a property within 2 to 3 percent of the estimated value is usually a better plan for getting top dollar and is the most effective way to attract serious buyers.

REAL ESTATE COMMISSIONS

Real estate agents work on commission, not salary, and get paid only after your home is sold and escrow closes. Under the typical arrangement, the seller pays the commission to the real estate broker’s office. Most sellers pay 5% to 7% of the sales price.

Because most real estate transactions involve two brokers -- one that produces the buyer and one that helps the seller -- the commission is divided, usually 50-50, between the two brokerage companies. Your broker will then receive a percentage of what the brokerage company receives.

CLOSING COSTS

Typically, the escrow and closing costs are about .5% to 1% of the purchase price. Most commonly you will also need to pay for stacking and surveying of your property, if it is a single family dwelling, and a termite inspection. Also, please be aware of HARPTA and FIRPTA withholdings if you do not reside in the State of Hawaii. Please read below.

HARPTA & FIRPTA

HARPTA (Hawaii Real Property Tax Act) and FIRPTA (Foreign Investment in Real Property Tax) relate to tax payments due from sellers who are not residents of Hawaii or of the United States.
HARPTA requires every buyer of Hawaii real property to deduct and withhold from the non-resident seller's proceeds, 5% of the gross amount realized on the sale to be applied to any Hawaii income tax due from the seller with regards to the sale of the property.

A buyer would be exempted from this requirement if the seller furnishes the buyer with an affidavit stating that the seller is a resident (includes resident aliens), together with his taxpayer’s identification number. There are a few exceptions to the rule. Out-Of-State Corporations registered to do business in Hawaii are exempt from HARPTA and sellers doing an IRC 1031 Tax Deferred Exchange are exempt from HARPTA. Sellers who lived in the property (as principal residence) for the year preceding the sale and realize $300,000 or less on the sale of their home are exempt from HARPTA.

FIRPTA is an Internal Revenue Service withholding tax applicableto foreign sellers in a real estate transaction. Like HARPTA, the Buyer (Transferee) is responsible for withholding. However, in this case the withholding is equal to 10% of the gross sale price. The Escrow Company must send the withheld funds to the IRS within twenty days of recordation.

Just like HARPTA, a Seller may apply for an exemption from FIRPTA prior to recordation. We have seen Sellers pay HARPTA and FIRPTA in the same transaction.

Because of the strict deadlines and penalties associated with these laws, your agent and your escrow company will make sure you are fully compliant.

PREPARING YOUR HOME
FOR THE MARKET

Staging your property before showing is very important. Your Broker is experienced in knowing what will make your home more “sellable.” Ask your Broker for recommendations and ideas. The main thing is that you want potential buyers to be able to envision themselves in your home and if you have a lot of personal pictures or nick-knacks or clutter, it makes that difficult. Please keep in mind that prospective buyers want to see the garage, the yard and even inside the closets.

PROVIDING ACCESS
TO THE PROPERTY

Letting the world know that a property is for sale is the main thrust behind marketing a property. Most real estate agents incorporate several different marketing ideas, in an effort to broaden the scope of exposure to as many potential buyers as possible. Some of the main marketing ideas are as follows:

• MULTIPLE LISTINGS SERVICE
• WORLD WIDE WEB
• FOR SALE SIGN
• BROCHURE BOX
• PROPERTY BROCHURES
• OFFICE CARAVANS
• BROKER'S OPEN HOUSES
• DISTRIBUTING FLYERS
• ADVERTISING IN CLASSIFIED ADS AND TRADE PUBLICATIONS
• PUBLIC OPEN HOUSES

ESCROW TIMELINE

Once you have a signed contract and the buyer and seller have agreed upon price, and all other terms, an escrow account is opened and the buyer’s initial deposit is given to the escrow company. There will be a timeline for all parties to follow. It is the job of the escrow company and real estate brokers to make sure that the timeline is followed in accordance with the contract. Escrows in Hawaii generally take 6 weeks. Usually before the date of closing, the seller must vacate the premises and the new owner has complete ownership as of the closing date.

IF YOU HAVE ANY QUESTIONS OR CONCERNS, COMMUNICATE THEM TO YOUR BROKER!!!!


It is usually best that the buyers and sellers refrain from communicating with each without their brokers. There are a lot of guidelines we need to follow during the escrow period and all changes to the contract must be in writing and agreed to by all parties.