What do I do first to list my home?
（Please relax! We will guide you through the process.）
Selection of a Listing Broker/Agent
In Hawaii, majority of home sellers enter an exclusive right to sell listing agreement with one real estate broker. Unless you are doing For-Sale-By-Owner, It is highly recommended to select a real estate broker/agent with rich experiences and knowledge of the local real estate marketing and sales. Discuss with your prospect agent the situation you are in, your ideal time frame, moving options, etc. Seek for professional advice on pricing.
Verify Your Title to the Property
Your experienced agent can obtain a preliminary title reprt from an escrow company at no cost to you. It shows who is (are) the legal owner(s) of the subject property and also the type of ownership (called "tenancy"). You should review this document carefully to see if any third party has interests in your property. Has there been an encroachment agreement with your neighber (if single family home)in the past? Has anyone on the title passed on and his/her name is still on the title?
We can advise you what needs to be done and guide you through the process
Tax Identification Numbers
If you are non-resident alien or out-of-state property owner, there will be tax withholding at closing of the sale.
For non-resident-aliens, 10% to 15% of the sales price, and for US citizens or resident aliens who reside out of the State of Hawaii, 5% of the sales price will be withheld from the escrow account.
Surveys (For Single Family Homes)
Do you know who owns the rock wall between your home and your neighbor's home? Is it within the boundary? If your property hasn't been surveyed for long time, then it is a good idea to have the survey done before selling or as early as possible after you enter a purchase contract. If the survey reveals any encroachment, then you would have to ask your neighbor to sign an encroachment agreement prepared by an attorney. If you are not in good terms with your neighbor or in case of absentee owner, it can take time.
Talk with your agent well and see by approximately how much it would be reflected on the price if you consider renovating or do some major repairs. You could sell in its "AS IS" condition but how about the price? How soon do you need to sell? How is the market in your area? We can give you suggestions by taking all the possible factors into consideration before you decide what to do.
Prepare Seller's Disclosure
Let's pretend that you are purchasing a home. What do you want to know or ask the seller if you were a buyer?
Your agent will provide a form (5 pages) called Seller's Real Property Disclosure Statement to fill out. You will be filling out the form based on your knowledge about your property. Don't try to hide anything like material facts that would affect the value of the property.
Real Estate agents are not tax experts and we are not the one to be advising you on your tax matters.
Please consult your CPA on capital gain taxes or 1031 Exchange, etc.
Where are you relocating?
If you are selling your home where you are currently living, do you have a place to move to? Are you purchasing a new place? Are you planning to do a simultaneous closings? Or are you imposing a contingency of seller finding a replacement property? Which option would work for you?
Pricing of your home
Please keep this in mind. If the buyer of your home is financing, then there will be an appraisal. Appraisals are done based on the recent sales in your neighborhood and also based on the comparison of the similar properties.
Home buyers nowadays are savvy with online tools and familiar with the prices of sold listings in your neighborhood. It is a good idea for you to visit Open Houses in your neighborhood to check out your competitors, too.
First impression really counts when it comes to home hunting. De-clutter, organize, and coordinate the color scheme to make the home look spacious. We help you with staging.
We advertise on Multiple Listing System by Honolulu Board of Realtors and conduct Sunday Open House and Brokers Open House as well as advertise on our website. Other options are direct e-mail flyers to active agents or approach to our clients data base.
Sunday Open House is open to public and advertised on local newspapers. Brokers Open House is conducted on either Wednesday or Thursday (depending on the area) and also open to public but not advertised on newspapers.
Receiving Offer(s) ➡Negotiation➡Meeting of minds➡Contract➡Open Escrow
How long does it take to close?
Once all the terms are met and Purchase Contract is fully executed, then Buyer's earnest money is deposited into Escrow account. From the Acceptance Date, it usually takes around 45 days to 60 days if Buyer is financing. If Buyer is paying all in cash, then it takes around 30 days or less, but it all depends on schedules of both sides.
We've got an offer!! Then what do we do now?
Once we receive an offer to purchase your home from a prospect buyer, then there are the following options for you.
1) If you like what they are offering and agree with all the terms offered, then accept the offer by checking
"Acceptance" on the last page, sign and initial all the pages.
2) If you want to negotiate on some of the terms, then counter. There is a form called "Counter Offer".
We fill out the form for you, have you sign, and we will submit to the other party.
3) If what they are offering is too far apart from what you are asking, then reject it.
If you received multiple offers, then you can select the best one based on not only the price but other terms as well.
We have a contract!
Once we have a meeting of the minds, then we will open an escrow account.
A fully executed copy of the purchase contract including the final counter offer with acceptance signature(s) are submitted to an escrow company agreed upon by both parties. Buyer's agent will deposit the buyer's initial deposit check with the escrow.
Escrow will assign an escrow number for the new account.
Escrow (its title department or a separate but affiliated title company) will provide both parties with a document called "Preliminary Title Report" the written report of the title to the property, including a property description, names of titleholders and how title is held (joint tenancy, etc.), tax rate, encumbrances (mortgages, liens, deeds of trusts, recorded judgments), and real property taxes due. A title report made when report is ordered is called a "preliminary report," or a "prelim," and at time of recording an up-to-date report is issued which is the final title report. Normally a title report's accuracy is insured by title insurance which will require the insurance company to either correct any error or pay damages resulting from a "cloud on title," encumbrances or title flaw in the title which was not reported. In general, Seller pays 60% and Buyer pays 40% of the title insurance premium upon closing.
Seller's Real Property Disclosure Statement
By law, a seller of residential real property is obligated to fully and accurately disclose in writing to a buyer all "material facts" concerning the property. "Material facts" are defined as "any fact, defect, or condition, past or present, that would be expected to measurably affect the value to a reasonable person of the residential real property being offered for sale." Seller has a certain time frame per the Purchase Contract to submit the Seller's Real Property Disclosure Statement to Buyer and Buyer has a certain time frame per the Contract to review the statement and has the right to cancel the Purchase Contract based on the findings from the statement.
Buyer has the right to have the subject property inspected by third parties. The due date for completion of the inspection and reviewing the result (inspection report) is negotiated between the parties. It is usually done within the first two weeks of the transaction. If there are items requiring repairs or replacing, both parties negotiate on what to do unless an "As Is" Addendum is in place and Seller doesn't want to fix or replace anything. Oftentimes, however, parties still try to negotiate if both parties want to keep the transaction alive.
If your property is a condominium unit, then you would have to provide your buyer with series of documents we call "condominium documents" within a certain time frame per the purchase contract as part of your property disclosure. (We, if you hire us as your listing agent, take care of it on your behalf.) Buyer has a certain time frame to review the documents and responds to Seller whether she/he will proceed withe sales transaction. The condominium documents include, but not limited to, declaration, articles of incorporation, by-laws and their amendments, house rules, insurance study, operating budget, reserve study, minutes of annual meetings and board meeting, etc. Evan if your home is a single family home, if there is a homeowners' association, you have to obtain such documents and submit to your buyer. A certain properties belong to multiple associations.
Leasehold Disclosure Documents
If your property is a leasehold property, then you have to provide your buyer with master lease, apartment lease, and any other related documents (if any) within a certain time frame per the purchase contract.
A termite inspection is ordered close to the end of the transaction. Termite inspection report is good for only 15 days. If the purchase contract requires, then you will have to order an inspection to be conducted by a company designated by your buyer around 15 days prior to closing. Even at condominium properties, termites can be feasting on your doors, kitchen cabinets, etc. Usually, termite treatment for a condominium unit is done by a spot treatment, but there is a precedence where an entire high rise building was tented for fumigation, which was a very unusual case. For a single family home, if the termite inspection report states a fumigation is required for an active termite infestation, Seller has to have the house tended for a fumigation (usually it takes 24 hours) before closing of the sales transaction. If you live there, it can be very stressful to pack up and relocate before selling the place, so if you see any sign of termites or if you feel suspicious, then have your home inspected and do any appropriate treatment before listing your home for sale.
If your buyer is financing to purchase your home, you as a seller should be aware that there will be an appraisal.
An appraiser is assigned to the lender that is financing the purchase. If your sales price is above its market value, then the appraised value could come out short and that can be a deal killer if Buyer can't come up with the difference. If most of the conditions are satisfied, then a conditional commitment letter will be issued with some conditions. If all the conditions are met, then a final loan approval will be issued and finally the funding will take place after signing loan documents and payment of the down payment by the buyer.
Moving and Cleaning, and Closing your Utility Accounts
Don't wait until the last minute to make a moving arrangement. The property must be vacated and cleaned by a certain date per the purchase contract and prior to a final walk through by Buyer. Also, you are expected to discontinue utility services. Don't turn off the water and electricity yet, however, until the cleaning is done and then the final walk through is done. Don't forget to cancel your homeowner's, dwelling & fire, hurricane, and or flood insurances, too, as of the recordation day. You may get refund for a portion of the premiums you paid.
Signing (Signing in front of a notary public)
If and when most of all the conditions are met, the closing documents including the conveyance document are prepared. Both Buyer and Seller must sign the conveyance documents and loan documents (Buyer only except for a certain document requiring Seller to sign) and get the documents notarized by US certified notary public.
This signing can be done outside the US at an American Embassy or a Consulate. (for Apostiile, please contact us)
Recordation and Sales Proceeds
Recordation takes place after two days after all the executed contract documents and all the funds from Buyer are
in Escrow's hand. Escrow submits the conveyance documents to the Bureau of Conveyance and/or Land Court for recordation and then disburse the funds to individual parties. Seller receives the sales proceeds on the same day unless you requested Escrow to wire the funds to any oversea bank account or mail the check.
FiRPTA and HARPTA
HARPTA is an acronym for "Hawaii Real Property Tax Act"and FIRPTA is an acronym for "Foreign Investment in Real Property Tax Act". For legal explanation of these Acts, please go to http://files.hawaii.gov/dcca/reb/real_ed/re_ed/ce_prelic/harpta_firpta_handout_-_final.pdf
On behalf of Buyers, Escrow withholds a certain percentage of the "amount realized" on sale, which is normally 10% to 15% (depending on the value of the property and the owner occupant status) of the sales price for FIRPTA and 5% for HARPTA unless Seller provides with Buyer a certification that Seller is exempt from the withholding in certain period of time. Please consult your CPA for the details.