Once you’ve finally decided to sell your Hawaii home, the next step is deciding how to sell. When making this decision, it’s important that you understand all of the costs involved if choosing to sell with an agent, some of which the agent may not be able to provide. We will outline 5 costs homeowners face when selling with a Hawaii real estate agent….
Commission
Real estate agent commissions are among the highest of the costs homeowners face when selling with a Hawaii real estate agent. This is true in any market in America, but significantly more so in Hawaii’s high priced housing market where prices can easily exceed $800,000! These commissions are based on a percentage of the final sale price of your house (or townhouse, condo, vacant land, etc). Typically, you will find the commission of 2.5-3% per side (seller and buyer), so if you sell your house for $800,000, you would have to pay $48,000 out of your gross proceeds in commissions alone, along with the traditional seller’s closing fees (title, conveyance tax, escrow, etc) that will eat away at your net proceeds.
Other Professional Fees
Professional appraisers and home inspector fees are also among the traditional costs homeowners may face when selling with a Hawaii real estate agent. When you sell your house with a real estate agent, the first step in the approval of a mortgage is the property appraising for enough to meet the terms of the loan the buyers have qualified for and offered. Additionally, the buyer’s agent will almost always order an inspection of the property. While the buyers will often pay for the inspection itself, a litany of items may come back to bite you (see the next paragraph). There may also be fees for the closing agent handling the transaction, in addition to the closing costs you are already responsible for – termite report, fumigation/treatment, survey, and others.
Repairs
Depending on the age of your home and the amount of deferred maintenance, you may want to even pay for your own home inspection so you can get a headstart on items a retail buyer is likely to request that your repair…on your dime. By being prepared, you can understand just what you may be facing in terms of a traditional real estate transaction if it’s going to hit you in the wallet. If the inspector should find something wrong with the property structure or other issues with the property that need repairs, the buyers may require you to fix it prior to closing the sale. The potential costs can run into the tens of thousands and become yet another expense homeowners face when selling with a Hawaii real estate agent, possibly even more than the commission you’ll pay to the real estate agent. This is, obviously, more of an issue for some homes than others, but it can quickly add up.
Advertising
Advertising can be a rather expensive cost homeowners may face when selling with a Hawaii real estate agent. Listings typically include high-quality professional photography so that the listing stands out among the competitors on the top internet pages for home searches, including the MLS. When working with top producing agents, you can expect staging to be another item you will be responsible for – this easily cost a few thousand dollars if done properly. Be certain you carefully review this section of the listing agreement with the agent and ask questions about anything that isn’t set with specific limits or isn’t clear to you. Their version of updating the property and what you have agreed to perform in order to meet their standards, with an unlimited budget, may not meet the realities of your checkbook. Ask them to explain any differences of opinion.
Holding
Holding onto one property when circumstances force you to move into another means that you will be responsible to carry the expenses for both for an unknown period of time. Many sellers find their home is just sitting on the market while they sink under their bills month after month after month. Sadly, while real estate agents are busy laying out all the plans to sell your home, the one thing they cannot guarantee is that your property will sell – unless they are planning to buy it themselves. This can lead to your home lingering on the MLS, which in itself becomes another cost homeowners face when selling with a Hawaii real estate agent — more insurance, property taxes, utilities, HOA, etc.
Additionally, traditional sales contracts usually include buyers meeting qualifications from banks, allowance for the mortgage underwriting time, and property inspection. Last but not least, your buyer may not end up qualifying in the end, leading to re-starting the marketing process only to have to find a new buyer from scratch. We’ve seen it happen multiple times on a per property basis.
Why spend a ton of your hard-earned money when there is no guarantee your property will actually be sold by an agent? Work with Oahu Home Buyers and avoid all of these expenses homeowners face when selling with a Hawaii real estate agent. By selling directly to Oahu Home Buyers, you won’t need to worry about commissions, broker fees, paying other professionals, repairs, or advertising! At Oahu Home Buyers we are happy to discuss these and other reasons why it is better to sell your house directly. Please send us a message or give us a call today at (808) 333-3677. We’re waiting to hear from you – aloha!