Frequently Asked Questions from Big Island sellers.
We normally estimate 45 and 60 days for closing but, frankly, there is no such thing as a "normal" escrow. Each property and each sale are unique. If there are time-consuming conditions to the contract, it will take that much longer to close and record the transaction. We recommend that you discuss this matter with your agent when you are considering offers to purchase, especially if "time is of the essence" and you must meet deadlines of your own outside of escrow, such as moving or purchasing another property.
In general, a property that is clean, well-maintained, and in good order is most attractive to a buyer and brings the best price. In some local markets, pre-listing repairs, inspections and staging have become the norm. Your agent will be able to tell you what buyers are looking for in your area and help you identify specific issues that should be taken care of before marketing begins.
In the meantime, there are some simple things you can do to help get a good price. Start by looking at your property through a buyer's eyes and you'll see what we mean: remove unnecessary furniture, eliminate clutter, get the landscaping in good shape, and re-paint where needed. This will make a prospective buyer's first impression a positive one.
If you are not able to take on major repairs prior to listing, be realistic. Expect to receive a somewhat lower price for the property and reflect that in your listing price. Some buyers look specifically for properties where they can invest "sweat equity" rather than paying top dollar so don't be discouraged if you can't do everything you'd like to bring the property to mint condition. Your buyer may be looking for exactly what you have to offer.
Surveys are a standard part of every real estate sale. They protect the buyer's interest by defining the exact position and size of the property he is buying and assuring him that there are no encroachments or boundary problems. The survey is conducted early so that, should problems arise, they can be resolved in a timely manner and not unnecessarily delay the close of escrow.
FIRPTA (Foreign Investment in Real Property Tax) and HARPTA (Hawaii Real Property Tax Act) relate to tax payments due from sellers who are not residents of the United States or of Hawaii, respectively.
FIRPTA "requires that if the seller is a foreign person, the buyer must withhold 10% of the amount realized by the seller to cover any seller tax liability. Residences below $300,000 that are going to be occupied by the buyer are exempt from this provision."
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 taxpayers identification number."
Because of the strict deadlines and penalties associated with these laws, your agent and your escrow company will make sure you are fully compliant.
*FIRPTA and HARPTA definitions from Vitousek et al, Principles and Practices of Hawaiian Real Estate, Honolulu, HI, 1995.
A good rule of thumb is 2% of the purchase price. The items usually paid by the buyer and by the seller are listed in the standard terms of the sales contract.
Additional items may be negotiated as special terms of the contract. Individual situations can differ substantially, depending upon variables such as the level of market activity, the condition of your property and your motivation to sell. Your agent will give you a fairly close estimate and will work to make sure you are paying a fair price for the services provided.
A well-designed marketing plan is essential for a successful real estate sale. When you list with Clark Realty, we leverage our established industry network to promote your listing and work closely with you to create a marketing plan that integrates traditional print, direct mail and email campaigns with an effective digital marketing strategy. Our goal is to get your listing in front of as many qualified buyers as possible and to showcase your property in the best possible light.
Clark Realty has an exceptionally qualified, dedicated and professional sales team whose primary focus is the successful sale of your property. If you have additional questions about placing your listing with a Clark Realty agent, please visit our List With Us page or contact one of our Big Island offices for more information.
That depends upon the kind of lease your tenants have. If they occupy the property under a fixed lease, the lease expires on the date specified, regardless of who owns the property. In other words, a fixed lease survives escrow and the buyer of your property must honor the terms of the lease until it expires. Clearly this is a fact that requires early and full disclosure to prospective buyers.
If your tenant is on a month-to-month lease, you are required by the Hawaii Landlord Tenant Code to give 45 days' notice to vacate. Once notice is given, the tenant may vacate at any time prior to the 45th day, without penalty. Therefore, you'll want to time your Notice to Vacate carefully or you may find yourself missing the rental income you had expected. This gets especially tricky when closing is delayed and the property is sitting vacant.
We recommend that, before you enter into a lease with a new tenant, you think carefully about your long-range plans for the property.
If you have specific questions about your property, we invite you to visit our Rentals website or contact our Property Management Division for more information.