Often people think of selling their home as a long and expensive process. It can be even more overwhelming if the property has been ignored or needs repair. But it doesn’t have to be like that! In this article we discuss how to sell your Maui house without any of the hassles!
When selling a house in Maui, most people immediately think about calling a realtor and listing the property on the MLS. This is a great solution for many people, however, it is not the best option for everyone and you should know there are other options available to you. We strongly recommend considering all options before committing to someone to sell your house with. It’s common that one of the options has clear advantages, and can put more cash in your pocket and have your Hawaii house sold fast. It really just depends on your unique circumstance and the specifications of the house or condo you want to sell. Of course, there are multiple ways of selling a Maui house. Consider all of the options to determine which selling method is best for you.
Sell Directly to A Professional Home Buyer
You can sell your house without real estate agent, ultimately saving a ton of time and money in many situations. Companies such as Maui Home Buyers provide the offer to buy your Maui house using a clear and simple process. With a direct cash home buyer you won’t have to worry about commission, repairs, cleaning-up or waiting for a buyer to show up. You will immediately know the amount you are receiving as well as the closing date so you aren’t left hanging, wondering when your house will sell and how much you’ll actually end up getting. We pay all cash, so we are not at the mercy of a real estate appraiser’s opinion of the homes value (more and more retail sales have been falling apart because the licensed appraisers think that the houses are selling for more than they’re actually worth).
Direct sales are becoming increasingly popular, however, not all buyers are the same. We are certainly not a one sized fits all, and many sellers are better off listing on MLS. You should do some research on your current local market conditions and the buyer you are working with. A direct sale may not offer full price, but for some people, the amount saved on repairs, commissions, and wasted time more than makes up for the difference in price. Especially since realtor commissions in Hawaii usually end up being around $50,000!
List Your Home With An Experienced Real Estate Agent
Of course, listing your Maui house is a viable option. Just be sure that you understand everything that is involved and what will be expected of you. No two agents work exactly the same and there are no guarantees that your house will sell.
If a realtor promises that they’ll sell your house in Hawaii for a certain amount then it’s probably a good idea to find someone else. That’s a common strategy, especially for less experienced realtors that are more desperate to earn commissions. We call it “buying the listing”, where a realtor might tell the seller they will sell your Hawaii house for 800k, even though the highest similar sales in your island neighborhood might only be 725k. If that’s that case, you should know that the realtor does not have some special power or some secret buyer that no one else knows about; they’re just willing to say whatever it takes to get you to sign. Remember, once you sign a listing agreement, the realtor can often force you to pay their commission even if they don’t do any work and you find your own buyer (so take your time and consider their offer, compare it to others, and sleep on it before you sign a purchase contract or a Hawaii Association of Realtors exclusive right to sell listing agreement, which gives them the exclusive right to sell and collect commissions from selling your house in Hawaii). In a super hot market, like 2021, that strategy worked because prices went up so fast. But not that we’re back to normal the realtor ends up telling the seller that no one seems to be jumping on it after a couple weeks, and they need to lower their price if they really want it to sell. Please know that we are not bad mouthing realtors, in fact 2 out of 3 of us are licensed Realtors, and we work with realtors all the time and many of our friends make a living that way. We just want to be honest with you so that you know some of the questionable tactics that some less ethical realtors have been known to use, so if you catch someone using this tactic on you, you know what you need to do.
You can list your home for sale at any price you want, but there’s not way to know if you will receive it. As we explained before, be very careful of realtors that try to get you excited with a high asking price. If it’s priced too high, it will probably not sell because no buyer will jump on it, they’ll just choose the better deal down the street. That will cause your house to sit on the market and become a “stale listing”, which means it’s been listed for more than a month or two, and no ones looking at it anymore because even if you drop the price, buyers have already seen the house and written it off as overpriced. You will inevitably have to lower the price, and usually end up selling for much less than you could have because you have to convince the buyers to change their mind about this house. If you decide to list, make sure your realtor prices your home to sell quickly.
Offer Seller Financing
This option is very interesting for those who don’t need all of the cash from the sale of their home immediately. You can choose to “carry the note”, which means you act as the bank. The buyer typically will make a down payment, which the buyer and seller will negotiate terms they both find acceptable. The escrow and title company will prepare all of the documents, so the buyer is legally responsible to pay you back, or they will be foreclosed, just like if they had gotten a mortgage from the bank. And the buyer will make monthly payments to you, again, this will be an amount and over a length of time that you both agree on. Maybe it’s $1,000/mo for 1 year, maybe it’s $10,000/mo for 25 years – it’s all up to the two to decide what they want for their situation.
Alternative you can try rent to own. This is when your tenant wants to buy, but can’t for some reason. So they rent the property at a higher than average price, with some of the money going toward a down payment on the home. They will then have the option to buy the property outright at the end of a certain period of time, typically around 2 years.
Consider Other Options
If you need to move but are upside on your mortgage or have another reason why you just cannot sell your house there are other options. You can rent the house either short or long term – note that Hawaii has very strict rules about short term rentals, so make sure your properties is approved for STRs first. The fines can be very hefty! The biggest challenge with renting long term is usually finding great tenants that stay for more than a few months or a year. Hawaii is such a transient place, that most tenants seem to move on average every 6-10 months from our experience with rentals here, and tenant turnover is the single biggest expense we deal with as landlords. Turnover can lead to a rental that looks profitable on paper actually being a huge loss. If you’re not experienced screening and managing tenants we recommend that you hire a property manager that can handle that process for you. We’re happy to recommend some of the property managers we like and trust in Hawaii, just give us a call or text! The going rate for long term rental management is about 10% of the total monthly rent (so it your house rents for $3,000/mo the property manager will usually charge $300/mo, plus some other fees usually), and for short term rentals the going rate is about 25% of the total monthly rent that is collected.
We hope this article helps guide you in the process of how to make the best decision on how to sell your house in Hawaii!
Do you want to sell your house in Maui? Find out what we can do for you! Send us a message or give us a call today! (808) 359-3121
Check out our sister page for other islands: Hi Cash Buyer