FSBO is the abbreviation for “For Sale By Owner.” Term is used to identify property, homes, condo’s or land, which are sold by the owner without the representation or help from a real estate agent. Typically, owners advertise their properties by means of websites, classified ads, word of mouth, and other means.

We provide you the method to sell your home “For Sale By Owner” or FSBO on Hawaii, Kauai, Maui, Molokai or Oahu and save thousands!

A multiple listing service (MLS) is a service used by a group of real estate brokers. The MLS allows agents to see one another’s listings of properties for sale and syndicated to their websites for the public and potential buyers.

Savings: The obvious advantage is you’ll save a significant amount in Seller’s Agent Commission. This can add up to thousands in savings.
Sell without an agent and pay no commission.

Reach: Over 95% of home buyers today start their home search online. With platforms like ours and it’s easy to reach these buyers. Listed on MLS, it will be seen on every agents website, Zillow, Trulia, Realtor.com and hundreds of of others. This helps reach agents in addition to home buyers directly.

Options:Once you’ve signed with a traditional 6% agent you’re locking yourself into a contract, often for months. This severely limits your options even if the agent is incompetent. It is generally better to attempt to sell your home yourself before locking yourself into a contract with an bad agent.

We will insert your contact info in the private remarks section of the MLS listing. Buyer’s agents see these remarks and will contact you directly via phone or email. If the buyer or their agent contacts your Listing Agent, the agent will forward you their information so you can directly reach out to them

The majority of buyers are still represented by an agent, so it’s recommended that you offer the buyer’s agent commission to incentivize agents, and required on MLS, to bring you buyers and help sell your home faster. With For Sale By Owner, you’ve saved the seller’s agent commission, which would normally be between 2% to 3%.

In most cases, your listing will appear the same day or on the next business day. This is after you have submitted your listing information and answered any follow-up questions the we might have.

One to two days after you’ve submitted your listing information to us and answered any additional questions we might have, your listing will go live on the MLS, on agents websites and various portals like Zillow, Trulia, and Realtor.com.

Yes. Your MLS Flat Fee Listing will look exactly the same as any other agents listing. There is no way to tell how much you paid to get on the MLS. Regardless of whom you listed with or what you paid, your listing will look no different from any other listing in form and style. The listing commission is not shown. The listing brokers name and commission offered appears on the MLS. Our flat fee listing method gets your property on the same MLS used by your local REALTORS®. Your listing will appear the same as all other MLS property listings.

Fee Simple (aka Free Hold) is the most complete form of ownership and most common throughout the United States and the Hawaiian Islands. Fee Simple ownership includes the land and the buildings thereon. A Fee Simple condominium includes the actual condominium unit, and the proportionate interest in the land underneath plus the proportionate interest in the common and limited common elements of the project. Common elements could include the lobby, elevator, walkways, swimming pool, etc.

Fee Simple owners are responsible for their property taxes and sometimes association dues and or maintenance fees in case of a condominium. The vast majority of all Honolulu properties are Fee Simple, however a few Leasehold properties remain.

 

Leasehold ownership only includes the buildings, but not ownership of the land! A Leasehold condominium includes the actual condominium unit and the proportionate interest in the common and limited common elements of the project but not the ownership of the land. Someone else (the fee owner) owns the land and the Leasehold owner only leases (rents) the land at terms defined in the lease document. Leasehold properties at first sight may appear very affordable, but remember, the value of the land is not included.

There is considerable risk not owning the land underneath: Leasehold owners pay a monthly lease rent to the land owner. Per the terms of the lease the lease rent could increase over time and is payable above and beyond the property taxes and any possible association dues or maintenance fees. Per the terms of the Lease there may be restrictions on property usage, alterations and maintenance.
Financing for Leasehold properties could be more difficult depending on how short the remaining lease term is. The terms and details of the Lease can vary for different properties and the risks of ‘Step-Up Lease Rent’, ‘Lease Renegotiation’ and ‘Lease Expiration’ need to be carefully considered. On occasion the land owner may offer the land for sale (Leased Fee Interest), but often at a high ‘take it or leave it’ price. On occasion a Lease may get extended but sometimes at less favorable modified terms.

Leasehold ownership could be more of a lifestyle choice. The investment aspect is speculative at best with many unpredictable variables. Make sure you understand the terms of the Lease before signing on the dotted line. Depending on the surrender provision in the Lease, at time of lease expiration the land owner may take back the improvements and buildings on the land (reversion). Leasehold owners need to be prepared for this worst case scenario of surrendering their interest in the building or condominium. In short, ‘move out and give it all up!’ Remember, Leasehold after all means you are just renting the land.

There was a time when foreign investors bought Hawaii properties, held them for a few years and then sold at substantial gains, without ever paying the required capital gains tax. To protect the State and the Federal government from the loss of capital gains tax revenue, HARPTA and FIRPTA laws were established. While there are no restrictions on who in the world can buy Hawaii Real Estate, it is important to consider the HARPTA and FIRPTA withholding laws for every seller of Hawaii real estate that does not reside in Hawaii during the time of the sale.

 

HARPTA is an acronym for Hawaii Real Property Tax Act, a Hawaii State law that requires a withholding of 7.25% of the sales price (not the gains) from the seller, when the seller is an out-of-State resident. Sellers may recoup some of the withholdings beyond the applicable capital gains tax by filing the appropriate form.

 

FIRPTA is an acronym for Foreign Investment in Real Property Tax Act, a federal law that requires a withholding of 15% of the sales price (not the gains) from the seller, when the seller is an out-of-country resident. If the buyer intends to occupy the property as their residence, the required withholding is reduced as follows:
a) 10% of the sales price for properties sold between $300,001 to $1Mill.
b) 0% of sales price for properties sold up to $300,000.

Sellers may recoup some of the withholdings beyond the applicable capital gains tax by filing the appropriate form.

Sellers need to know that the sale of an investment property may also raise questions by the Dept of Taxation regarding rental income received and if the appropriate GE and TA  taxes (if applicable) have been paid.

The time between the Purchase Contract acceptance date and the date when the buyer takes ownership of the property (recordation date) is called the escrow time period. The length of the escrow time period is often in the 30 to 60 days range depending on if it is a cash transaction or if the transaction is subject to financing. However, some cash transactions could close as quickly as 1 week! Some other transactions involving brand new development projects under construction could take as long as 2 years, or longer, until the completion of the project.

Once the Purchase Contract is accepted (signed by buyer and seller) ‘escrow is opened’ and the fully executed contract together with the buyer’s Earnest Money Deposit gets deposited with the escrow company. The escrow company is an independent third party that will, among other things, order a title search, prepare and record the conveyance document (deed) as well as disburse the proceeds of the sale at time of closing aka recordation.

 

Purchase Contracts can vary but most have a number of ‘contingencies’ (conditions that must be satisfied, or, events that must occur before a party is obligated to proceed). Some important contingencies include the home inspection contingency (J-1), financing contingency (H-3), title review contingency (G-2), review of Seller’s Disclosure (I-1), survey review contingency (K-2, K-3), termite inspection contingency (L-2), association and or condominium document review contingency (M-1), just to name a few.

 

Sometimes while in escrow as a result of a discovery during inspection, buyer and seller may negotiate repairs or credits before the inspection contingency (J-1) time period expires. The buyer may terminate the contract and receive a refund of his deposit, as long as the buyer cancels prior to the inspection contingency (J-1) time period expiration, per the cancellation provisions in the contract. Keep in mind that in the State of Hawaii, sellers are not automatically obligated to repair defects unless otherwise agreed in the contract. Once all inspections are completed, the loan application has been approved, all documents and reports have been reviewed and approved and all other contingencies have been removed, escrow will have the conveyance documents (deed) prepared. Both buyer and seller will sign the deed and other escrow closing documents. In addition, the buyer may sign the mortgage loan documents. Signing could be done out of State, as long as the original signed and notarized documents are returned to escrow for proper recordation.

 

All signed and notarized conveyance documents and loan documents together with all funds (cash and loan) need to be received by escrow no later than 2-business days prior to recordation. Conveyance documents will be stamped and recorded at the Bureau of Conveyances in the morning of the closing date aka recordation date. Escrow will also pay off any existing loans on the property, balance the file, pay any remaining bills, disburse funds and documents and close escrow. Closing escrow for most transactions means the buyer receives ownership rights along with the keys to the property and the seller receives the proceeds of the sale. Congratulations on the successful purchase or sale of your home!

 

In Hawaii the escrow company will need to have ‘Good Funds’ in order to record a real estate transaction. That means that all funds, cash (cashiers check) or wire as well as the bank loan, need to be received by escrow no later than 2 business days prior to recordation. Also, all escrow closing documents and loan documents will need to be signed and notarized no later than 2 business days prior to recordation. By that time buyer and seller will need to have fulfilled all conditions of the contract.

 

Once all escrow closing documents are signed and funds are deposited with escrow, escrow will take the file to the Bureau of Conveyances for their final review 1 day prior to recordation. On the actual date of recordation the conveyance document gets time stamped 8:01am with the date, and recorded at the Bureau of Conveyances. Shortly after 8:01am we will receive recordation clearance, usually a phone call from the escrow company that the transaction has successfully recorded aka closed. Escrow will disburse the funds and close the file. The buyer is entitled to the keys and the seller is entitled to his share of the sales proceeds.

In the State of Hawaii an initial Earnest Money Deposit is customary when submitting a Purchase Contract. Often an additional deposit becomes due once the inspection contingency (paragraph J-1 of the Purchase Contract) has been removed. In case of a brand new development project, an additional deposit often becomes due once the Buyer’s 30-day review and approval time period of the ‘Final Public Report’ has expired. Both, the initial and the additional deposits will be deposited with the ‘escrow company’, an independent third party which acts as the safe keeper of funds until closing. The initial as well as any additional deposits will be applied towards the purchase price and are for the most part fully refundable as long as the Purchase Contract gets terminated within certain contingency timeframes as per the Purchase Contract.

 

A typical deposit schedule for a regular residential resale transaction may look something like this: Initial Earnest Money Deposit anywhere between $1,000 minimum and up to 5% or more of the purchase price at time of submitting the Purchase Contract. Additional deposit between $2,000 minimum and up to 15% or more of the purchase price within 2-business days of the removal of the J-1 inspection contingency. The J-1 inspection contingency time period is often in the range between 10 to 15-days from the acceptance date. Final remaining balance could be cash and or loan no later than 2-business days before recordation.

 

The exact deposit amount depends on a.) the buyer’s available cash to be used for the purchase, and b.) the buyer’s willingness to show financial strength when submitting the offer. For example, a buyer with limited cash funds trying to obtain a 97% LTV (Loan To Value) mortgage may only deposit minimal cash. An all cash buyer that wants to show sincerity and financial strength to the seller may deposit a much larger initial deposit sometimes 5% or more. The same buyer may make the additional deposit even larger sometimes 15% or more.
These are guidelines only. Every buyer has different circumstances that need to be considered when structuring an offer.

 

A typical deposit schedule for a brand new development project (before or during construction) may look something like this: 5% at signing, 5% within 30-days of receipt of the Final Public Report, 5% when the project is 50% completed, remaining balance (could be a loan) no later than a few business days before recordation. These numbers and due dates vary depending on the developer and or the strength of the market. When the market is hot developers may require a more aggressive deposit schedule (more money or at an accelerated pace), and bulk-closings (multiple closings on the same day) with the remaining balance due sometimes weeks before recordation.

When the Hawaii real estate market is hot like it currently is, properties often receive multiple offers from competing buyers. Seller’s will review the offers received and decide how and who to respond based on price, terms and other factors.

 

Pre-Approval:
One option to add credibility to your offer is to attach a Pre-Approval letter from a reputable qualified lending institution when submitting your offer. A Pre-Approval letter shows the seller, that:

a.) a financial institution has reviewed your finances (income and employment history, liabilities and assets), and  b.) determined that you are qualified to obtain a mortgage loan up to a certain amount. Furthermore a Pre-Approval shows the seller, that c.) your credit score has been verified and is sufficient to obtain the type of loan you are applying for.

These are three important factors that could possibly give your offer an edge over other offers received and give the seller a degree of assurance that your loan should get funded.

 

Pre-Qualification:
While a Pre-Approval letter includes the important credit check, a Pre-Qualification letter lacks the verification of credit history. For added credibility we strongly recommend to obtain a Pre-Approval letter over a Pre-Qualification letter when submitting an offer.

 

It is a good idea to have the Pre-Approval dollar amount on the attached letter match the offered price. If the seller counters a higher price we could submit an updated Pre-Approval letter once buyer and seller agree on the new price.

 

What if the Pre-Approval letter shows a higher price than the offer price and we are unable to obtain in time a Pre-Approval that matches the offer price? On one hand it could show the seller you can afford more and therefore the seller might counter higher. On the other hand a higher Pre-Approval amount shows your financial strength but it should not be interpreted as your willingness to pay any more than the offered price.

When possible, matching the Pre-Approval amount with the offer price is the better option.

By the way, getting a Pre-Approval letter from one lender does not obligate you to get the loan from this lender. You might still discover a better funding source.

 

Proof of Funds:
With any cash transaction, we recommend to attach a Proof Of Funds with your offer.

 

This could be a copy of a bank statement showing a.) buyer’s name, b.) name of the financial institution, and c.) account balance (make sure to black out the account number!).

The Preferred Method , is a bank letter on the bank’s letterhead indicating the buyer is in good standing and has sufficient funds to make a cash purchase up to a certain dollar amount. Be prepared, if you don’t provide proof of funds with your cash offer, the seller will often counter and require the proof of funds. It might be to your benefit to be proactive and add an edge to your original offer, especially in a market where multiple buyers are competing for few available properties.

Hawaii’s Real Estate Purchase Contract provides that the buyer’s initial deposit is fully refundable as long as the buyer cancels the Purchase Contract during the inspection contingency (J-1) time period, usually between 10 to 15-days as of the acceptance date. This is the obvious and most often used contingency to cancel where the buyer can expect a full refund. There are other contingencies that the buyer may use to terminate the Purchase Contract, such as the buyer’s review and approval of the seller’s disclosure, the buyer’s review and approval of subdivision and association documents, etc.

 

With brand new development projects the buyer’s initial deposit is fully refundable as long as the buyer cancels the Purchase Contract within 30 days of the receipt of the Final Public Report. Be prepared that it might take a few days for the escrow company to process your refund.

The home inspection contingency gives the buyer the right to personally (or by a qualified expert, professional or other representative of buyer’s choice at buyer’s cost), inspect the property in detail.

We strongly recommend that a buyer should use a qualified professional home inspector and or additional specialized qualified professionals to inspect any and all aspects of the property including the electrical systems, plumbing systems, appliances, foundation, walls, doors, windows, ceilings, roof, structural issues, drainage issues, and other that would be prudent to assess. Any and all inspections and reviews of findings should be completed within the inspection contingency time period, usually between 10 to 15 days as of the acceptance date, as outlined in paragraph J-1 of the Purchase Contract. If the buyer is not satisfied with the inspection results, buyer may terminate the contract. However, the buyer must elect in writing to terminate the contract within the specified time period, otherwise the buyer will have waived this contingency. It is best to schedule the home inspection immediately after the contract acceptance. Home inspectors get booked up some days in advance and it is best to have the inspection results / report several days before the inspection contingency time period expiration, in order to have sufficient time to obtain repair quotes if necessary.

There is no law in Hawaii that obligates sellers to do repairs to the property for sale. Unless specified in the purchase contract, sellers of Hawaii real estate are off the hook. However, that does not prevent the buyer to make a request for remedy of certain defects that may have been discovered during the inspection.

The buyer may request repairs, or ask for a credit in lieu of repairs. The seller could agree, or not agree, counter with a compromise, or not respond at all, depending on many different factors, including the nature and extent of the remedy request as well as the seller’s motivation to close the sale. If the buyer is not satisfied with the seller’s response to the remedy request, the buyer’s recourse is to terminate the contract.
However, the buyer must elect in writing to terminate the contract within the J-1 inspection contingency period, otherwise the buyer will have waived the inspection contingency.

Hawaii’s Real Estate Purchase Contract does not specify any seller’s obligation to do repairs to the property for sale. Unless specified in the purchase contract, sellers of Hawaii real estate are off the hook. Sellers often like to stress that point by adding the “AS IS” Condition Addendum to the Purchase Contract. The addendum does not diminish the seller’s disclosure obligation. The addendum also does not diminish the buyer’s right to thoroughly inspect the property, and, if buyer desires, to make a request for remedies if the inspection results are not satisfactory. If seller’s response to the request for remedies is not satisfactory, the buyer’s recourse is to cancel the contract within the inspection time period, just as it would be without the addendum.

If Buyer is using a loan to purchase the property, any Health and Safety items will need to be resolved prior to funding.

Our website displays all available MLS properties in the State of Hawaii. You may find your dream property right here on our website without ever talking to a Realtor. But sometimes the perfect property is not actively advertised. Our experienced Realtors can research and explore other possible opportunities.

Our experienced Realtors experienced Realtor can also share quickly changing market insights that are otherwise not readily available.

Our experienced Realtors can assist with identifying your purchasing power, suggest appropriate financing options and provide you with a list of qualified lending institutions.

Our experienced Realtors can also assist with analyzing and evaluating the property in regard to a multitude of issues. This includes referring additional qualified professionals to further investigate title issues, survey issues, zoning issues, tax issues, structural concerns, foundation, roofing, plumbing, electrical, lead-paint, asbestos, cesspools, septic tanks, building restrictions, setbacks, encroachments, easements, flood zones, utilities, appliance & pool inspections, termite issues, mold, dry rot, building permits, HARPTA & FIRPTA, 1031 exchange strategies, schools, hurricane and flood insurance, tenancy & vesting, association issues including pending lawsuits and reserve studies / budgets, road widening, future developments, resale value, etc.

Our experienced Realtors can help negotiate price, terms, financing, closing date, occupancy date, rent back, inspections, other contingencies and timeframes, repairs, credits, inclusions, etc.

Today’s Hawaii Real Estate Purchase Contract includes 14-pages plus often several addenda. Sometimes there are revisions to the Hawaii Purchase Contract, which sometimes is due to legislative changes. An experienced Realtor can advise on recent changes and how it might affect the buyer’s and seller’s rights and obligations.

Our experienced Realtors, as your listing agent, can help evaluate, analyze and compare every buyer’s offer received and advise on how to best navigate through the escrow process, foresee and reduce the risk of possible pitfalls and improve certainty of closing.

Our experienced Realtors as your listing agent, can advise on how to prepare your home for the most effective sales results (repairs, re-purpose, cleaning, staging, etc) and how to best position your property in today’s market to obtain your desired goals regarding price, terms, closing time frame, etc.

Our experienced Realtors are required to take Continuing Education (CE) courses to keep up with law updates regarding real estate in order to give you current and valuable advice.

All Hawaii Real Estate Team agents are full time licensed Realtors in the State of Hawaii and members of the National Association of Realtors that subscribe to a strict Code Of Ethics.

 

Contact us to save thousands!