This post is the 2nd of a two-part series. Read the first, 5 Myths about Buying Real Estate on the Big Island of Hawaii, here.
1. The buyer for my property will most likely be from Canada or Asia
It’s certainly possible that your buyer could come from outside the US, but even though media headlines could lead you to believe there’s an enormous population of foreign investors swooping in and buying up residential Big Island properties as investment or 2nd homes, the greater likelihood is that your home will sell to someone from the Big Island, Oahu, or the West Coast of the mainland. There has been a rise in foreign investment over the last few years (mainly on Oahu), but definitely nowhere near the pace of the late 1980’s when Japanese investment in Hawaii was making national headlines.
Title Guaranty, a Hawaii-based escrow company, publishes monthly statistics that help paint a true picture of foreign investment in our local market. Another good recap of last year’s market activity is covered in this Feb. 2015 article from Pacific Business News: Japanese Lead Foreign Investors in Buying Hawaii Real Estate.
Acknowledging the probabilities doesn’t mean we won’t market your property globally!
While we understand the percentages, we also recognize that it only takes one buyer to make a sale, and we want to reach as many possible qualified buyers as we can when we list your home. When we list your property, we market it to the world through our highly trafficked brokerage website (of which my business site, findmeinhawaii.com, is a part) and all the other brokerage sites of our local MLS members. Your listing will also appear on well-known real estate portal websites such as Zillow, Trulia and Realtor.com. Luxury Portfolio properties will also appear on luxuryportfolio.com (which brings significant additional global exposure) and juwai.com, a website designed for Chinese-speaking buyers interested in overseas properties.
2. A cash buyer won’t be overly concerned if an appraisal falls short
Pricing high and crossing your fingers for a cash buyer may mean you limit the number of qualified buyers who will consider looking at your home. In rare circumstances, when the market is in an upward trend of the real estate cycle, sellers may be able to demand a premium and wait for a determined cash buyer. However, the decision to plan for your home’s sale to “set the pace” in the market should be made with careful consideration. After all, a buyer who can pay cash for a home in Hawaii is most likely quite savvy financially.
Buyers and their agents have access to the same information that appraisers do. Expecting a buyer to disregard an appraisal that comes in below the agreed upon purchase price can be risky and may send you back to the negotiating table or even cause you to lose the offer completely. That’s not to say there isn’t the occasional circumstance where a cash buyer is willing to pay a premium, but, ultimately, multiple factors in the market will determine the price of your home and your buyer is looking to make a sound investment. Your REALTOR® will help you properly position your home in the market so that qualified buyers for your price point will see it. Then, when offers are on the table, you can evaluate them and make the best choice based on your particular circumstances.
3. Zillow’s Zestimate is a good place to start with my list price
In my previous post, 5 Myths about Buying Real Estate in Hawaii, I went into more detail about how automated algorithms on real estate websites can be misleading for buyers and sellers. These tools are especially inaccurate in Hawaii. Zillow’s error of margin chart that they produce for their “Z-estimates” is a perfect illustration. The error margin for the Big Island is the highest for Hawaii. Click here and look at #2. (Hint: it’s above their national average of 8%)
4. It’s impossible to sell a tenant-occupied home
It’s not impossible, but it can be more complicated. Tenants have a legal right to 48 hours notice before showings. Buyers may not always be patient. If your property is tenant occupied and you are able to wait until the end of the lease (or vacation rental period, if the rental is short term) and show the property while it is vacant, that simplifies things. If that’s not possible, be ready to put some extra energy into facilitating a mutually beneficial arrangement with your tenant during the listing period. The less stress on all parties during showings, inspections and walk-throughs the better. Open communication and careful scheduling can ease the natural tensions that can arise when a buyer, appraiser, inspector and others need access to a tenant occupied home.
5. Selling from abroad is too hard
This may have been true 10 years ago but now, most of our marketing and transactions are streamlined by the use of digital tools. Even for local clients, we use online signing tools and communicate mostly via smartphones and email. There is value in having face-to-face interaction between REALTORS® and clients. But, if your agent is a proficient communicator and stays on top of your transaction, the process can be relatively painless. If you are thinking of selling on the Big Island but you are not a resident, be sure to ask your agent about what tools they will use to create a smooth transaction. A few of my favorite helps for off-island sellers are listed below:
- findmeinhawaii.com and clarkhawaii.com – Every property I list is included in the full MLS search on the Clark Realty website and my website, which feature only Big Island properties. Each Clark Realty listing also gets an individual “property website” (IPW) that makes it easy to share the listing by email or using social media. (Some sellers enjoy participating in the process of marketing the IPW for their property by sharing it with friends, family and colleagues.) The greater the reach, the more qualified buyers are likely to see the listing.
- Docusign: This tool is an essential–the digital replacement of the big red “Sign Here” stamps and stickers in paper files. When using digital files, I put a big “stamp” where I need my client to sign or initial and they just click in the box. The program signs, dates, and initials all areas that I have requested without my clients having to make several trips to my office or the post office to complete paperwork.
- Texting: depending on my clients preferences and cell phone plan I also find value in being able to text my off island sellers. This can be especially helpful when repairs are required in a transaction. I can send a picture which serves as proof of required repairs or cleanings.
If you are ready to list your property, I am ready to assist you. Please text, email or message me through my website, or give me a call at 808-333-0326 to schedule an appointment to discuss how we will partner with you to successfully get your property sold. Until then, a hui hou!