SELLING IN HAWAII
As with selling a home on the mainland, and like many metro areas on the mainland, all members of the Honolulu Board of Realtors abide by the rules and regulations of the National Association of Realtors regarding standards of conduct and a code of ethics. The Honolulu Board of Realtors also has an MLS called HiCentral, a public website, and it pushes its MLS data to outside aggregators such as Realtor.com, Zillow and Trulia.
The Honolulu Board of Realtors subscribes to the data-sharing agreements IDX and VOW, which allow board members to download MLS data for display on their individual company and agent websites. However, they must abide by the display rules. Berkshire Hathaway HomeServices Hawaii Realty provides access to MLS data for use by its clients and customers. Most member of the MLS are members of the Honolulu Board of Realtors. Thus, the actual process of selling is generally similar to what sellers on the mainland have experienced.
The following are areas unique to Hawaii.
This form is required by Hawaii Revised Statues, Chapter 508D (for residential real property) and under common law (for all other real estate transactions, including the sale of vacant land) a seller of residential real property is obligated to fully and accurately disclose in writing to a buyer all “material facts” concerning the property. “Material facts” are defined as any fact, defect or condition (past or present) that would have expected to measurable eaffect on the value to a reasonable person of the residential real property being offered for sale.”
This disclosure statement is intended to assist the seller in organizing and presenting all material facts concerning the property. It is very important that the seller exercise due care in preparing responses to questions posed in the Disclosure Statement and that all responses are made in good faith, are truthful and complete to the best of the seller’s knowledge. The seller’s agent, the buyer and the buyer’s agent may rely upon the seller’s disclosures. The seller is encouraged to obtain professional advice and/or have an expert inspect the property prior to preparing the disclosure statement.
This disclosure is not a warranty of any kind by the seller or by any agent representing the seller and is not a substitute for any expert inspection, professional advice or warranty that a buyer may wish to obtain.
Hawaii is an escrow state, whereby escrow is an impartial third party that handles the closing of a real estate transaction. The Escrow Officer acts as the intermediary between the buyer(s) and seller(s) and collects the funds and documents for handling as instructed. A transfer of title to the property generally occurs when a conveyance document is recorded at the State of Hawaii Bureau of Conveyances. The buyer(s) do not pay the seller directly because the funds have to be deposited in advance of the recording. Instead, the buyer(s) deposit funds with the escrow company and the funds are to be paid to the seller once all conditions for the sale have been met and after agreed upon costs are paid.
Hawaii Real Property Tax Act (HARPTA) seeks to ensure that non-residents — individuals or entities — report and pay capital gains tax when they sell Hawaii real estate. As a general rule, every transfer of real property must withhold 5 percent of the “amount realized” general eh sales price and transmit that amount to the State Tax Department within 20 days after closing unless an exemption applies. Generally speaking, there are several exemptions but sellers are urged to check with their accountants to determine their actual exemption from this withholding. It is the seller’s responsibility to provide proof that the seller has an exemption. The definition of a Hawaii resident is defined in the Hawaii Revised Statutes (HRS) 235-1.
Broadly speaking, the exemptions are (sellers are urged to seek professional accounting advice to determine if they qualify for an exemption and what forms need to be competed and submitted):
- Seller is a 1031 exchange
- Seller is selling at a loss
- Sales price was under $300,000 and was used as a principal residence
The Foreign Investment in Real Property Tax Act (FIRPTA) is part of the Internal Revenue Code 1445 and seeks to ensure that foreign persons — individuals and entities — report and pay applicable capital gains tax when they sell U.S. real estate. As a rule generally, every transfer of real property must withhold 15 percent of the “amount realized” of the general sales price and transmit that amount to the Internal Revenue Service within 20 days after closing unless an exemption applies. Generally speaking, there are no exemptions but sellers withholding can be reduced depending on the purchase price of the property and whether the buyer will be an owner occupant. Sellers are urged to check with their accountants to determine their actual withholding percentage.
To begin selling your real estate in Hawaii, please contact us.
Mary and Chris Beddow Kailua Office
Mary was great. She was very responsive, went "above and beyond" and made the entire transaction much simpler than I would have expected. She was great! Thank you. J.P.
Scott Larimer Hausten Office
We had an excellent experience with Scott Larimer. His diligence and professionalism was exceptional. We will recommend him to our friends and acquaintances in need of a realtor B.L.
Danielle Scherman Kailua Office
Danielle was nothing short of incredible!!! Always available to answer questions; thorough in her preparation and follow through; personable, smart, and knowledgeable! She took a potentially difficult situation with our timing of all transactions needing to thread a needle and she nailed it. When we move back in 7 years upon my retirement we will be looking her up! C.V.S.
Malia Siu and Lisa Camacho Hausten Office
Malia and Lisa are an excellent team. They both listen to clients’ needs and their follow up is impeccable. They are also true professionals with comprehensive industry contacts which helps make the transaction go smoothly. Malia and I have known each other for many years, but I've never had a chance to see her work. She is an exceptional agent and your firm is fortunate to have her represent your brand. I would not hesitate to recommend her to all my friends and family. - D.G.