KEN IGE / KIGE@STARBULLETIN.COM
Richard Cricchio runs the Hawaii office of Help-U-Sell, which specializes in a la carte services for homeowners who want to sell their houses. Clients pay a flat fee, rather than the traditional percentage commission to a Realtor.
On your own With Hawaii's real estate market hotter than it has been in 10 years, more people are choosing to sell their own home and forgo the services of a Realtor.
In a hot real estate market,
How to sell out
some close the sale themselvesBy Lyn Danninger
ldanninger@starbulletin.comWhile there are no statistics on how many people attempt to sell their own homes in Hawaii, a quick perusal of recent Sunday classified sections shows a number of for-sale-by-owner properties.
And businesses are springing up to help the real estate do-it-yourselfer.
Dwight Yanaga and his wife, Cindy, just sold their two-bedroom, two-bath condominium in Kailua.
Yanaga said he would have used a Realtor if not for the current state of the market.
"We got an offer within two weeks and we met our buyers in the second open house we held," he said.
"There is a high demand for property," he said. At $249,000, he got his full asking price.
A few years ago, at the bottom of Hawaii's real estate market, it would have been the other way round. If he had been forced to sell then, Yanaga said he would have been writing a check to the bank for what he owed on the property. Instead, Yanaga describes the recent sale as "nicely profitable."
Another bonus for the Yanagas was that the buyer paid cash, making the transaction relatively straightforward.
"(The cash offer) meant the unit didn't have to appraise, the buyer didn't have to qualify for a loan; so it expedited things. We were so fortunate, we could not have asked for an easier sale," he said.
Yanaga said he was inspired to try selling his home after talking to a friend who had done the same. "He told me he saved $25,000 on his side alone but gave 3 percent courtesy to their Realtor," he said.
In a traditional Hawaii real estate transaction, where both buyer and seller are represented, it is an industry standard that a 6 percent commission is split between the two realty firms. That rate is not set by law and is negotiable.
KEN IGE / KIGE@STARBULLETIN.COM
Richard Cricchio, who runs the Help-U-Sell office in Aina Haina, said the company will offer as much or as little assistance as a client desires.
Now Yanaga's neighbors are trying to sell their own properties, Yanaga said. "We've personally inspired others in our complex," he said.
Still, even with the relative ease of the sale, Yanaga cautions those considering doing the same thing to be prepared for hard work and out-of-pocket costs.
The hard work included getting the property in showroom condition.
"We did some extensive work like paint, new fixtures, granite counter tops and really cleaned it from top to bottom. The first impression is really important for buyers," he said.
Cindy Yanaga also put in a lot of time and effort.
"My wife had a great deal to do with how well it went. She made it look like a model home. If there was any downside, it was the amount of time it took. For a while, we didn't really have a life," he said.
Another part of the preparation was creating marketing materials, getting familiar with all the paperwork involved, running advertisements and purchasing open house signs, Yanaga said.
The Yanagas also recognized they needed to reach out to as many potential buyers as possible.
"We turned a fact sheet into a PDF file, including digital photos, and e-mailed it to all the Realtors we knew," he said.
Because they were willing to offer a 3 percent commission to the buyer's Realtor, the Yanagas attracted a lot of prospects.
Had the condominium not sold, Yanaga said his next step would likely have been get the property included in the Multiple Listing Service, a closed database of home listings carried by real estate brokers. To do so, he would have needed the services of a Realtor.
But not wanting the full range of services traditionally offered by a Realtor, Yanaga said he would have opted for what a growing number of sellers are now considering -- one of several firms that provide a la carte real estate services. A growing trend on the mainland, such firms are relatively new to Hawaii.
Realty Universal Inc., owned by licensed broker Nathalie Mullinix, offers a variety of services, all the way up to full representation.
But the majority of her clients opt for the basic "for sale by owner" service, which costs $500 and includes six months' placement in the MLS, weekly newspaper open house advertisements and placement on six real estate-related Internet sites. The company also reviews all contracts, Mullinix said.
Mullinix, who was raised in Hawaii, developed her program in 1994 when she lived in Maryland.
"The beauty of the program is that you use us if you need us," Mullinix said. With a small staff and several agents, Mullinix said her business has grown substantially since opening in June 2001. "Between January and August this year, we've listed $32 million in property, so it's really taken off," she said.
Mullinix said she was not initially welcomed by other real estate professionals.
"We weathered being the new kid on the block. We had a little flack but nothing major once the agents realized how we worked," she said. "We recommend our clients offer the 3 percent courtesy. We try to make it a win-win for everybody," she said.
Help-U-Sell is another fee-for-service operation. It opened in Honolulu in 2000 as part of a national franchise that has been in business since 1976, said Realtor Richard Cricchio. Cricchio runs the company and was a Realtor for 13 years before encountering the concept on a visit to the mainland.
For $3,750, Help-U-Sell will offer as much, or as little, assistance as a client wants, Cricchio said.
"We pretty much do everything that a traditional real estate firm does. We advertise every week until sold, help the seller establish a price, handle the paperwork and escrow. When the property closes, that's when we collect our fee. The difference is we just charge a flat service fee instead of the 6 percent commission," he said.
Like Mullinix, Cricchio also encourages his clients to offer a 3 percent commission if the buyer is represented by a Realtor.
Cricchio believes his flat fee approach has gained popularity in recent years because consumers have become more savvy and have access to more information through the Internet.
"I think it's the way of the future," he said.
Not everyone agrees with the for-sale-by-owner approach.
Attorney Jeff Crabtree points to potential legal problems.
"Hawaii has a number of rules regarding disclosures in real estate transactions. If those disclosures are not made, they can cause great confusion, harm and even litigation. A Realtor is required to do a certain amount of due diligence," he said.
Moreover, if any part of a transaction is found to involve anything unfair or deceptive, the penalties can be severe and also include attorney fees, he said.
"You could wind up with a big problem downstream. Whereas when you are dealing with a Realtor in Hawaii you have a right to rely on what the seller's Realtor is telling or not telling you. They have a duty to investigate and disclose.
"A good Realtor will help you stay out of trouble," he said.
Likewise, Guy Tamashiro, chairman of the Honolulu Board of Realtors, notes that employing a full-service Realtor will likely garner the seller or buyer a better price on a property.
"A skilled Realtor is going to get you the best possible deal," he said.
Moreover, emotion, which often arises in the course of a home sale, is removed from the transaction, Tamashiro said.
"(The Realtor) can be more objective," he said.
David Heiss has just begun the process of selling his house, a three-bedroom, two-bath home in upper Makakilo. The house has an attached home-office and a commanding view of the coastline below.
Heiss, who priced his home at $295,000, said he is competitive with other homes for sale in the neighborhood based on previous sales and a recent appraisal. But Heiss said he is working with Help-U-Sell because they will provide the basic things he needs.
"They are going to do my advertising, that's really the main thing, and supplying me with signs, fact sheets and other forms; but I'll do my own open houses," he said.
Heiss said he wants to see how the experience goes before considering the full service approach.
"I have bought and sold houses before, and I wouldn't be doing this if I hadn't been through two sales before with a Realtor," he said. "At some point we could end up with a Realtor, but right now we want to sell ourselves and see how the whole experience goes."
The professionals and experienced amateurs had some advice for the do-it-yourselfer. Tips for selling out
>> Do your homework before putting the home up for sale. Get familiar with your neighborhood so you can set a realistic and competitive price.
>> Make use of technology to create inviting marketing materials that will attract potential buyers.
>> To maximize exposure, be prepared to advertise.
>> If you're not familiar with the sales contract and seller obligations, seek legal advice.
>> First impressions are all important. Make sure the home is ready to be shown and is in as good a condition as possible.
>> Be prepared to spend time and be flexible. Not every house will sell in a matter of days.
>> Although commissions are negotiable, a willingness to offer a courtesy commission to a potential buyer's Realtor will increase your home's exposure and improve the chances of a sale.
>> A real estate sale is a business transaction. Try to keep emotions out of the process.
Compiled from conversations with sellers and professionals
