Selling Your Hawaii Home: The Complete Guide

There are plenty of reasons people sell their Hawaiʻi homes.

Some have outgrown their old residences and need more space. On the flip side, others may have too much space, so they’re looking to downsize. And while some Hawaiʻi residents may be sticking around the Aloha State, others may be saying aloha to Hawaiʻi as they leave the state—for now.

No matter your circumstances, we’ve compiled a list of tips and tricks to simplify your Hawaiʻi home sale. With these must-knows, you’ll go into your sale prepped and ready for the best possible outcome, be it a quick sale, an optimal sale price, or a hassle-free experience.

1. Know Your Intentions Going into the Sale

When you decide to sell your home, it’s important to take stock of your intentions—and your outcomes for the sale.

Are you leaving the state, like the 15,000 people who moved away from Hawaii in 2022? If so:

• Do you already have a sense of where you’ll go?
• Is there a home already waiting for you?
• Or will you need storage for your belongings while you transition your new home?

Finding Storage Solutions

Talk to your moving company about potential storage solutions early on. Even if you don’t anticipate a gap between homes, knowing you have storage options to fall back on can set your mind at ease during the home sale process.

Additionally, if you already have a destination in mind, it might make sense to store your items closer to your new home. This can be especially true if you’re moving to the mainland. Storage on the mainland can be much more cost-effective than in Hawaiʻi, so you may want to have your items shipped ahead.

By talking to your movers early on, you’ll know exactly what’s available so you can plan accordingly.

Maybe you’re you staying local—and simply looking for a different type of housing within Hawaiʻi?

• Do you need more room for a growing family?
• Are you downsizing to a property that’s more suited to your current lifestyle?
• Are you open to an interisland move? Or will you stay on the same island?

Answering these questions will help focus your home search from the start.

If you’re considering buying a new home in Hawai’i right away, make sure to talk with your real estate agent about how to make a smooth transition. Things like contingency clauses and/or careful scheduling of your closing date can mean fewer disruptions to your life.

Tax Implications of Your Hawaiʻi Home Sale

The other thing you’ll want to plan ahead for are the tax considerations that come with selling your home in Hawaiʻi. The state’s hot real estate market has meant significant home value appreciation for many Hawaiʻi homeowners. When you sell, Uncle Sam will want his cut, and so will the Hawaiʻi state government.

It pays to talk to a tax professional early on, while you’re still deciding exactly what tack to take. Good advice—and smart decisions—can mean significant savings.

For example, investors selling their Hawaiʻi properties may be able to defer capital gains with a 1031 exchange.

Those selling their primary residence in Hawaiʻi may qualify to exclude up to $250,000 of your gain—or $500,000, if you file a joint return with your spouse.

In other words, this isn’t the time to be an armchair accountant. Spend the money for a consultation with a pro. Tell them your plans, and ask their advice. It will more than pay off.

What Is the Capital Gains Rate in Hawai

The current maximum state capital gains tax rate in Hawaiʻi is 7.25%, although there’s legislation under consideration to raise it to 11%.

You’ll also be subject to federal capital gains taxes, which tax long-term capital gains at a rate of 0%, 15%, or 20%, depending on your circumstances.

With these kinds of percentages floating around, it’s easy to see why talking to a pro can help you save a significant amount.

What Is HARPTA?

The Hawaii Real Estate Property Tax Act is a mechanism the state of Hawaii uses to ensure that they’re able to collect capital gains taxes from non-residents. (Residents would report their capital and file taxes through their yearly Hawaii income tax filings.) HARPTA requires a collection of a flat 7.25% of the entire home sales price for non-residents.

Ultimately, a seller will only owe 7.25% on the appreciation of the property (the capital gains), not the entire cost. Non-residents can file form N288C after closing to get a refund in the case that the HARPTA withholding exceeds the actual capital gains tax due on the property.

If the seller is a foreign investor and not a U.S. citizen, they may also be subject to a 15% FIRPTA withholding. The Foreign Investment in Real Estate Property Tax Act of 1980 (FIRPTA) allows the federal government to tax capital gains on real property sold by non-citizens. Like HARPTA, the person who is taxed can file a tax return to receive a refund of any taxes paid in excess.

Once you’ve decided to sell—and you have a plan for your next steps—it’s time to figure out the best time to sell so you can maximize your sale price.

2. Time the Sale of Your Hawaiʻi Home

Data from Redfin suggests that March or April would be a good time to sell your house.  A few years ago, the real estate website analyzed all their available data and found that:

(Source)

With beautiful weather year-round in Hawaiʻi, it might feel like there’s no “bad” time to sell. But why not take advantage of the research above and see if it helps you get a bump in your sale price or speeds up your timeline? Of course, you should run all of these decisions by a trusted real estate agent. (More on that shortly!)

MOVING TIP:
When it comes to Hawaiʻi moves, summer is the busiest time for moving companies. If you anticipate moving during the summer months, reach out to your preferred mover ASAP to get on their schedule.

If you’re able to schedule your move at another time, you’ll find it a lot easier to schedule your preferred moving dates and times.

3. Add Up the Costs Associated with Your Home Sale

It’s easy to look at the sale price of your home and think of that as money in your pocket. However, as with most real estate endeavors, selling your home comes with a few costs:

Every home sale is different, so you may be responsible for additional costs we haven’t mentioned here. An experienced real estate agent or broker can help you zero in on this number.

And that brings us to our next home-selling tip…

4. Call in a Pro

Your real estate agent will have a huge impact on the sale of your Hawaiʻi home. It’s important to pick someone you trust, someone who also understands your goals for selling your home.

A good agent will help you:

• Price your property right so you get plenty of interest—and a price you’re happy with
• Prepare your home for showings (more on that in a moment!)
• Pick the offer that works best for your circumstances
• Ensure a smooth and speedy closing

It’s also critical to pick someone with experience on the Hawaiian Island you’re choosing to live on. An agent who works primarily on the Big Island just doesn’t have the same level of knowledge for a Maui sale, and vice versa.

If you don’t already have someone in mind, check out our article on choosing the right Hawaiʻi real estate agent. We’ll show you where to start your search and how to vet candidates so you can find a real estate agent who will make your Hawaiʻi home sale simple.

Next, let’s talk about putting your best foot forward when it comes to welcoming prospective buyers to your home.

5. Get Your House Show-Ready

Appearances count when you’re selling your home. While you don’t want to go overboard in this area, there are a few simple things you can do to make a more positive impression on buyers. (And score a higher home sale price!)

Your real estate agent will likely have excellent recommendations in this area. We’ve got a few for you to consider, too.

Go for Clean & Uncluttered

That’s the look you’re going for. If you’ve lived in your house a long time, it might be worth it to call in a professional team to do a deep clean. Your bathrooms, your appliances, and any carpeting could probably all benefit from some extra attention.

Did you know that buyers can be extra-sensitive to smells? Unfamiliar or unpleasant odors can quash a buyer’s interest quicker than you’d think. A solid top-to-bottom scrubbing can help neutralize the smell of a lived-in house.

You’ll also want to declutter—and maybe even downsize your possessions. Ultimately, what you’re going for is a blank canvas, something potential buyers can easily project their own taste, furnishings and décor on. Neutral-colored walls, minimal furniture, and minimalist decorations can all set the stage for a buyer to fall in love with your home.

Don’t Forget the Exterior

While you’re giving the inside of your property a fresh look, make sure you take a peek at the exterior, too. Try to see the exterior of your house with fresh eyes. What kind of first impression does it give? Does it set the right tone for what’s inside?

Or do you need a landscaper to come over and give your property a little love? Perhaps a good power wash is in order—walls, roof, windows, and all.

At the end of the day, a little attention to your home’s curb appeal can go a long way.

Great Photos Matter

Finally, if your real estate agent proposes hiring a professional photographer, don’t hesitate. A great online listing with professional photos will draw a ton more buyers.

This is especially true for Hawaiʻi properties, where you may get interest from neighboring islands, the mainland, or abroad. People have even been known to buy houses in Hawaiʻi sight unseen, purely on the strength of the photos.

Think of professional photos as a solid investment in attracting more buyer interest, which can often translate to a higher sale price.

6. Sift Through the Offers Thoughtfully

Once you and your real estate agent have done all the legwork, you may find yourself in the enviable position of choosing from multiple offers.

It can be tempting just to choose based solely on price, but you may also want to consider factors like:

• Contingencies – What conditions has each buyer requested that could cancel the sale? Fewer contingencies could mean a faster sale.
• How the buyer will pay – Cash buyers, who are becoming increasingly common in Hawaiʻi real estate, don’t have to jump through as many hoops as those securing financing. A cash sale may close faster, and it also may close more reliably
• How fast the buyer wants to close – Depending on your situation, you may not be interested in a fast sale. Which buyer’s timeline aligns most closely with yours?
• The emotional factor – Are there any buyers who stand out in your mind, such as a family seeking their first home? Knowing you’re selling to someone who will really appreciate your home can seal the deal for many sellers

Ultimately, your real estate agent will be a great sounding board to help you select the right offer for your situation.

7. Last Details: Choosing the Right Moving Company

When the sale is closed and it’s finally time to say goodbye to your old home, an affordable, professional, and reliable moving company will add significant ease to Moving Day.

Whether you’re doing a local move, interisland move, mainland move, or international move, we recommend getting three, independent quotes for your Hawaiʻi move. That way, you’ll get a good lay of the land in terms of your options and your costs.

If any one company comes in significantly lower, evaluate their quote with care. Make sure that quote includes absolutely everything so there are no surprises on Moving Day.

Finally, make sure to ask about storage options. It always pays to be prepared for the unexpected when you’re selling your house. A company that can store your household items means greater flexibility for you.

Of course, we’d love to be one of the companies to quote your relocation after the sale of your Hawaiʻi home. We do moves to all destinations and moves of all sizes. We also have storage options on all four major Hawaiian Islands, plus on the mainland.

Just reach out to our team, and we’d be happy to arrange a complimentary quote.