New international homeowners, and those from the Mainland U.S., often don’t have knowledge of the complexities and differences of real estate transactions in Hawaii. It’s up to the Realtors® in Hawaii to educate these new homeowners on the process to ensure a smooth and stress-free transaction.
Ethics in Real Estate
We often hear: “I wish someone had explained to me the benefits of working with only one real estate agent at a time and how real estate agents are paid.” Some international buyers may think that working with different agents at the same time will yield better results. However, that’s not the case. Most real estate agents get their listing information from the same source, the Multiple Listing Service (MLS).
For example when you go to an open house, the hosting agent will ask if you’re already working with a Realtor®. If you say "yes," they will honor that relationship and not solicit your business. If you’re not currently working with an agent, this is a great opportunity to interview them and find out if you’d like to work with them. Whether buying or selling, you'll choose one agent, and that agent will represent your interests in the transaction and work hard to help you get the best deal possible.
How Are Realtors® Paid?
Another issue that is often misunderstood is how commissions are paid. There are usually two parties to a transaction – the seller (represented by a listing agent) and the buyer (represented by a buyer’s agent). It's quite common for the seller to have a listing agreement with their agent and agree to pay them a commission. In a normal transaction, that commission is split 50-50 between the buyer’s agent and the seller’s agent.
National Association of Realtors® (NAR)
In the U.S., most real estate agents are members of the National Association of Realtors® (NAR) and are bound by a strict professional Code of Ethics. Whether you're buying or selling, it’s crucial that you find a licensed agent who’s a member of NAR to work with and represent your best interests in a real estate transaction. Non-members aren’t bound to the same standards and ethics.
Finding the Right Agent
One of the best ways to find a great Realtor® is asking family and friends for referrals. Of course, if you’re an international buyer, it’s a little more challenging. Even if family or friends refer a real estate agent, it’s imperative that you take the time to meet and interview the agent, go over their qualifications, experience, expertise and knowledge. Bear in mind that the average real estate transaction takes about 45-60 days to close (and sometimes longer due to unforeseen complications), so it’s important that your values, personalities and goals mesh. This may be the largest purchase of your life, so it’s very important that you like your agent and trust them to represent your best interests in the transaction.
Qualifications
Of course, you want your real estate agent to be professional, honest and ethical, but the agent that you choose to work with must also be responsive and reliable, answer or return phone calls and emails in a timely manner, walk you through each step of the process and clearly outline every document you are signing.
You'll also want to ask yourself the following questions:
- How much experience and knowledge do they have when it come to the local real estate market?
- Are they able to handle unforeseen complications in the transaction?
- Do they understand the nuances and differences of real estate in Hawaii?
You'll want to deal with a professional, not someone who is selling real estate on a part-time basis.
Different Types of Agency
What is an agent? Technically, a Realtor® is a licensed agent you hire to represent you and protect your interests. If you are a buyer, you'd hire a Realtor® to represent you, find a property that matches your requirements and get you that property for best price with the most favorable terms. If you are a seller, you'd hire a Realtor® to sell your property and work to get the highest price with the most favorable terms.
The buyer's agent and the listing agent have different objectives, as they represent opposing parties; however, it’s the agents’ duty and responsibility to reach a compromise and attain the best price and terms for their clients.
On occasion, an agent might represent both the buyer and the seller. This is called dual agency.
At Locations, we have a Buyer’s Agreement that buyers sign when they’ve chosen the agent they wish to work with. This document spells out the scope and obligations of both parties. By signing the Buyer’s Agreement, the buyer is “hiring” that particular agent to represent them and the agent promises to give their 100 percent effort when working for the client.
What happens if the relationship sours? If you’ve decided that you no longer wish to work with that agent, just give notice in writing that you want to end the Buyer’s Agreement and you’re free to work with another agent. When ending the Buyer’s Agreement, be upfront and honest with the agent first. This is their livelihood and their reputation, and posting negative comments on social media before speaking with the agent can cause a lot of damage.
So, to summarize, homebuyers and sellers--especially ones new to Hawaii real estate--should work with a knowledgable Realtor® who will protect their best interests and help them to get the best deal. If you don't have a Realtor®, you can find one here--you can even search by languages spoken.
