Homeowners generally prefer to make a profit rather than break even when selling a property. However, the average homeowner in Hawaii might not realize that he or she is at a disadvantage when going to market. According to research, there are two groups that are more likely than homeowners to profit off a real estate transaction.
Real estate agents
The bestselling book “Freakonomics” was published in 2005 and asserted that real estate agents tend to profit more on the sale of their own homes than what their clients’ make on their home sales. A study from one of the authors of the book specifically asserted that real estate agents make an average of 6% more. It is possible that there is a conflict of interest when it comes to real estate agents, potentially resulting in clients being willing to settle for lower prices. Other possibilities include that homeowners:
- Have less bargaining power
- Are less familiar with the real estate market
- Sell their homes less frequently
Real estate investors
More recent research from the University of Georgia claims that while real estate agents do make a higher profit, the actual figure may be closer to around 3.4% higher than homeowners. Researchers analyzed data on home sales ranging from 2003 to 2013 and determined that real estate investors have the highest profit margin. They tend to make about 8% more than the average homeowner.
Selling a home can be a challenge, especially for those who are unfamiliar with Hawaii real estate laws. Homeowners who are eager to make a good profit might even unwittingly settle for a lower price than what they are capable of getting. To avoid these types of missteps, it is often advisable to seek guidance from an attorney who is knowledgeable in real estate matters.