The Cost of Buying and Selling a Home in Hawaii

When buying or selling a home in Hawaii, it’s essential to understand the various costs involved in the transaction. This guide focuses on costs outlined specifically in the Hawaii purchase contract. These include closing costs and customary fees typically split between buyer and seller. However, it’s important to note that this does not cover other common expenses like preparing a property for sale, such as painting, repairs, or staging. While some of the listed costs are standard, others may vary based on negotiations and specific contract terms. Keep in mind that these costs are estimates and can be negotiated between both parties—no two purchase contracts are exactly the same.

Customary Closing Costs

Section F-6 of the Hawaii purchase contract outlines customary closing costs typically allocated between buyers and sellers. While these are standard expectations, they are negotiable in the final contract.

Seller Responsibilities (Per F-6)

• • 60% of the premium for standard coverage title insurance

• • 50% of the escrow fee

• • Cost of drafting conveyance documents and bills of sale

• • Cost of obtaining seller’s consent

• • Recording fees to clear Seller’s title

• • Seller’s notary fees

• • Conveyance tax

Seller-Specific Ownership Fees and Withholdings 

Certain additional costs may apply based on the seller’s financing method and/or residency status.

• • FHA or VA Mandatory Closing Costs: These may include pest inspection fees, escrow fees, or document prep costs that cannot be charged to the buyer and must be covered by the seller.

• • HARPTA (Hawaii Real Property Tax Act): A 7.25% state withholding on the sale price for out-of-state owners. This may be refundable after filing Hawaii state taxes.

• • FIRPTA (Foreign Investment in Real Property Tax Act): A 15% federal withholding for non-U.S. sellers, subject to U.S. tax filing and potential refunds.

Buyer Responsibilities (Per F-6)

• • 40% of the premium for standard coverage title insurance

• • 50% of the escrow fee

• • Cost of obtaining Buyer’s consents

• • All recording fees except those to clear Seller’s title

• • Buyer’s notary fees

Additional Buyer-Specific Fees

Depending on the property and the buyer’s financing, additional expenses may be applicable. These include:

• • Condo and association ownership transfer fees

• • Cost of drafting mortgage and note or agreement of sale

• • Discount points and any mortgage fees

Additional Costs Outlined in the Purchase Contract

In addition to the standard allocations in Section F-6, the purchase contract outlines additional expenses typically assumed by each party. These can also be negotiated based on mutual agreement or not included at all.

Additional Seller Expenses:

• • J-9: Cleaning Before Close: (~$500 or provided as a buyer credit)

• • J-10: Animal-Related Treatment: Often for carpet and fabric cleaning

• • K-1: Staking of boundary points ($500 – $750)

• • K-2: Survey of boundary points ($1,200 – $1,700)

• • L-2: Termite Inspection, vendor selected by buyer ($300 – $500)

• • M-1: HOA & Condo Documents ($300 – $500)

Additional Buyer Expenses:

• • J-1: Home Inspection ($1,000 – $2,000 varies by property size and condition)

• • Condo and Association Ownership Transfer Fees: Varies based on association

• • Cost of Drafting Mortgage and Note or Agreement of Sale: Typically included in lender fees, but may be itemized separately

• • Discount Points and Any Mortgage Fees: Depends on loan structure and lender policies