Who Really Pays Closing Costs in Hawaii’s Honolulu Market

Buying or selling in Kaimukī and nearby Mōʻiliʻili and wondering who covers what at closing? You are not alone. Closing costs in Honolulu come with Hawaii-specific rules and customs that can surprise even experienced buyers and sellers. In this guide, you will learn who typically pays each cost, what is negotiable, and how to get a clear estimate before you commit. Let’s dive in.

Quick answer: who pays what in Honolulu

Here is a simple overview of common closing-cost items and the customary payer in Hawaiʻi. Your contract can allocate costs differently, so always confirm in writing.

• Realtor commission: typically the seller. Many markets see about 5–6% of the sale price, but commission is negotiable.
• Conveyance tax (state transfer tax): usually the seller in Hawaiʻi.
• Title insurance: lender’s policy is usually the buyer; the owner’s policy is negotiable and varies by local custom.
• Escrow or settlement fee: often split 50/50, but negotiable.
• Recording fees: typically the buyer for the mortgage and often for the deed per contract.
• Loan fees and prepaids: buyer. Includes origination, appraisal, credit report, discount points, interest, insurance, and lender-required reserves.
• Inspections and reports: usually the buyer.
• Property tax and HOA dues: prorated between buyer and seller to the closing date.
• Condo association documents or estoppel: negotiable; specify in the contract.

How Kaimukī and Mōʻiliʻili can differ

These neighborhoods include many small and older condo and apartment buildings. That often means association document requests, resale certificates, and possible management or estoppel statement fees. Some buildings sit on leased land or have unique title histories, which can add lender reviews and filing steps. If a property is in the Land Court system, expect specific registration filings and potential extra time.

Seller costs in detail

Sellers usually cover real estate commissions, which are commonly about 5–6% of the sale price in many markets and are paid from the seller’s proceeds at closing. Hawaiʻi sellers also typically pay the state conveyance tax, though the contract can shift this. Owners should plan to clear any liens, unpaid property taxes, and association balances before proceeds are disbursed. The owner’s title insurance policy may be a seller item in many transactions, but practice is local and negotiable, so confirm with escrow early.

Buyer costs in detail

If you are financing, expect loan-related charges. Typical buyer closing costs for a loan can range around 2–5% of the loan amount, covering origination, underwriting, appraisal, lender’s title policy, and third-party reports. Buyers also pay prepaids: initial mortgage interest, homeowners insurance, and any lender-required tax or insurance escrows. Recording fees for the deed and mortgage, as well as inspections and surveys, are commonly buyer expenses unless negotiated otherwise.

Condo-specific fees to plan for

In Kaimukī and Mōʻiliʻili, many condos require a package of association documents: bylaws, budgets, reserve studies, and resale certificates. Associations may charge document and estoppel or management statement fees. Who pays can be the seller, the buyer, or both, depending on the contract. If a special assessment exists, responsibility will depend on timing and what your agreement specifies, so address it directly in your offer.

Leased land and Land Court notes

Oʻahu has properties on ground leases. Buyers should budget for lease review and any lease transfer or assumption fees, as well as lender-required documentation if the loan underwriter has conditions tied to the lease. If the property is registered in Land Court, transfers require specific filings and registration steps that can add line-item fees and time. Build these items into your timeline and confirm who pays each fee in your contract.

How to negotiate closing costs

Closing-cost responsibilities are negotiable. Spell out each item in your purchase contract to prevent surprises. Consider agreeing to split escrow fees 50/50, specify who pays the owner’s title policy, and note responsibility for recording fees. For condos, order association documents early and decide who pays those charges in the offer. For leased land, include a lease review contingency and state who covers review and assignment fees.

Timeline and escrow in Honolulu

Escrow commonly runs 30–45 days in Hawaiʻi, though Land Court filings or leased land approvals can extend that. Buyers’ loan funds are wired at closing. After liens, commissions, and taxes are paid and recorded, the seller’s proceeds are released. Property taxes and HOA dues are prorated to the closing date so each side pays for the period they own the home.

Get a clear estimate: your checklist

Ask for written, itemized estimates early so you can plan and negotiate with confidence.

• Request a Closing Cost Worksheet from escrow or title for both buyer and seller sides.
• Get your lender’s Loan Estimate within three days of application, then review your Closing Disclosure before signing.
• Ask your listing or buyer’s agent to provide a seller net sheet or a buyer estimate tailored to your offer.
• Provide specifics to improve accuracy: purchase price, loan type and amount, condo vs single-family, whether the property is on leased land, whether it is in Land Court, and HOA details.
• Confirm who pays for key items: conveyance tax, owner’s title policy, escrow fee split, recording fees, condo document or estoppel fees, and any lease-related charges.

Bottom line for Kaimukī buyers and sellers

In Honolulu, sellers typically pay real estate commissions and usually the state conveyance tax. Buyers typically cover loan fees, inspections, lender’s title insurance, and recording charges. Many costs, including escrow fees and condo documents, are negotiable. Clear contract language and early estimates help you avoid last-minute surprises and keep your closing on track.

If you want local guidance grounded in decades of Honolulu experience, reach out to Chelsey Flanagan. Let’s plan your path from offer to closing with clarity and confidence.

FAQs

Who pays the conveyance tax in Honolulu home sales?

• In Hawaiʻi the seller usually pays the state conveyance tax, but this is negotiable in the purchase contract. Confirm the exact rate and any exemptions with escrow.

Who covers the owner’s title insurance policy in Kaimukī?

• It is negotiable and local practice varies. Confirm with your title company and specify in the contract whether the seller or buyer will pay for the owner’s policy.

How much are buyer closing costs with a loan in Honolulu?

• A common range is about 2–5% of the loan amount for lender fees, appraisal, lender’s title policy, and third-party charges, plus prepaids for interest and insurance.

Who pays condo resale or estoppel fees in Honolulu?

• It depends on your agreement. Many sellers obtain required documents, but fees are often split or assigned in the contract, so specify responsibility in writing.

Do ground leases increase buyer closing costs on Oʻahu?

• They can. Buyers often pay for lease review, lender-required approvals, and any lease transfer or assumption fees. Address these items and timelines in the contract.