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18 min read Jan 18, 2023

How Much Are Closing Costs for Seller in Hawaii?

How Much are Closing Costs for Seller in Hawaii

Congratulations! You’re now almost at the finish line. But before you pop open the champagne, you have to go through the closing process to transfer the property to the buyer legally.

Closing on a property in Hawaii can be overwhelming and exhausting. However, familiarizing yourself with the process and various Hawaii closing costs can make the process smoother and easier.

What are Closing Costs in Hawaii?

Key Takeaways

  • Closing costs, also known as “settlement costs,” are the final expenses to complete the real estate transaction.
  • Closing costs are separate from the price of the property.
  • The seller and the buyer have to pay specific closing costs.
  • Typically, in Hawaii, the closing process is managed by a real estate attorney.
  • Due to different fees and statute requirements, closing costs vary in municipalities and states.


Who Pays Closing Costs in Hawaii?

Both buyers and sellers share this burden, but sellers usually have to pay more. Some sellers even pay the buyer’s closing costs as an added incentive. The closing costs in Hawaii for seller is typically deducted from the proceeds from the sale of the property.

If the offer price is attractive enough, a seller can choose to pay the entire closing costs to sweeten the deal for the buyer. Sellers need not wonder about how much is an appraisal in Hawaii because buyers are the ones usually responsible for costs like appraisal fees, title insurance, and mortgage fees.

Hawaii real estate brokers will know who is responsible for the closing cost in the state, so you can discuss the matter with them in detail. It is important to note that closing costs are negotiable, which means you can discuss the expenses with the buyer and come up with a favorable solution for both.

This can be a time-consuming process, especially if you don’t understand the details well. Knowing the seller closing costs in Hawaii will help you save time, money, and stress.

» Estimate Seller Closing Costs Calculator Hawaii: Calculate seller closing costs using Houzeo’s advanced Closing Cost Calculator

How Much are Closing Costs in Hawaii?

The closing cost in Hawaii for sellers is approximately 8%–10% of the home’s agreement value, not including the mortgage payoff. This estimated closing costs when you sell your home in Hawaii include the commission of the listing and buyer’s agent.

Let’s put that in perspective! With a typical home value of $908,490, if you are selling a house in Hawaii, your closing costs may amount to $72,679-$90,849.

Most of the closing costs for seller in Hawaii will be deducted from the proceeds you get from the property. As such, you need enough equity to cover some of the expenses.

What are the Typical Closing Costs for Seller in Hawaii?

1. Attorney’s Fee

The state of Hawaii mandates the presence of a lawyer at the closing. Sellers usually hire real estate attorneys to review the sales contract, especially when no real estate brokers are involved or there are any legal issues with the property.

In most cases, the seller and buyer hire different attorneys to represent their best interests. However, if you and the buyer decide to hire the same attorney, the attorney fee will be split.

Typically, the average attorney fee for house closing in Hawaii is $140-$500 per hour.

2. Credits Towards Closing Costs

You can offer to help buyers with closing costs to make the property more attractive, especially if you live in an area where market competition is low. These costs are called closing credits or seller concessions and are paid at closing.

You can also negotiate concessions with homebuyers if a requirement for repairs arises after the inspection. This may help you save some money on the costs of repair.

3. Escrow Fee

An escrow is a neutral third party that holds certain funds or the property until the contract conditions have been met. It protects the interests of both parties by ensuring that either does not wrongfully back out of the deal and lose money. Typically, the escrow charges in Hawaii will be split between the buyer and you as both parties benefit from it.

You should budget between $200 to $500 or more for escrow fee, depending upon the circumstances of their sale.

4. Home Inspection Fee

You can opt for a home inspection to identify any major defects and issues in the house that you must resolve before selling it. These may include plumbing issues, water damage, mold, appliance malfunction, etc. This can be done before the property is listed on the market (pre-inspection) or just before the closing.

Hawaii seller disclosure requires sellers to declare any known issues and defects with the property that may affect the health and safety of the buyer. Some of these are:

  • Structural defects: The buyer must be informed about leaking roofs, loose masonry, foundational cracks, etc.
  • Factors that pose health risks: You must disclose the presence of asbestos, lead paint, etc., to the buyer. However, the law in Hawaii does not mandate radon testing and identifying the presence of mold.
  • Soil problems: You must identify any issues related to the foundation of the home that could potentially render the house inhabitable. This includes underground pits, mines, or other instability.
  • Flood risk: You must provide a list of flooding instances and water damage caused by pipe leaks, broken sewer lines, leaking roof, etc.
  • Pest infestation: You must also offer a list of any previous or current infestations of termites or other wood-boring insects.
  • Utility defects: You must list defects such as malfunctioning heating and air conditioning systems, damaged lighting fixtures, faulty wiring, leaky ventilation systems, etc.

The buyer can also undertake a home inspection. However, if they find undisclosed defects, it might give them the upper hand during negotiations, or they may back out of the deal.

6. Home Warranty Fee

A home warranty covers the maintenance cost of the devices and appliances in the house for a limited time period, like, days, months, or years. You may offer a home warranty to make the property more desirable for buyers.

7. Homeowner Association (HOA) Fee/ Document Fee

If you are a part of the Homeowners Association (HOA), you will have to pay the fee due until the closing date and clear the remaining dues, if any. In most cases, you will not be able to close on the house until the dues are paid.

However, if the issue persists and is not resolved before closing, the HOA can place a lien on your house and even initiate foreclosure.

8. HOA Estoppel Fee

The HOA Estoppel letter is a legally binding document containing details about the financial obligations like the monthly or annual fee, that the buyer will have to pay after closing. It also offers information about any unresolved dues you may owe.

The HOA Estoppel fee in Hawaii needs to be paid by you as part of the process. It ranges from $200-$500 per month.

9. HOA Transfer Fee

If you are a part of the Homeowners Association, at the time of closing, the ownership of your house needs to be transferred to the buyer in HOA records. The HOA transfer fee is a one-time non-negotiable charge that you pay the HOA to update their records.

10. Mortgage Payoff

Mortgage payoff will most likely be one of the biggest items on your list of fees. You’ll have to pay off any remaining balance of the mortgage on your property with the proceeds of your home sale at closing. This includes interest accrued from the last payment to the day of closing and any penalty the lender might charge you for prepayment of the mortgage.

Contact your lender and discuss the requirements to pay off the mortgage to get the overall details of your closing costs. Also, check for the loan documents to see if there’s any prepayment penalty with your mortgage.

11. Municipal Lien Search

A Municipal Lien Search can help you uncover any unrecorded liens, code violations, permits, taxes, and utility bills, associated with the property. While many sellers forego a municipal lien search, it can complement a title search, especially since it offers additional information about open or expired permits.

An open or expired permit can be a thorn in the side for both you and the buyer as it can lead to further expenses and delays in the sale. On average, a municipal lien search costs $200.

12. Owner’s Title Insurance

Primarily, you, the seller, will pay for the owner’s title insurance to protect the buyer against discrepancies relating to the ownership of the property or false documentation. Additionally, title insurance takes care of any back taxes, liens, ownership clauses, etc.

Both parties can negotiate who purchases the owner’s title insurance.

» Who Pays for Owner’s Title Insurance in Hawaii: Read further to know more about owner’s title insurance in Hawaii.

13. Property Tax

While there is no set rate, with a statewide average of 0.28%, the property tax in Hawaii is the lowest in the country.

You must pay prorated property tax according to the date of purchase at closing.

14. Real Estate Broker Commission

The agent’s commission is the biggest chunk of the closing cost you need to pay. However, it’s negotiable and typically paid from the proceeds of your house sale. Likewise, don’t forget to contact your agent to negotiate the fees. In total, you are expected to pay the real estate agent commission that ranges from 4% to 6% (listing agent commission + buyer’s agent commission which costs 2% to 3% of the total sales price).

To put this in perspective, as per the typical home value, the average Hawaii real estate agent commission rate is around $36,339-$54,509 in commission.

If you want to avoid paying hefty commissions, you can list your property for a flat fee or with no commission at all! Choosing HI FSBO (For Sale by Owner) and listing your home with a Flat Fee MLS Service in Hawaii can help you save more. What’s more, you pay zero realtor commission if your buyer has no agent.

» Discount Real Estate Brokers HawaiiThe best of both worlds! Opt for full-service discount realtors in Hawaii at a lower commission.

15. Recording Fee

A recording fee is paid to the local government to register the change in ownership of a house or sale of a property in the public record. It also records mortgages and other liens against the house. Recording fee is usually charged by the county.

16. Transfer Tax

Transfer tax is levied to transfer ownership of the house from the seller to the owner. The tax amount is based on the value of the property. It may be imposed by the municipality, county, or state.

Depending on the negotiations, the transfer tax can be paid by either seller or buyer. In some cases, the tax is split between the parties.

17. Utility Bills

You must pay all utility bills till the date of purchase of the house. The title company usually checks for unpaid bills and utility liens. If there are any dues, you must clear them at closing.

How to Reduce Closing Costs in Hawaii?

1. Opt for a discount broker or a flat fee realtor

Compared to traditional brokers who charge 6% of the sales price as commission, discount real estate brokers only charge 3-4% of the sales price for their services. Some low commission realtors offer higher concessions if you let them represent you as buyer’s agents for your next real estate purchase.

2. Choose “For Sale By Owner”(FSBO)

Sellers can save up to 3% commission and cut several costs by opting for “For Sale By Owner” services. Houzeo offers Flat Fee MLS packages for FSBO sellers that list properties on the MLS and make the selling process easier and smoother. What’s more, if the buyer is unrepresented, with Houzeo, sellers can sell their homes for zero realtor commission charge!

» Flat Fee MLS: Everything You Need to Know

3. Research and compare

You can save more cash on closing costs for seller, such as the pest inspector or homeowner’s insurance agent, title and escrow companies that are more economical. Browse and ask friends who have experience hiring one.

4. Ask to roll pay your closing costs into your loan

Your lender may offer to pay the seller closing costs at closing and add it to your mortgage. However, it comes with a price. The lender may charge you a higher interest on the loan, which now also includes the closing cost.

5. Negotiate realtor fees

While traditional real estate agents usually charge 6% of the sale price as commission, this number is not set in stone. You can negotiate the fee with your realtor.

6. Ask the buyer to cover seller closing costs

Buyers may agree to cover closing costs for sellers if the market is competitive and fewer houses are in the market. Alternatively, you can raise the listing price to cover full or partial closing costs.

» How Much are Closing Costs for Buyer in Hawaii: Find out more about the typical buyer closing costs in Hawaii before deciding on seller credits.

Seller Closing Costs Calculator Hawaii

Closing costs vary heavily according to location and mortgage rates. Houzeo’s Closing Costs Estimator is a free tool that factors in these elements to help sellers and buyers estimate their closing costs. It shows the user a detailed list of itemized costs and highlights junk costs that can be avoided.

All the sellers have to do is enter their property location, home sale price, mortgage payoff, seller agent commission, and buyer agent commission in the Home Sale Calculator and find out how much closing costs they will have to bear.

The Seller Closing Cost Calculator even gives sellers an estimate of their home inspection fee and home warranty fee. With the help of this home sale proceeds calculator, sellers can find out their home equity and be prepared for closing.

» Estimate Seller Closing Costs Calculator Hawaii: Check your closing costs now!

How Should I Prepare for My Hawaii Home Closing?

Your closing agent will schedule a date for your closing. They will also speak with third-parties like HOA, Hawaii home inspector, and buyer agents. Here’s how to prepare for your closing day.

1. Review Your Closing Documents in Advance

Closing documents should generally be available to you in advance of the scheduled date of closing. Review these documents at length and understand their provisions. Here are some key documents you’ll likely sign at closing:

The HUD-1 or Closing Disclosure

If the buyer is taking out a mortgage to purchase a house in Hawaii, they will get the closing disclosure summarizing the costs in detail. These documents detail the fee being charged, your loan payoffs if any, and the net proceeds you will get from the bank.

Remember, depending on how much equity you have in the property, you might be asked to bring a check (or send a wire) on the closing date. Ensure there are no typos in your name, address, property address, bank info, and other details. After that, review every amount and the totals to ensure there are no mathematical errors or inadvertent costs. You’ll be surprised how many times these documents have errors.

» Hawaii Sellers Disclosure NoticeTake an in-depth look at the seller disclosure requirements in Hawaii.

The Deed

This document enables the legal transfer of the title from the seller to the buyer. Read this document carefully, verifying all details, including the legal description of the property, the deed book, the deed book page, and the Property Identification Number (PIN), if any.

In fact, we know of a case where a home seller sold a $94,000 property, but the deed also legally transferred the 5 other homes they owned worth $680,000 to the buyer. There was a huge scramble post-closing to correct this mistake. It could have been a nightmare for the seller if the buyer didn’t honestly transfer the rest of the properties back to them.

Statement of Closing Costs

This statement summarizes all the expenses involved in the transaction. This document is easier to understand vs. the HUD-1/Closing Disclosure, but they should tie.

Certificate of Title

This document allows you to state that you have the right to sell the property.

2. Ask Questions

If this is your first time selling a house in Hawaii, schedule an appointment with the closing agent before the date of the closing. Prior to that appointment, do your research and ask clarifying questions on anything you have doubts about.

3. Bring TWO Forms of Official ID

There will likely be a licensed notary involved to verify your identity. Take a valid driver’s license or passport for ID. Carry a secondary ID as well, just in case.

Conclusion: Seller Closing Costs in Hawaii

When you’re thinking about how to sell your home in Hawaii, developing an understanding of closing costs is important for you as a seller, as it can greatly impact your profits. Additionally, It is best to account for closing cost percentage in Hawaii before determining the listing price.

Now you’re ready! You might’ve heard horror stories of people being blindsided by high closing costs in Hawaii- but that’s often the result of not preparing and educating themselves ahead of time. If you are a Houzeo HI FSBO seller, we want you to be one of the most well-informed home sellers out there. Next step, log on to and list your home for sale by owner. You’ll be in full control of your listing and save thousands in the process!

Frequently Asked Questions

1. How long does it take to close on a house in Hawaii?

Closing typically takes 35 days in Hawaii.

2. Can you claim closing costs on taxes in Hawaii?

Yes. You can claim tax deductions on some closing costs that are considered taxes or insurance.

3. How are closing costs calculated in Hawaii?

Closing costs are a sum of specific settlement expenses. These vary according to the location, mortgage rates, and market conditions. Houzeo's closing cost estimator is a free tool you can use to get a close estimate of their settlement costs.

Selling a House in Hawaii: Everything You Need to Know

  • Who Pays for Closing Costs in Hawaii: Closing Costs in Hawaii can vary according to the type of real estate deal. Here is what you need to know!
  • Cash Buyers for Homes in Hawaii: Home sellers have lesser paperwork and inspections when selling their houses to cash companies. We have ranked the best cash home buyers near you.
  • Sell My House Fast Hawaii: Know How to Sell Your House Fast in Hawaii.
  • Selling House As Is in Hawaii: Selling a house “as is” is the best option for home sellers who want to save time and money. Here is a handful of information that you need to know beforehand.
  • Low Commission BrokerIf you want to save money on commissions while still receiving ongoing assistance and support, consider using a low commission broker.
  • Hawaii Multiple Listing Service: Learn about Flat Fee MLS and companies that offer the best services near you. Here’s our detailed blog on the top Flat Fee MLS companies in Hawaii.
  • Housing Market Predictions 2023 Hawaii: Read further to know more about housing market trends in Hawaii.

Additional Resources

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