Hawaii Buyers are often perplexed as to what the closing costs associated with their real estate purchase actually are. The following line item explanations should help shed more light on what is a sometimes is a complicated aspect of the real estate purchase.
Buyer Title Insurance
This specific insurance protects a buyer in the event that liens or clouds are discovered or placed on the property after a sale. For example, title insurance would cover the legal fees associated with litigation caused by another person/entity trying to lay claim to the title of the property.
Furthermore, in Hawaii it’s a customary practice for sellers to pay for 60% and buyer to pay 40% of the buyer's selected title insurance. That includes additional costs for extended policy coverage.
Lender fees for generating and drafting your home loan.
Cost of Obtaining Buyer's Consents
Expenses buyers will accumulate in the form of inspections.
Homeowners Insurance Premium
The cost for buyers obtaining homeowners insurance.
Buyer's Notary Fees
If buyers sign their closing documents at a location outside of an escrow office they will be charged this fee.
All Government Recording Fees Except Those to Clear Seller's Title
Deed & mortgage recording at their county’s Bureau of Conveyances office typically located at or near a county courthouse.
Escrow Fee & Title Document Preparation
Buyers and sellers split this fee by 50%. Escrow and title companies are the intermediaries between buyers and sellers within an escrow. In addition to coordination between parties, they ensure both sides adhere to the executed contract. They also provide title reports, coordinate payoffs to all parties and vendors associated with a transaction, and prepare all in escrow and closing documentation.
Condominium and Association Transfer Fees
When buyers purchase a condo or home within an association they must review updated association documents to include budget, house rules, association disclosure, board meeting minutes, and bylaws, etc. These documents must be paid for by either the seller, lender, or buyer. In Hawaii, generally, the seller will cover this expense. In addition to that, homeowners associations will also charge standard transfer fees.
Sellers will generally pay for the termite inspection per the standard contract.
VA Home Loan Discount Points and/or Fees
In addition to lender points (percentage of loan amount), Buyers must pay for their independent loan appraisal, typically $650. If a buyer is using their VA loan for the first time a funding fee is required at 1.5% of the total loan amount.
Future Homeowners Association Dues & Prorated Property Taxes
Buyers will end up prepaying paying 2 months worth of homeowners association fees. Any property taxes the sellers had pre-paid will be prorated back to the sellers upon close.
Other closing costs could be included or subtracted, it just depends on your particular home buying situation.
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