What will you actually pay to close on a home in Kailua-Kona? When you run the numbers, the line items can feel unfamiliar and timing can be different from what you’ve seen on the mainland. You deserve a clear picture before you write an offer. In this guide, you’ll learn typical totals, every major cost category, Hawaii-specific nuances, what’s negotiable, and how to plan your budget with confidence. Let’s dive in.
What closing costs cover
Closing costs are the one-time fees and prepaids you pay at settlement, separate from your down payment. In Hawai‘i, buyers commonly spend about 2% to 5% of the purchase price, depending on loan type and specific choices like owner’s title insurance. On a $700,000 purchase, that range equals roughly $14,000 to $35,000.
Some costs are fixed fees, like inspections and appraisal. Others scale with the loan or price, like discount points or title insurance premiums. Your lender may also collect escrow reserves for property taxes and homeowners insurance, and you’ll prepay interest from funding to month-end.
Loan and lender fees
Origination and points
- Origination or processing: often 0.25% to 1.00% of the loan amount.
- Discount points: optional, paid to lower your interest rate; 1 point equals 1% of the loan amount.
Appraisal and credit-related items
- Appraisal: typically $500 to $1,200, with Hawai‘i often toward the higher end due to travel and availability.
- Credit report, flood certification, tax service, underwriting: usually $25 to $500 each.
Mortgage insurance and reserves
- Mortgage insurance: may apply depending on loan type and down payment.
- Escrow/impound reserves: lenders often collect several months of property tax and the first year of homeowners insurance at closing.
Title, escrow, and recording
Title insurance
- Lender’s title policy: typically required by the lender and paid by you.
- Owner’s title policy: optional but strongly recommended to protect your ownership; one-time premium based on price. Rates vary by insurer, so request Kona-area quotes early.
Escrow/settlement services
- Escrow fees cover document prep, funds handling, and coordination. Who pays can vary by island and contract. It may be split or allocated by negotiation.
Recording fees
- State and county systems handle deed and mortgage recording. Fees depend on the documents recorded. Your title/escrow team will quote the current schedule for Hawai‘i.
Taxes, prorations, and transfer items
Property tax prorations
Hawaii County property taxes are prorated as of your closing date. You may reimburse the seller if taxes were paid in advance, or receive a credit if not.
Conveyance tax
Hawai‘i charges a state conveyance tax on real property transfers. Sellers often pay by local custom, but the purchase contract controls who pays. Confirm the allocation in your offer and escrow estimate.
Special assessments
Outstanding assessments are typically prorated or paid off at closing per the contract. Your title search and association documents help identify them.
Inspections and property condition
General and specialty inspections
- General home inspection: roughly $300 to $600 depending on size and access.
- WDO/termite inspection: common in the islands and often required by lenders; usually $75 to $300.
- Roof, pool, HVAC, sewer/septic, or well inspections: typically $200 to $1,000 each, based on scope.
Septic, cesspools, and water
On Hawai‘i Island, many homes use septic systems or cesspools. Plan for septic or cesspool inspections and discuss potential upgrade obligations under state programs. If the property uses a private well, water quality testing may be recommended or required by your lender.
Condo and HOA charges
If you buy a condo or a home in an association, expect:
- Association transfer or move-in fees.
- Estoppel or status letter fees to confirm dues and assessments.
- Prorated regular dues and any applicable upfront payments.
These costs vary by association and are often in the low hundreds, excluding regular dues.
Prepaids and insurance in Kona
Lenders usually require proof of homeowners insurance and payment of the first year’s premium at closing. In certain coastal or microclimate areas, premiums can be higher for specific risks like wind or flood, and some locations on Hawai‘i Island may have unique volcanic hazard considerations. Get insurance quotes early so you can budget accurately. You’ll also prepay daily mortgage interest from the funding date to the end of the month.
Quick buyer checklist
- Lender fees: origination, underwriting, appraisal, credit report.
- Optional discount points if you buy down your rate.
- Title and escrow: title search, lender’s and optional owner’s title insurance, escrow fees.
- Recording and document fees.
- Property tax prorations and any assessments.
- State conveyance tax allocation per contract.
- Inspections: general, WDO/termite, septic/well, plus any specialty.
- HOA/condo transfer and estoppel fees.
- Homeowners insurance premium and escrow reserves.
- Prepaid interest and prorated dues or utilities.
- Miscellaneous: courier, wire, and notary fees.
Timeline and how it affects costs
In Hawai‘i, financed purchases commonly close in 30 to 45 days. Cash deals can close faster. Island logistics can extend scheduling for appraisals and specialty inspections, so build in buffer time.
Under federal rules, your lender must deliver your Closing Disclosure at least 3 business days before closing. Changes can require re-disclosure and may affect your timing. Delays can add prepaid days of interest, trigger re-inspection or re-appraisal fees, or lead to rate lock extension costs if you go past your lock period.
What’s negotiable in Kona
Some items are negotiable and can meaningfully reduce what you bring to close:
- Seller credits to cover part of your closing costs, subject to loan program limits.
- Allocation of escrow/settlement fees.
- Credits or repairs following inspections.
- Whether the seller contributes toward optional owner’s title insurance in your offer strategy.
In a competitive market, sellers may be less willing to contribute. In a slower market, you often have more room to request credits.
How to plan your budget
- Ask your lender for a written Loan Estimate early. It outlines lender fees and prepaids.
- Request a line-item estimate from a Kona-area title/escrow company for your specific property and contract terms.
- Order inspection bids as soon as you enter escrow to understand potential repair credits.
- Get insurance quotes early, especially for coastal, high-wind, flood, or unique hazard zones.
- Build a cushion. Aim for the higher end of the range if you want maximum certainty.
Work with a local advocate
Kailua-Kona transactions benefit from on-island expertise, from timing your appraisal to navigating cesspool and septic questions. With white-glove guidance and deep local relationships, you can set clear expectations, negotiate smart credits, and reach the finish line smoothly. If you’re ready to map your numbers and next steps, reach out to schedule a personal closing-cost consult with Lovette and team at [Unknown Company].
FAQs
What are typical buyer closing costs in Kailua-Kona?
- Buyers commonly pay about 2% to 5% of the purchase price, plus any optional items like discount points or an owner’s title policy.
Who usually pays Hawai‘i’s conveyance tax in Kona?
- Sellers often pay by custom, but it is contract-dependent. Confirm the allocation in your offer and escrow estimate.
How long does a financed Kona purchase take to close?
- Many financed transactions close in 30 to 45 days. Cash purchases can close faster, depending on title and scheduling.
Which inspections should I budget for in Kona’s climate?
- Plan for a general inspection and WDO/termite inspection, plus septic/cesspool and any needed specialty inspections like roof, HVAC, pool, sewer, or well.
Do I need both lender’s and owner’s title insurance policies?
- The lender’s policy is typically required by your lender. The owner’s policy is optional but strongly recommended to protect your ownership.
Why get insurance quotes early on Hawai‘i Island?
- Premiums can vary by location and property characteristics, especially for wind, flood, or unique hazards. Early quotes help you budget accurately and avoid surprises.
