Buying or selling your Maui home - understanding closing costs
When it comes to a Maui real estate sale, buyers and sellers often want to know what are the costs involved. Who pays for what? What will the charges amount to? Do I need to bring extra money to the table? I always like to get an estimate from escrow to provide to my clients, way ahead of the closing date. Once we know the sale price and other important details, this can be provided quickly.
These are the customary closing costs which are handled and prorated during escrow. There may be other costs which arise that will be agreed upon by both parties.
Charges to buyer if applicable
- 40% of the premium for standard coverage title insurance
- cost of drafting mortgage and note or agreement of sale
- cost of obtaining Buyer's consents
- all recording fees except documents to clear Seller's title
- 50% of escrow fee
- condo and association ownership transfer fees
- FHA or VA discount points and any mortgage fees
Charges to seller if applicable
- 60% of the premium for standard coverage title insurance
- cost of drafting of conveyance documents and bills of sale
- cost of obtaining Seller's consents
- mortgage pay off and release
- 50% of escrow fee
- seller's notary fee
- cost of required staking or survey
- recording fees to clear Seller's title
- FHA or VA mandatory closing fees
- conveyance tax
- FIRPTA (federal withholding tax)
- HARPTA (state withholding tax)
Property taxes are another item to show up on your closing statement. As a seller you will probably get a prorated rebate on any prepaid property tax, unless you are in arrears, in which case you will get a charge on your closing statement. As a buyer you will probably set up an escrow account to hold enough funds to pay your property taxes when they come due. This is advisable when getting a mortgage as you won't have to come up with the whole amount when the bill arrives. Buyers who are getting a mortgage will benefit from having these costs included into their note, but they will see a line item on the closing statement to reflect this.
A seller who is behind in their HOA dues will need to pay that off with proceeds from the sale, so don't be surprised when that comes back at you.
Typically the seller also pays for the TIR, the termite inspection report, and any recommended follow up treatment if there is evidence of live termites, though it can be negotiable.
In any event, you will be in good hands with an experienced Realtor and escrow team to help you through the transaction, to help you understand every step of the way.
Buying or selling a home on Maui? That's what I do. Let me help YOU.
Call or text me 808 283-0635 ~ EMAIL
Aloha from Maui...