Closing Costs for Buyers on Oahu: What You Pay and Who Pays What

Closing costs for buyers on Oahu are the fees you pay on top of your down payment to finish the purchase: your lender’s charges, your share of escrow and title, recording fees, and a stack of prepaid taxes, insurance and interest. The one big Hawaii tax you have probably heard about, the conveyance tax, is paid by the seller, not you.

I get this question from almost every buyer, usually right after their first Loan Estimate. Here is each cost, who normally pays it on Oahu, where the real numbers come from, and how to bring your cash to close down, with links to the official pages.

In this guide:

• What closing costs for buyers on Oahu include
• Who pays the Hawaii conveyance tax
• Escrow fees and title insurance
• Lender fees, points and your Loan Estimate
• Prepaids, your escrow account and property tax
• How to lower your closing costs
• Protect your closing money from wire fraud
• Mistakes to avoid
• FAQ
• Bottom line

What Closing Costs for Buyers on Oahu Include

Every buyer’s list depends on the loan, the property and the contract, but on Oahu it usually sorts into these buckets:

Two more items can land on your side. VA buyers have a one-time funding fee unless exempt. And how your buyer’s agent is paid is set in your written buyer agreement; VA lists that commission among the costs a buyer and seller can negotiate. I go over it with every buyer before we tour.

Your down payment is separate from closing costs but part of your cash to close. For down payment options, see my first-time home buyer guide for Oahu.

Who Pays the Hawaii Conveyance Tax?

The seller. The Hawaii Department of Taxation’s Form P-64A instructions say the person subject to the conveyance tax is generally the grantor, seller, transferor or whoever is conveying the property. It is paid to the Bureau of Conveyances within 90 days of the transaction.

The twist: the rate the seller pays depends on you. On a condo or single-family home, the higher rate schedule applies when the buyer is not eligible for the county home exemption on property tax. Under the rates in those instructions (Rev. 2025):

• Under $600,000: 10 cents per $100 if the buyer qualifies for the home exemption, 15 cents per $100 if not
• $600,000 to under $1,000,000: 20 cents per $100 if the buyer qualifies, 25 cents if not
• $1,000,000 to under $2,000,000: 30 cents per $100 if the buyer qualifies, 40 cents if not

On a $700,000 condo, that works out to $1,400 for the seller if the buyer qualifies for the home exemption and $1,750 if not. Rates climb at higher prices, so check the current schedule before relying on a number.

If you plan to live in the home, tell me early. It does not change your closing costs, and you will want to file your own home exemption after closing. I explain that in my post on the Oahu home exemption.

Escrow Fees and Title Insurance on Oahu, Explained

In Hawaii, a neutral escrow company holds the money and documents and closes the sale. Escrow companies here are licensed and overseen by the state’s Division of Financial Institutions. Your purchase contract spells out how the escrow fee is split between you and the seller, and that split is negotiable.

Title insurance comes in two policies:

• Lender’s policy. The CFPB notes that most lenders require you to buy a lender’s title policy, which protects the amount they lend. If you have a loan, plan on this one.
• Owner’s policy. This protects you. The CFPB explains it can cover you if someone later claims a right to the home from before you bought it, such as a previous owner’s unpaid taxes or a contractor who says they were never paid.

Who pays for the owner’s policy is set in the contract, and VA lists title insurance among negotiable costs. The CFPB adds that you can usually shop for title insurance separately from your mortgage, and the total is usually lower when one company writes both policies.

Recording fees are the government charges to record your deed and mortgage in the public record.

Lender Fees, Points and Your Loan Estimate

The lender section is usually the biggest chunk of closing costs and varies most between lenders. It is on your Loan Estimate, a three-page form the lender must give you within three business days of your application. It shows your estimated rate, payment and total closing costs, and every lender uses the same form, so comparing is simple. Then, at least three business days before closing, your lender must give you the Closing Disclosure, a five-page form with your final terms and costs, so you can compare it to the estimate and ask questions.

Typical lender charges include an origination fee, the appraisal, a credit report and sometimes discount points. The plain version of points, from the CFPB:

• One point equals one percent of the loan amount. On a $500,000 loan, one point is $5,000.
• Paying points gets you a lower interest rate in exchange for more cash at closing.
• Lender credits work the other way: lower closing costs now in exchange for a higher rate.

The CFPB suggests asking a loan officer to show you options with and without points or credits and comparing total cost over how long you expect to keep the loan.

VA buyers have one extra line: the VA funding fee. VA says it is a one-time fee figured as a percentage of your loan amount, and you can either roll it into the loan or pay it at closing. Veterans receiving VA compensation for a service-connected disability, and some others, do not pay it. My VA loan guide for Oahu covers the rest of the VA side.

Want to know what your cash to close will look like before you write an offer? Get your Buyer Game Plan, or call or text me at (808) 459-6450 and I will help you read your Loan Estimate line by line.

Prepaids, Your Escrow Account and Oahu Property Tax

These catch buyers off guard because they are not really fees. They are your own future bills paid in advance.

• Homeowners insurance. Your first premium is often collected at closing.
• Prepaid interest. Interest from your closing date to the end of that month.
• Escrow account deposit. A starting cushion for the account your lender uses to pay your property tax and insurance.

The CFPB describes an escrow account as one your lender sets up to pay property expenses like taxes and insurance out of your monthly payment, and it notes that many lenders require one.

On Oahu, the property tax year runs July 1 to June 30. For the tax year that started July 1, 2026, the City’s Real Property Tax Timeline shows the first half payment was due August 20, 2026 and the second half is due February 20, 2027. Escrow prorates the tax so you and the seller each pay for the days you own the home, and association dues are prorated the same way. My guide to Oahu HOA fees explains what those dues cover.

So two buyers at the same price can have very different prepaid totals just by closing in different months. That is why I never quote one flat number.

How to Lower Your Closing Costs on Oahu

You cannot make closing costs disappear, but you have real levers:

• Ask for a seller credit. A seller can agree to pay part of your costs at closing. On a VA loan, VA does not limit credits for normal loan closing costs but caps seller concessions at 4% of the home’s reasonable value. Other loan types have their own limits; ask your lender.
• Compare Loan Estimates. Get at least two and compare fees and rate together, or use lender credits if cash is tight.
• Shop title insurance. The CFPB says you can usually choose your title provider separately from your mortgage.
• Pick your closing date on purpose. It changes your prepaid interest. Ask your lender to run two dates.

Whether a seller says yes to a credit depends on the demand for that specific home, and that is a big part of how I write offers.

Protect Your Closing Money From Wire Fraud

The CFPB warns that mortgage closing scams typically start days before closing with an email that looks like it came from your agent or escrow, announcing last-minute changes to the wiring instructions.

• Save the phone numbers for me and your escrow officer at the start, and only use those numbers.
• Treat any change to wiring instructions as fake until you confirm it by calling a number you saved yourself.
• Do not call numbers or click links in an email about your wire.
• If you think you wired money to the wrong place, call your bank immediately to try to stop or reverse it, and file a complaint with the FBI Internet Crime Complaint Center.

I will never email you new wiring instructions.

Mistakes to Avoid

• Budgeting only for the down payment. Your cash to close is the down payment plus closing costs plus prepaids, minus any credits.
• Comparing lenders on rate alone. A lower rate with points can cost more at closing than a slightly higher rate without them.
• Assuming the seller pays for everything. Buyers closing remotely should read my guide to buying on Oahu from the mainland.
• Skipping the owner’s title policy without thinking it through. It is optional, but it protects you, not the lender.

This guide explains how closing costs generally work on Oahu. It is not legal or tax advice; for tax questions like deducting points, talk to a CPA, and for contract questions, an attorney.

Closing Costs for Buyers on Oahu: FAQ

Does the buyer pay the conveyance tax in Hawaii?

Generally no. The Department of Taxation’s instructions say the person subject to the tax is generally the seller or whoever is conveying the property. The rate the seller pays is lower when the buyer qualifies for the county home exemption.

How much are closing costs for buyers on Oahu?

It depends on your loan, price, lender and closing date. Your Loan Estimate shows your estimated total, and your Closing Disclosure shows the final figure at least three business days before closing.

Can the seller pay my closing costs?

Yes, if they agree to it in the contract. Each loan type has its own limit on seller concessions. For VA loans, VA caps seller concessions at 4% of the home’s reasonable value but does not limit credits for normal loan closing costs.

Do I need owner’s title insurance?

Your lender will usually require a lender’s policy. The owner’s policy is optional, but it protects you if someone later makes a claim against the home from before you bought it, such as unpaid taxes or an unpaid contractor.

Why is my escrow account deposit so large?

Your lender collects a starting balance to pay upcoming property tax and insurance bills. On Oahu, tax installments are due in August and February, so your closing month affects the amount.

The Bottom Line on Oahu Closing Costs for Buyers

As a buyer on Oahu you pay your lender’s fees, your share of escrow and title, recording fees and your prepaids, while the seller pays the conveyance tax. Your honest number comes from your own Loan Estimate, and credits and a smart closing date can bring it down. Read your Closing Disclosure the day it arrives and verify every wire by phone.

Sources

• Hawaii Department of Taxation: Instructions for Form P-64A, Conveyance Tax Certificate (Rev. 2025)
• Hawaii Department of Taxation: Conveyance Tax Forms
• CFPB: What is a Loan Estimate?
• CFPB: What is a Closing Disclosure?
• CFPB: What is owner’s title insurance?
• CFPB: How should I use lender credits and points?
• CFPB: What is an escrow or impound account?
• CFPB: Buying a home? Beware of mortgage closing scams
• VA.gov: VA funding fee and loan closing costs
• City and County of Honolulu: Real Property Tax Timeline and Important Dates, Tax Year 2026 to 2027
• Hawaii DCCA: Division of Financial Institutions

Ready to see your own numbers? Get your Buyer Game Plan, or call or text me at (808) 459-6450. I am Devin Hammack with Team Taparra at eXp Realty.