Buying a home in Kihei is exciting, but the last thing you want is a surprise at the closing table. If you are planning from the mainland or buying a second home, it can be hard to know what is normal on Maui. The good news is you can estimate most costs in advance and avoid last-minute stress. In this guide, you will learn what Kihei buyers typically pay, which items shift your total, and the steps to take so your final number aligns with your budget. Let’s dive in.
What closing costs cover in Maui
Closing costs fall into two buckets: lender costs if you use a mortgage and third-party or transaction costs. The totals vary by loan type, price point, and how your contract allocates certain fees.
Lender-related fees
- Loan origination fee
- Application, underwriting, and processing fees
- Rate lock fees and any discount points you elect to buy down the rate
- Appraisal fee
- Credit report and flood certification if required
Title and escrow
- Title search and title insurance
- Escrow or settlement fee for handling funds and coordinating closing
- Recording fees for the deed and mortgage
Inspections and reports
- General home inspection
- Wood-destroying organism or termite inspection
- Roof, pool, sewer or septic, and other specialized inspections as needed
Prepaids and reserves
- Property tax proration based on your closing date
- First-year homeowner’s insurance premium
- Prepaid mortgage interest from closing to your first payment
- Initial escrow deposits for taxes and insurance, typically 2 to 6 months depending on the lender
Government and county charges
- State and county recording fees
- Any applicable transfer or conveyance taxes per your contract
HOA-related items
- Association transfer fees
- Estoppel or resale certificate fees
- Prorated HOA dues
Miscellaneous
- Notary, courier, and wire fees
- Survey or boundary review if required
How much to budget in Kihei
A helpful rule of thumb for Maui buyers is to set aside about 2% to 5% of the purchase price for closing costs on financed purchases. Cash buyers are usually on the lower end since there are no loan fees.
- Lender fees, points, processing, and appraisal are often 0.5% to 1.5% of the price, though your lender may quote flat fees.
- Title insurance and escrow typically range from 0.2% to 0.6% of the price based on fee schedules.
- Recording fees and transfer taxes, if you are responsible for them, are generally small fixed amounts to low tenths of a percent.
- Prepaids like insurance, tax proration, and mortgage interest often total several hundred to several thousand dollars, depending on timing and premium levels.
- Inspections, surveys, and HOA estoppel fees usually run a few hundred up to a couple thousand dollars combined.
Your exact number depends on your loan program, insurance quotes, HOA rules, and how your contract allocates taxes and fees. Ask your lender for a Loan Estimate and your escrow officer for an itemized estimate early to see a realistic range for your specific property.
Maui and Kihei specifics that change the math
Hawaii conveyance and recording
Hawaii has state conveyance or transfer taxes and recording requirements. Who pays what can vary by contract and local custom. Confirm allocation with your purchase agreement and your title or escrow officer.
Maui County tax proration
Maui County has its own property tax calendar and recording fee schedule. Your taxes will be prorated at closing so each party pays only for their period of ownership. Your escrow officer will calculate this precisely once you have a closing date.
Coastal insurance and flood considerations
Many Kihei properties are near the coast. Lenders may require flood insurance if the property sits in a FEMA flood zone. Wind or hurricane coverage can also be required and can increase your first-year insurance premium and your lender’s escrow reserves.
Title and escrow practice
Hawaii relies on title companies and an escrow-centered process. Ask which title company will handle your file and request an itemized closing statement as soon as escrow opens. This helps you spot any line items that need clarification or negotiation.
Short-term rental and investment rules
If you plan to operate a short-term rental, build in time and budget for added due diligence. You may need special inspections, confirmation of permit or licensing status, and a careful review of HOA rules and county restrictions. Lenders and insurers can treat vacation rentals differently, which may change your reserves, rates, or premiums.
Non-resident buyer logistics
If you are out of state, confirm wire procedures, identification requirements, and signing logistics early. Clear instructions from escrow will help you fund on time and avoid delays.
Prepaids and reserves to expect
Prepaids are not fees for services. They are upfront funding for items that recur.
- Property taxes: You will reimburse the seller for any prepaid taxes beyond your closing date or receive a credit if you take over during a period the seller should pay.
- Homeowner’s insurance: Lenders commonly require the first-year premium to be paid at closing, along with reserves for your escrow account.
- Mortgage interest: Expect to prepay interest from the day you close through the end of that month. Your first full payment usually starts the following month.
- HOAs: Many associations charge a transfer fee and require a current dues balance at closing. You will also pay your prorated share for the month or quarter.
Inspections recommended for Kihei properties
Kihei’s tropical and coastal climate makes certain inspections especially useful.
- Termite or wood-destroying organism inspection
- General home inspection with attention to roof and moisture
- Mold or moisture evaluation if conditions warrant
- Sewer or septic inspection, plus pool inspection if applicable
These inspections help you plan for maintenance and protect your investment. They also inform any repair negotiations during your contingency period.
Timeline from offer to keys
Early in escrow
- Apply for your loan and receive a Loan Estimate within three business days.
- Ask escrow for a preliminary itemized settlement statement.
- Schedule inspections and review disclosures.
Mid-escrow
- Your lender orders the appraisal and continues underwriting.
- Obtain insurance quotes and secure an insurance binder. Share it with your lender and escrow.
- Review HOA documents and request estoppel or resale certificates as needed.
Final stretch
- Your lender issues a Closing Disclosure at least three business days before signing. Review every line item and ask questions.
- Confirm wire instructions by phone directly with your escrow officer. Follow anti-fraud protocols.
Closing day
- Send certified funds or a wire per escrow instructions and bring valid ID to signing.
- Sign final documents. Your lender funds, escrow records the deed, and you receive keys once recording is complete per local custom.
Ways to keep costs in check
- Compare loan options. Review the Loan Estimate and ask whether points are optional, how rate locks work, and what each fee covers.
- Request an itemized escrow estimate early. Use it as your working budget and update it after appraisal and insurance quotes come in.
- Shop insurance proactively. Ask about wind or hurricane endorsements and whether flood insurance is required.
- Clarify contract allocation. Confirm who pays conveyance taxes, owner’s title insurance, and HOA transfer fees to avoid surprises.
- Time your closing date. Prepaid interest changes based on when you close in the month.
- Verify wire procedures. Confirm instructions by phone with escrow and avoid last-minute changes to prevent delays.
Special situations that affect costs
Cash purchases
Cash buyers avoid lender fees, but you will still pay title, escrow, recording, inspections, and prepaids. Your total is often well below the 2% to 5% range.
Investor or non-owner-occupied loans
Lenders may require larger reserves and different terms. Insurance can also be higher. Review how these items affect your cash to close and your monthly payment.
Short-term rental properties
Expect additional due diligence, HOA compliance checks, and possible permit or licensing verification. Lenders and insurers may quote different requirements for STR properties.
1031 exchanges
These involve a qualified intermediary and added coordination. Build in extra time and expect additional escrow or intermediary fees.
Who pays what in Maui
Many U.S. transactions have the seller paying broker commissions, but your contract controls the details. Allocation for owner’s title insurance and Hawaii conveyance tax varies by agreement and local custom. Review the purchase contract with your agent and confirm with your escrow officer so everyone understands the split before you remove contingencies.
Your next step
If you want a clear, line-by-line estimate for a Kihei property, ask your lender and escrow for early numbers and then pressure-test each item. If you are comparing several condos or neighborhoods, factor in insurance requirements, HOA fees, and the potential for short-term rental rules to influence reserves and premiums. For tailored guidance and a local read on custom and costs in South Maui, connect with Christian Slocum to walk through your scenario.
FAQs
What do closing costs typically total for Kihei buyers?
- Financed purchases commonly run about 2% to 5% of the purchase price, while cash buyers usually pay less because there are no lender fees.
Which closing costs are paid upfront versus as prepaids?
- Fees for services like appraisal, title, escrow, and recording are costs, while prepaids fund taxes, insurance, and mortgage interest that will recur after closing.
How are property taxes handled at closing in Maui County?
- Taxes are prorated so each party pays only for their ownership period; your escrow officer calculates the exact credit or charge based on the closing date.
Do Kihei homes require flood or hurricane insurance?
- It depends on location and lender requirements; coastal proximity, flood zone status, and wind exposure often drive whether flood or wind coverage is required.
Who pays Hawaii conveyance or transfer taxes at closing?
- Allocation varies by contract and local custom; review your purchase agreement and confirm with your escrow officer to see who is responsible.
What documents will I see that show final costs?
- Your lender provides a Loan Estimate early and a Closing Disclosure at least three business days before closing; escrow provides an itemized settlement statement.
Can short-term rental plans affect my cash to close?
- Yes, lenders and insurers may require higher reserves or different terms for STR or investment properties, and you may have added due diligence costs.
