Buying Advice

Who Pays? Buyer & Seller Costs

It’s going on 18 years since my baby-doll Faith Makanalani was born. Of course, I think she’s amazing. It’s not just her beautiful blonde hair but the strength of her character, her strong confidence and her incredibly soft heart that continue to amaze me. It’s hard to believe that when she was born, Chris and Mealoha decided they did not want to know if their baby was going to be a boy or girl. The concept is hard for me because surprises aren’t welcomed in my line of work.

How Much?

I can assure you that when it comes to selling property, most buyers and sellers want to know ahead of time what their costs will be. Traditionally, buyers and sellers share the costs of transferring property. Realistically, almost every cost is negotiable but the rule of thumb is, “he who benefits pays.” Here’s how the logic works.

For Pests?

Take, for example, the termite inspection. The inspection is negotiable, but many lenders still require proof that the home is free of Hawai`i’s hungriest pest. Even if the buyer’s lender requires the report, termites are the proud possession of the seller, so the seller is generally expected to pay for that inspection along with any required treatment. Sellers need to assure buyers that the house is free of their termites, so seller benefits because they are getting rid of unwanted “guests.”

For Title?

Applying this type logic to the “benefit test” seems to help when attempting to sort through the laundry list of charges which accrue. Title insurance is a shared cost with the seller normally paying 60%. Title insurance transfers the risk of loss resulting from unknown or undisclosed title issues from the property owner to the title insurance company, thereby releasing the seller from liability related to title issues. Buyer benefits because their interests are protected. Charges for the escrow company handling the property transfer details are normally shared 50-50. Sellers generally pay the commissions.

Other Costs?

Remember, there are normally no up-front costs for selling a home. Commissions, survey costs, termite inspections, even tenting are normally deducted from seller’s proceeds. Buyers pay for drafting their own mortgages and for loan fees unless the seller specifically agrees to contribute toward some of these.

Our purchase contract contains a sample list of other possible charges. Each transaction differs slightly but your agent should provide you a detailed cost estimate specific to your situation. And, even though I thought no belated Christmas present could be as good as Faith, after 10 grandchildren, I’ve learned to accept that some surprises can be perfect…. none, however, have to do with real estate.

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Remember to join us online for our next Real Estate Wine’d Down. You know the drill, just email me or Ash for an invite! Check out our Facebook page for Ryan’s Wine of the Week from Kadota Liquor!

About the Author

Denise Nakanishi

Denise Nakanishi is a REALTOR Broker with Hawai'i Life. Denise Nakanishi is one of Hilo's most acclaimed real estate agents. She reached the rank of Major in the US Army and is now known by many as "Major Mom." The nickname fits–not only does Denise bring the discipline and mission-oriented attitude you'd expect, she's also caring and compassionate, always looking out for her clients like they're her own family. Having made the Big Island her home since 1987, Denise combines her extensive knowledge of the area with a sharp focus on customer service and the results speak for themselves. She's the recent recipient of the Best East Hawai`i, Best of Zillow, Chairman's Circle Award, President's Circle, Top Producing Agent since 2001, and Realtor of the Year awards. Denise stays ahead of the curve because she's passionate about education–she served as Education Chair for Hawaii Island REALTORS® for many years. She's one of Big Island's best real estate resources, known for her weekly article in the Hawaii Tribune Herald. Denise leads Team Nakanishi for Hawai`i Life, who is committed to their family, work, and community. In her little time away from work, Denise is a committed runner and Grandy. She also devotes many hours to various Veterans' Organizations, the East Hawaii Cultural Center, and the Hawaii Island REALTORS®. You can email me at or via phone at (808) 936-5100.

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