The Cats were in front by 19 points when substitute Josh Caddy kicked a goal at the seven-minute mark of the final term, but were overrun late in the game, the Hawks booting the final three goals to win by five points.
After 11 straight losses to the Cats, the Hawks ended the so-called 'Kennett Curse' to put themselves in next week's decider against Fremantle or the Sydney Swans.
Selwood said the Hawks got there by playing "better for longer", and that the Cats would take some important lessons from the result.
"I might sound like a bad loser in saying this, but they've pinched it," Selwood said.
"We've pinched a few off them in the time, and it's hard to take.
"We played our hearts out and we were exhausted by the end. Good on them for playing out the four quarters; we just couldn't do it today."
Selwood, his right eyebrow still stitched from last week's win over Port Adelaide, was a picture of disappointment and exhaustion in the rooms post-match.
While a brown and gold party raged next door before the Hawks went into Grand Final planning mode, the Cats were sombre, with many staying behind closed doors with their loved ones patiently waiting for them outside.
Selwood said the Cats wouldn't blame the fact the Hawks had a week off and they didn't, or put their win down to extra motivation caused by the 'curse'.
"You can write what you want. I think they played better for longer. That's finals for you," he said.
"We ran the ball really well in the third quarter, and in the fourth quarter we couldn't quite do the same.
"It's probably how we used the ball in the last quarter a little bit."
There were plenty of positives for the Cats in the last three games.
The likes of Steven Motlop and Cameron Guthrie showed they're not out of place on the finals stage, while Caddy – after hurting his ankle in the qualifying final against Fremantle two weeks ago – was impressive as the substitute.
Selwood said as a rule, the Cats didn't look at ages and expected such players to stand up in September, but was impressed they all performed as they did.
"All year we've been finding them. Motlop, Guthrie, [Allen] Christensen has taken another step. I thought [Mitch] Duncan was good tonight," Selwood said.
"[Caddy] was good, I thought. It was good to have him around the ball, some fresh legs and a strong body.
"We bought him down here for a reason. We didn't expect him to be a star in his first year, but we expect him to be a very good player and he's well on his way.
"They're kids, they've got bright futures. We expect them to play the right way and they did that.
"I'm super proud of the group.
"We've got to learn from tonight and never let it happen again."
