✏️ Editor’s Note: Realtor Associations, agents, and MLS’ have started implementing changes related to the NAR’s $418 million settlement. While home-sellers will likely save thousands in commission, compliance and litigation risks have significantly increased for sellers throughout the nation. Learn how NAR’s settlement affects home sellers.
Congratulations! You are in the final stretch! However, the joy of finalizing the real estate deal brings with it the stress of financial planning. Closing costs in Kentucky are a sum of expenses you should plan for when buying or selling a house.
Key Takeaways
- Closing costs or “settlement costs” are a set of final expenses paid for completing a real estate transaction.
- The seller and the buyer both pay closing costs in Kentucky.
- The 3 major Seller Closing Costs in Kentucky are:
- 1. REALTOR Fee
- 2. Recording Fee
- 3. Escrow Fee
- The 3 major Buyer Closing Costs in Kentucky are:
- 1. Loan Origination Fee
- 2. Escrow or Impound Account
- 3. Appraisal Fee
- In Kentucky, real estate transactions are usually closed by escrow agents and title companies.
💰 CLOSING COST CALCULATOR KENTUCKY
What are Closing Costs in Kentucky?
Closing costs in Kentucky are a sum of fees that have to be paid to different stakeholders. Closing costs are essential for finalizing the real estate deal and transferring the ownership of the house. These settlement costs are paid in addition to the net property amount.
Who Pays Closing Costs in Kentucky?
Both the buyer and seller pay certain closing costs at the end of the real estate transaction in Kentucky.
The seller shells out a higher monetary amount as closing costs as they pay the REALTOR commission. Other fees, like documentation charges, transfer fees, etc., are paid by the buyer.
Some closing costs are negotiable, while others are non-negotiable, like taxes charged by your state or local jurisdiction.
Depending upon the conditions of the Kentucky real estate market, the buyer or the seller can negotiate their share of the closing costs. For example, in a buyer’s market, the seller may have to bear a portion of the buyer’s closing costs.
Who Pays Closing Costs on FSBO in Kentucky?
While Kentucky For Sale By Owner (FSBO) property sellers do not have to pay heavy real estate agent commissions, they cannot completely escape closing costs. Some of these are:
1. Kentucky Transfer Tax
Transfer tax is charged by the state and/or municipality before the ownership is transferred from the seller to the buyer. In Kentucky, the transfer tax is imposed by the state. Kentucky real estate transfer tax is levied at the rate of $1 per $1000 of the property value.
2. Seller’s Attorney Fees
The law in Kentucky mandates the presence of an attorney for FSBO real estate transactions.
A real estate attorney guides the owner in preparing the necessary documents like Kentucky seller’s disclosure notice and drafts of other legal paperwork. On average, real estate attorneys in Kentucky charge $250 per hour.
3. Pre-listing Appraisal
FSBO sellers may have to invest in the pre-listing appraisal, as it would help them find an appropriate buyer in less time. This will, in turn, lower the number of days on the market and make the sale faster. The cost of home appraisal in Kentucky can range from $210 to $350 for a single family home.
» How to Sell a House in Kentucky by Owner: A comprehensive guide for FSBO sellers in Kentucky.
How Much are Closing Costs in KY?
The closing cost in Kentucky for sellers is approximately 8%–10% of the home’s agreement value, while the buyers are expected to pay around 2%–5% of the home’s purchase price.
Let’s put this in perspective! The median home value in Kentucky is $206,517. So, if you are selling a house in Kentucky, you may have to pay $16,521 to $20,651 as closing costs. On the other hand, if you are buying a house in Kentucky, your closing costs may range between $4,130 to $10,325.
How Much are Closing Costs for Sellers in KY?
As mentioned above, when calculating the cost of selling a house in Kentucky, you will have to factor in some closing costs to transfer the house ownership to the buyer legally. These costs include several fees that need to be paid over and above the net price of the property.
Some seller closing costs are negotiable. Real estate agents usually have information about who pays what at closing and can help you save on closing costs.
Here are some of the prime seller closing costs in Kentucky.
1. REALTOR Fees Kentucky
The seller pays real estate commissions to both the listing agent and the buyer’s agent. The real estate commissions in Kentucky usually amount to 5%-6% of the agreement value. On average, a seller has to pay $11,400 as realtor commission in Kentucky.
» What is the Average Real Estate Commission in Kentucky: Check out the average Realtor commission in Texas
2. Recording Fee
The recording fee is paid by the seller to make the real estate transaction a matter of public record. Recording fee in Kentucky can range form $50 to $70.
3. Home Inspection Fee
Sellers can opt for a home inspection in Kentucky to identify any major defects and issues, like plumbing issues, water damage, mold, appliance malfunction, etc., in the house that they must resolve before selling. Home inspection cost in Kentucky is around $400-$600.
You can choose to resolve the issues found by the Kentucky real estate inspector before selling the house to avoid having to offer seller points in lieu of the cost of reparations.
The buyer can also undertake a home inspection. However, if they find undisclosed defects, it might give them the upper hand during negotiations, or they may back out of the deal.
» Selling Home As Is in Kentucky: Avoid paying the cost of home improvement by selling your house as is in Kentucky.
4. Escrow Fee
An escrow agent is an unbiased third party who helps you and the buyer complete the transaction. They clear the house for sale, transfer the ownership to the buyer, and the respective funds to the seller.
The escrow fee is the remuneration charged by the escrow agent for their services. Typically, escrow fee is 1-2% of the property value.
» Kentucky Home Seller Closing Costs: Find out the details of ALL the closing costs in Kentucky for sellers.
How Much are Closing Costs for Buyers in Kentucky?
These are the closing costs paid by the buyer while acquiring the property ownership from the seller. Like seller closing costs, these too are negotiable. Hence, hiring a buyer’s agent can help you save on closing costs.
We have listed some of the prime Kentucky closing costs for buyer.
1. Loan Origination Fees
Some mortgage lenders charge buyers a loan origination fee to execute the loan with other respective documentation and legal formalities. The loan origination fee in Kentucky usually amounts to 0.5%-1% of the mortgage loan amount.
2. Appraisal Fee
Appraisal fees are paid to the professional appraiser who assesses the home value and ensures you get the best competitive price.
The cost for home appraisal in Kentucky varies between $300 and $500, depending on the property characteristics like its actual saleable area and its geographical location.
» How Much Does an Appraisal Cost in Kentucky: The average cost of home appraisal in Kentucky also depends on the home type and loan type. Read more here.
3. Title Insurance
Title insurance protects against any type of loss with respect to any outstanding taxes, unpaid dues, default in the title, or any violations. The cost of Title policy in KY is around $200-$250.
4. Mortgage Escrow Account/ Impound Account
A part of the buyer’s monthly mortgage payments are reserved in an escrow or impound account by the mortgage lender. This reserve is maintained to pay the property tax and homeowners insurance premiums.
A mortgage servicer manages the mortgage escrow account and makes the payments on behalf of the buyer.
» How Much are Buyers Closing Costs in Kentucky: Find out ALL about what closing costs do buyers pay in Kentucky.
How are Closing Costs Calculated?
It is important to calculate closing costs while selling a house or buying one.
The estimated closing costs give sellers an idea about the home equity they will have after the sale and helps buyers find out the amount they will have to pay over and above the agreement value of the house.
» Closing Cost Calculator: Check out the closing costs calculator for calculating the closing costs for your real estate transaction.
How to Calculate Closing Costs for Seller?
Houzeo’s Home Sale Calculator helps calculate closing costs for sellers in Kentucky with a swish and a click! All the sellers have to do is enter their property location, home sale price, mortgage payoff, seller agent commission, and buyer agent commission, and voila!
The Seller Closing Cost Calculator KY gives sellers an estimate of their home inspection fee and home warranty fee. With the help of this home sale proceeds calculator, sellers can find out their home equity and be prepared for closing.
» Seller Closing Cost Calculator Kentucky: Check out the seller closing costs calculator to get an estimate of calculating the closing costs for seller.
How to Calculate Closing Costs for Buyer?
Houzeo’s Buyer Closing Cost Calculator helps calculate closing costs for buyers in Kentucky. To find the estimated buyer closing costs, the buyers have to add the property location, home purchase price, and the down payment in the buyer closing cost estimator.
The closing cost calculator for buyer gives a detailed list of the estimated closing costs for buyer in Kentucky.
Home buyers can find out everything right from origination fee, appraisal fee and survey fee to title search, attorney fee, recording fee, prepaid interest charges, escrow property taxes, and owner’s title insurance.
The Buyers Closing Cost Calculator even shows which fees have to be paid before closing and which ones have to be paid at closing while buying a house in Kentucky.
» Buyer Closing Cost Calculator Kentucky: Check out the closing costs calculator for buyer to ger an estimate of the closing costs for buyer.
Closing Costs in Kentucky for Refinance
Before we dive into closing costs for refinance, let’s look at the term refinance:
What is Refinancing?
Refinance, also called “Refi,” is nothing but replacing your current loan with one that offers a lower rate of interest. This helps lower monthly mortgage payments.
How Much are Closing Costs for Refinance?
Refinancing closing costs are the sum of several expenses paid against any services that were used in the process of underwriting and closing on your mortgage loan, which makes up 3%-5% of the mortgage amount.
The closing cost for refinancing would vary with respect to the property’s location.
Junk Closing Costs to Watch Out For
Junk costs are the additional costs that are imposed by the mortgage lender. These are usually excessive but can be challenged and negotiated for a fairer price. Some of these are:
- Application Fee: The buyer pays this fee to the lender when applying for the mortgage. Not all lenders charge an application fee.
- Loan Processing Fee: This fee is charged by the lender to execute the loan once it has been approved. Borrowers can negotiate for these charges to be waived.
- Mortgage Rate Lock Fee: This fee is a guarantee that the lender will honor the pre-agreed interest rate for a said amount for a set period.
- Underwriting Fee: Mortgage underwriters charge an underwriting fee to evaluate and verify loan applications. It is a non-recurring fee. Some lenders charge it in place of the originating fee, while others charge it in addition to the same.
- Courier Fee: A fee of $20-$50 is typically charged in order to cover the courier transactions.
Note: The costs vary by region.
Conclusion
The closing cost of selling a house in Kentucky is the mandatory fee that needs to be paid by the seller & the buyer. This is paid over and above the mortgage loan amount. Where the buyer pays 2%-5% and the seller pays 6%-10% against their share of the closing cost.
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Houzeo’s customer-centric approach, advanced technology, and flat fee packages make it an ideal choice for those looking to avoid paying high commissions and closing costs.
» Houzeo Reviews: Check out Houzeo.com’s reviews before listing your house!
Find Your New Home With Houzeo
With thousands of property listings, Houzeo.com is one of the biggest property listing sites in the US. Find condos, townhouses, co-ops, and other types of homes for sale in Kentucky on Houzeo.
» Need More Clarity? Read these exclusive Houzeo reviews and learn why the platform is the best in America’s competitive housing market.
Frequently Asked Questions
1. How much are closing costs in Kentucky?
The closing cost in Kentucky for buyers are approximately 2%–5% of the home’s agreement value. While the sellers are expected to pay around 6–10% of the home’s purchase price. For sellers, that includes the agency commission too.
2. How much are closing costs in Kentucky for buyer?
The buyer closing costs are the charges paid by the buyer while acquiring the property ownership from the seller. These charges included several fees that need to be paid over and above the agreement amount and are negotiable too. Hence, you would need the best listing agent that would benefit you in this deal.
3. How much are closing costs in Kentucky for seller?
The seller closing costs are the charges paid by the seller while transferring the property ownership to the buyer. These charges included several fees that need to be paid over and above the agreed amount and are negotiable too. Hence, you would need the best listing agent that would benefit you in this deal.
4. Who pays transfer tax in Kentucky?
Typically, the seller pays the real estate transfer tax in Kentucky.
Also Read
- Kentucky MLS Listing: Flat Fee MLS companies in Kentucky can help you save thousands on commission fees. Read our curated list of the best companies near you.
- Who Pays Closing Costs in Kentucky Buyer or Seller: Check out the blog to know who pays the closing costs in Kentucky for different types of real estate deals.
- Cash For My House in Kentucky: Companies that buy houses for cash in Kentucky ensure fast closings and offer instant cash deals. Who’s the best real estate cash buyer in 2023? Read on!
- Kentucky Housing Market Forecast: Find out whether the housing market in Kentucky is a seller’s market or a buyer’s market.
- List of Real Estate Companies in Kentucky: Here are the top real estate companies in Kentucky that can help you with all your real estate needs.
- Realtors in Kentucky: In this blog, we will help you with picking the right realtor in Kentucky.
- Low Commission Real Estate Agent: Click here to know about best low commission real estate agents.
- Selling an Inherited House in Kentucky: Sell your inherited house in Kentucky with the help of our detailed guide.
- Sell My House Fast Kentucky: Check out our tips to sell your Kentucky property quickly.
- For Sale by Owner Websites Reviews: Take a look at our reviews of the best FSBO websites.
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