How Much Are Closing Costs in Kentucky? A Detailed Guide

In Kentucky, closing costs for buyers typically range from 2% to 5% of the home’s agreement value, while sellers can expect to pay 6% to 10% of the purchase price, including agency commissions. For a median-priced home in Kentucky ($206,517), buyers should anticipate paying between $4,130 and $10,325 in closing costs. Sellers, on the other hand, will face higher closing costs, ranging from $16,521 to $20,651, which includes realtor commissions that average around 6% of the selling price. Understanding these costs is crucial for both parties to budget accordingly and ensure a smooth closing process.

Key Takeaways

  • Closing costs in Kentucky typically range from 2%–5% of the home’s agreement value for buyers and 6%–10% for sellers.
  • Buyers can expect to pay around $4,130 to $10,325 for a median-priced home in Kentucky ($206,517).
  • Sellers can anticipate paying approximately $16,521 to $20,651, which includes realtor commissions.

What Are Closing Costs in Kentucky?

Closing costs are fees associated with finalizing a real estate transaction. These costs are separate from the property’s purchase price and are paid by both the buyer and the seller. Closing costs cover various services and expenses, such as appraisals, inspections, title searches, attorney fees, and mortgage-related charges. In Kentucky, closing costs can vary depending on the location, type of property, and the specific services required to complete the transaction.

Also read: Closing Costs in Iowa: Planning for the Final Expenses

Different Types of Closing Costs

For Home Buyers

Home buyers in Kentucky can expect to pay several types of closing costs, including:

  • Appraisal fees
  • Home inspection fees
  • Title search and insurance
  • Property taxes
  • Mortgage origination fees
  • Private mortgage insurance (PMI) if applicable
  • Homeowners insurance premiums
  • Transfer taxes

For Home Sellers

Home sellers in Kentucky also have to pay various closing costs, such as:

  • Real estate agent commissions (typically around 6% of the sale price)
  • Title search and insurance fees
  • Property taxes (prorated)
  • Transfer taxes
  • Attorney fees

Who Pays Closing Costs in Kentucky?

In Kentucky, both buyers and sellers are responsible for paying certain closing costs. Buyers typically pay for costs related to their mortgage, appraisals, and inspections, while sellers usually cover real estate agent commissions, transfer taxes, and prorated property taxes. However, the specific allocation of closing costs can be negotiated between the buyer and seller during the home buying process.

Who Pays Closing Costs on FSBO in Kentucky?

In a For Sale By Owner (FSBO) transaction, the seller is not using a real estate agent, which can impact the allocation of closing costs. In this case, the buyer and seller will need to negotiate and agree upon who pays for specific closing costs. However, the buyer will still be responsible for mortgage-related fees, appraisals, and inspections, while the seller will typically cover transfer taxes and prorated property taxes.

Also read: Budgeting for Kansas Closing Costs: A Comprehensive Guide

How Much Are Closing Costs in Kentucky

Closing costs in Kentucky can vary depending on the home’s purchase price, location, and the specific services required. On average, buyers can expect to pay 2%–5% of the home’s purchase price in closing costs, while sellers typically pay 6%–10%, which includes real estate agent commissions.

Home PriceBuyer Closing CostsSeller Closing Costs
$200,000$4,000 – $10,000$12,000 – $20,000
$300,000$6,000 – $15,000$18,000 – $30,000
$400,000$8,000 – $20,000$24,000 – $40,000
$500,000$10,000 – $25,000$30,000 – $50,000
$600,000$12,000 – $30,000$36,000 – $60,000
$700,000$14,000 – $35,000$42,000 – $70,000
$800,000$16,000 – $40,000$48,000 – $80,000
$900,000$18,000 – $45,000$54,000 – $90,000
$1,000,000$20,000 – $50,000$60,000 – $100,000

How Much Are Closing Costs for Buyers in Kentucky?

For a median-priced home in Kentucky ($206,517), buyers can expect to pay between $4,130 and $10,325 in closing costs. This range includes expenses such as:

  • Appraisal fees: $300 – $500
  • Home inspection fees: $300 – $500
  • Title search and insurance: $500 – $1,500
  • Mortgage origination fees: 0.5% – 1% of the loan amount
  • Homeowners insurance premiums: $500 – $1,500
  • Property taxes (prorated): Varies based on location and home value
  • Transfer taxes: $1 per $1,000 of the sale price
  • Attorney fees: $500 – $1,000

It’s important to note that these are general estimates, and actual closing costs may vary depending on the specific location, property type, and services required. Additionally, some closing costs, such as mortgage origination fees and homeowners insurance premiums, can be influenced by factors like credit score, loan type, and home value.

How Much Are Closing Costs for Sellers in Kentucky?

Sellers in Kentucky can anticipate paying 6%–10% of the home’s sale price in closing costs, which translates to $16,521 to $20,651 for a median-priced home. A significant portion of these costs is attributed to real estate agent commissions, which are typically around 6% of the sale price. Other seller closing costs include:

  • Real estate agent commissions: Typically 6% of the sale price, split between the buyer’s and seller’s agents
  • Title search and insurance fees: $500 – $1,500
  • Property taxes (prorated): Varies based on location and home value
  • Transfer taxes: $1 per $1,000 of the sale price
  • Attorney fees: $500 – $1,000
  • Mortgage payoff and prepayment penalties (if applicable): Varies based on the remaining loan balance and terms
  • Home warranty (optional): $300 – $600
  • Repairs or credits negotiated with the buyer: Varies based on the condition of the property and the negotiation process

It’s essential to keep in mind that these are general estimates, and actual closing costs may vary depending on the specific location, property type, and services required. Additionally, some closing costs, such as real estate agent commissions and negotiated repairs or credits, can be influenced by factors like market conditions, property condition, and the negotiation process between the buyer and seller.

Factors Impacting Closing Costs in Kentucky

Several factors can influence the total amount of closing costs in Kentucky, such as:

  • Home price: Higher-priced homes will generally have higher closing costs.
  • Location: Closing costs can vary by county and city within Kentucky.
  • Type of loan: Different mortgage types (e.g., conventional, FHA, VA) may have varying closing costs.
  • Negotiation: Buyers and sellers can negotiate the allocation of certain closing costs.
  • Service providers: Costs for services like appraisals, inspections, and title searches can differ depending on the provider.

Tips for Reducing Closing Costs

  • Shop around for competitive rates on services like appraisals and inspections
  • Negotiate with the other party to split or cover certain costs
  • Ask your lender about discounts or promotions for closing costs
  • Consider closing at the end of the month to reduce prorated interest
  • Review the closing disclosure carefully to catch errors or unexpected fees
  • Look for grants or assistance programs that may cover some costs
  • Consider a no-closing-cost mortgage, but be aware of higher interest rates
  • See if the seller is willing to pay a portion of the costs
  • Choose a title company that offers competitive rates and discounts
  • Save on homeowners insurance by shopping around and bundling policies

How to Avoid Paying Closing Costs When Buying a House

While it’s not always possible to avoid paying closing costs entirely, buyers can take steps to minimize their out-of-pocket expenses:

  • Negotiate with the seller to cover a portion of the closing costs as part of the sale agreement.
  • Look for mortgage lenders offering low or no closing cost options, although these may come with a higher interest rate.
  • Consider asking for a gift from family members to help cover closing costs, following the lender’s guidelines for down payment gifts.
  • Explore down payment assistance programs and grants that may also cover some closing costs for eligible buyers.

Also read: Idaho Closing Costs: Budgeting for Your Home Purchase

How to Calculate Closing Costs

To calculate your estimated closing costs in Kentucky, follow these steps:

  1. Determine the home’s purchase price.
  2. Multiply the purchase price by 2%–5% for buyers or 6%–10% for sellers to get a rough estimate of closing costs.
  3. Consult with your real estate agent, lender, and other service providers for more specific cost estimates based on your unique situation.

It’s essential to keep in mind that these are general estimates, and actual closing costs may vary depending on the factors mentioned earlier.

Steps to Prepare for Closing

  • Review the closing disclosure or settlement statement for accuracy
  • Gather necessary documentation (ID, proof of insurance, outstanding paperwork)
  • Transfer utilities to the new owner’s name, if applicable
  • Schedule a final walk-through of the property
  • Obtain a cashier’s check or arrange a wire transfer for funds due at closing
  • Confirm the date, time, and location of the closing with all parties
  • Prepare any questions you may have for your agent or lender
  • Bring a valid government-issued photo ID to the closing
  • Review and sign all necessary documents
  • Receive the keys to your new home (for buyers)

How to Find a Trusted Real Estate Agent

  • Ask for referrals from friends, family, or colleagues
  • Research online reviews and ratings for local agents
  • Look for agents with experience in your desired location and property type
  • Check for proper licensing and professional affiliations
  • Interview multiple agents to find the best fit
  • Ask about their marketing strategies and network
  • Inquire about their communication style and availability
  • Look for an agent who listens to your needs and preferences
  • Consider their knowledge of the local market and trends
  • Trust your instincts and choose an agent you feel comfortable with

Conclusion

Closing costs are an essential consideration for anyone buying or selling a home in Kentucky. By understanding the different types of closing costs, how much they typically amount to, and who is responsible for paying them, buyers and sellers can better prepare for the financial aspects of their real estate transaction. Working with trusted professionals, such as real estate agents and lenders, can help ensure a smoother closing process and potentially minimize out-of-pocket expenses.

Frequently Asked Questions (FAQ)

Who pays the most closing costs?

In Kentucky, sellers typically pay more in closing costs than buyers. Sellers can expect to pay 6%–10% of the home’s sale price, which includes real estate agent commissions. Buyers, on the other hand, usually pay 2%–5% of the purchase price in closing costs, covering expenses such as appraisals, inspections, and mortgage fees.

Who Pays Property Taxes at Closing in Kentucky?

In Kentucky, property taxes are typically prorated between the buyer and seller at closing. The seller is responsible for paying the property taxes up to the date of closing, while the buyer pays the taxes from the closing date forward. The exact amount each party pays depends on the closing date and the property tax due dates.

Who Pays the Most Closing Costs?

Sellers generally pay more in closing costs than buyers. While buyers typically pay 2%–5% of the purchase price, sellers often pay 6%–10% of the sale price, which includes real estate agent commissions. However, the exact distribution of closing costs can vary depending on the terms of the sale and negotiations between the buyer and seller.

How Much Are Closing Costs in Ohio?

Closing costs in Ohio are similar to those in Kentucky. Buyers can expect to pay 2%–5% of the purchase price, while sellers typically pay 6%–10% of the sale price, including real estate agent commissions. For a median-priced home in Ohio ($177,000), buyers may pay $3,540–$8,850, and sellers may pay $10,620–$17,700 in closing costs.

Who Pays New York Closing Costs?

In New York, both buyers and sellers pay closing costs. Buyers typically pay 2%–5% of the purchase price, which includes mortgage fees, appraisals, and inspections. Sellers usually pay 8%–10% of the sale price, covering real estate agent commissions, transfer taxes, and attorney fees. New York has some of the highest closing costs in the nation due to high property prices and state-specific fees.

Razib

Razib is a skilled writer with 5 years of experience specializing in technology, finance, automotive and real estate. A BBA graduate from 2014, Razib's passion for these industries shines through in his informative and engaging content. His ability to break down complex topics and stay current on the latest trends makes him a valuable resource for readers seeking to understand these dynamic fields.

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