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Buying or selling a home in Kentucky comes with various financial responsibilities, including closing costs. Whether you're a buyer or seller, understanding who is responsible for closing costs can help you better plan for the final stages of your real estate transaction. This comprehensive article explores who pays closing costs in Kentucky, breaking down the various categories, who covers what, and how much it typically costs. With the most up-to-date information available, we'll also offer an updated closing costs calculator and provide you with the latest figures for 2025.
Who Pays Closing Costs in Kentucky: Sellers or Buyers?
One of the most common questions when entering a real estate transaction in Kentucky is: who pays the closing costs? The simple answer is that both buyers and sellers have a share of the responsibility, but who pays what can vary based on several factors. Typically, buyers are responsible for a large portion of the closing costs, but sellers also contribute. Here's a breakdown of what you can expect in a Kentucky real estate deal.
# Buyer’s Closing Costs:
As the buyer, you’ll typically be responsible for most of the costs associated with closing. These can include:
- Loan Origination Fees: Lenders often charge a fee for processing and underwriting your loan. This can range from 0.5% to 1% of the loan amount.
- Appraisal Fees: The buyer typically pays for the property appraisal, which ensures the property is worth the amount you're borrowing. Appraisal fees in Kentucky typically range from $300 to $600.
- Title Search and Title Insurance: While the seller may pay for the owner’s title insurance, the buyer usually covers the cost of the lender’s title insurance and the title search.
- Inspection Fees: Home inspections are typically the responsibility of the buyer, and these can cost anywhere from $300 to $600.
- Closing Agent Fees: Buyers often pay a portion of the closing agent's fee, which can vary depending on the complexity of the transaction.
- Escrow Fees: Depending on the deal, buyers may pay for a portion of escrow services, though this can be negotiated.
- Recording Fees: Fees charged by the local government to record the transaction may also be the buyer’s responsibility.
In addition to these standard fees, buyers may face additional costs such as homeowners’ association (HOA) fees, property taxes, and homeowners’ insurance premiums, all of which may need to be paid at closing.
# Seller’s Closing Costs:
Sellers also have closing costs to contend with, though they typically cover a smaller portion compared to buyers. On average, sellers in Kentucky pay about 3.05% of the home’s purchase price in closing costs, although this can vary based on several factors. Some of the costs sellers are likely to pay include:
- Real Estate Agent Commission: The largest single cost for sellers, this is typically 5% to 6% of the sales price, split between the buyer’s and seller’s agents.
- Title Insurance: In Kentucky, the seller often pays for the buyer’s title insurance. The cost of this insurance depends on the property’s value, but it typically ranges from $1,000 to $2,000.
- Repairs and Concessions: Sellers may need to pay for repairs if issues are discovered during the buyer’s home inspection. Additionally, sellers may provide concessions, such as covering a portion of the buyer’s closing costs, as a negotiating tactic.
- Property Taxes: Sellers will generally pay property taxes up until the day of closing. If the buyer takes possession of the home in the middle of the year, taxes will often be prorated.
- Mortgage Payoff: If the seller still owes money on their mortgage, the remaining balance will be paid off at closing, often resulting in additional fees or penalties.who pays closing costs in kentucky
- Transfer Taxes and Recording Fees: Some counties in Kentucky charge a real estate transfer tax or recording fees, which the seller is responsible for paying.
# Negotiation and Local Customs:
Although the division of closing costs in Kentucky generally follows the patterns outlined above, these costs are negotiable. In a seller’s market, sellers may be less inclined to offer concessions and may push for buyers to cover more of the closing costs. In contrast, in a buyer’s market, sellers may offer to cover some or all of the buyer’s closing costs to sweeten the deal.
Seller Closing Costs in Kentucky: 2025 Update
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who pays closing costs in kentucky - How Much Are Closing Costs in KY?
