According to Zillow site home values, the median home in KY sold for $149,419. Here’s how you can save approximately $4,482 in commissions on an average Kentucky home by selling it For Sale By Owner on Houzeo.com
Congratulations! You’re almost done in selling your property. All you need to do is prepare, process the legal documents and sign them. Sure, closing on a Kentucky home can be frustrating undertaking, but if you know what and how to do, it can be one of the most rewarding experiences you’ll have. Kentucky is one of the most expensive states when it comes to closing costs. Several regulations make it a tedious state.
As a Houzeo For Sale By Owner (FSBO) seller, we expect you to go to your closing prepared. Our comprehensive Kentucky Home Seller Guide will help you accomplish exactly that.
In this section, we’ll discuss the key documents and expenses you need to be aware of when closing on a home in Kentucky.
What Are the Different Home Seller Closing Costs in Kentucky?
1. Mortgage Payoff: Usually depends on lender to lender (typical cost range between $200 to $400). One of the biggest items on your list of fees, it’s the remaining balance or prepayment penalty on your property at closing. This may include the principal balance, recording fee, or any penalty that the lender might charge you.
2. Real Estate Broker Commissions: In Kentucky, the average real estate commission is approximately 6% of the home’s final sales price—usually divided to the listing agent and to the buyer’s agent. Although the deal is negotiable, as it also varies greatly with the level of service you need. If you’re selling FSBO via Houzeo, Congratulations… You’ve likely saved thousands by paying $0 in listing agent commission! Go on. Pop a bottle of the finest Champagne or Scotch. You deserve it.
3. State, County, and City Transfer Taxes or Stamps: Also known as the deed stamps, the seller is responsible for this fee—to transfer the property title to the buyer. In Kentucky, they charge a rate of $0.50 for every $500 of the property’s value.
4. Real Estate Attorney Fees: The real estate attorney is in charge to prepare the deed and deliver to the new homeowner, the fee may cost at $150 to $500 depending on the level of service or the attorney’s experience. And usually, it also varies entirely of the amount of work and what type of home is being sold. Your attorney’s responsibility is to legally assist you in any way possible, to ensure the success of your sale, and avoid any lawsuits.
5. Escrow Closing Fees. Most homeowners hire a third party or a mortgage lender for managing and paying real estate taxes, homeowners’ insurance, and even fire and flood insurance. The typical fee would be a one-year advance and two months’ worth of homeowner’s insurance.
6. Title Insurance. An indemnification to protect the buyer from possible title issues. Title Insurance is usually paid by the seller and the cost about 1 percent of the home’s sale price. That’s why any title issues—liens, defects, loans, etc.—should be immediately resolved prior to signing.
7. Title Search. It’s an examination of the property title to avoid any issues or liens that should be settled prior to closing. The fee would range from $150 to $200.
8. Home Inspection: (average cost of $150-400) Some lenders want to perform a property inspection to ensure the house is in good condition. If you want to examine the HVAC system, interior plumbing, basement, and other structural components, you’ll likely need to pay a fee.
9. HOA Dues, Document Fees, and Transfer Fees: These include HOA dues, a document fee at the beginning of Escrow, and a transfer fee at the end of Escrow. For more information about HOA in Kentucky, you can check this website.
10. Other fees include Home Appraisal ($450-$650), Credit Report ($20-$50), PMI Premium (for a home with a low down payment), Home Staging, Water Bills, Condominium Fees, etc.
How Should I Prepare for My Kentucky Home Closing?
Your closing agent will schedule a date for your closing. Remember to consult your agent or attorney during home closing. And all the documents and legal paperwork must be reviewed thoroughly.
1. Review Your Closing Documents in Advance.
It’s necessary to prepare and review your closing documents beforehand. Read them with care and understand the provisions and regulations declared in the deed, contract, or record. Here are some of the following vital documents that you will likely to sign during home closing.
The HUD-1 or Closing Disclosure: This form must be supplied to the borrower at least 3 days before the closing. Most Kentucky homes are purchased with a mortgage. If this is the case on your transaction, you’ll get the Closing Disclosure summarizing the costs in detail. If your transaction is all cash, you may get the HUD-1, although this is less common.
These documents detail amounts you’re being charged for (all fees including taxes, insurance, escrows, credits, etc.) Remember, depending upon how much equity you have in the property, you might be asked to bring a check (or send a wire) on the closing date. Ensure there are no typos in your name, address, property address, bank info, and other details. Then review every amount and the totals to ensure there are no mathematical errors or inadvertent costs. You’ll be surprised how many times these documents have errors – this is one of the reasons our founder launched Houzeo.
The Deed: This document enables the legal transfer of title from the seller to the buyer.
Review the document if there’s a mistake. Read and verify the details carefully, together with your real estate attorney, including the legal description of the property, the deed book, deed book page, and the Property Identification Number (PIN), if any.
We know of a case where a Seller sold a $94,000 property, but the deed also legally transferred over the Seller’s 5 other homes worth $680,000 over to the Buyer. There was a huge scramble post-closing to correct this mistake. It could have been a nightmare for the Seller if the Buyer didn’t honestly transfer the rest of the properties back to the Seller.
2. Ask Questions.
If you have any doubts, remember to ask a question. In cases such as legal issues, you have to contact your real estate attorney for advice or opinion. Before the appointment, make sure you have prepared the documents and all the necessary things to bring.
3. Bring Two Forms of Official I.D.
Before the closing, bring with you your valid driver’s license or passport for identification purposes. Don’t also forget to bring a secondary I.D. as well for emergency reasons—or in case something came up. There will likely be licensed notary involve who will need you to legally swear your identification.
Now you’re ready! You might’ve heard horror stories of people being blindsided by high closing costs in Kentucky– but that’s often the result of not preparing and educating themselves ahead of time. If you are a Houzeo For Sale By Owner Seller in Kentucky, we want you to be one of the most educated home sellers out there. Next step, log on to Houzeo.com and list your home for sale by owner. You’ll be in full control of your listing, and save thousands in the process!
Note: This is only a quick guide for all the sellers in Kentucky. Despite most information readily available online, seeking expert advice helps progress the process of selling a home.
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