Unlike many states that use the county sheriff to conduct and complete foreclosure sales, the Commonwealth of Kentucky has created a quasi-judicial position, master commissioner, to advertise and conduct sales and prepare resulting deeds.
Each county has a designated master commissioner appointed by that county’s Circuit Court judge(s). To help finance this position, the Courts of Kentucky Administrative Office has established a substantial fee structure for foreclosure sales payable by the foreclosure plaintiff. The fee structure can be found in KY AP Part IV, Section 8, and breaks down as follows for the final bid:
- 3 percent of the final bid; no less than $400 and no more than $5,000
- An additional $650 for each additional parcel if multiple parcels are sold;
- If the property is withdrawn prior to sale, 50 percent of the fees assessed had the property been sold at its appraised value or $400, whichever is greater.
A relatively common sale/appraisal price on foreclosure houses in Kentucky is $100,000. A property that sells for $100,000 would incur a sale fee of $3,000. Note that costs vary from case to case and county to county and include copies, postage, and advertising.
A portion of these fees must be paid even if the sale is not completed. The amount due in this case depends on the sale cancellation timing and/or the appraised property value. For example, once judgment is entered and a sale date is set, the plaintiff is responsible for $400 in fees if the sale is withdrawn. If the withdrawal occurs before the property is appraised, that is the cancellation fee limit. However, if the property has been appraised before sale cancellation, the plaintiff is responsible for 50 percent of the sale fee had the property sold at appraised value. In other words, if the property appraises at $100,000 and the sale is cancelled, the master commissioner fees would total $1,500. If the property were withdrawn twice before selling, master commissioner fees totaling $6,000 would be incurred. This situation is not uncommon, and each cancellation can substantially increase the costs of foreclosure.
Clearly, setting and cancelling sales can be quite costly.
There are certain situations where, by law, a sale must be cancelled. However, in situations where the cancellation is voluntary, the costs of cancellation should be considered when the final decision to cancel is made.