9 min read Sep 14, 2022

What Are the Sellers Closing Costs in Michigan?

sellers closing costs in michigan
Important: The blog article below is informational and should not be deemed as legal advice. Houzeo and its bloggers are not attorneys. For any questions and legal advice, consult a licensed attorney.

How Much are Typical Seller Closing Costs in Michigan?

According to Zillow, the median home in MI sold for $174,704. Here’s how you can save approximately $5,241 in commissions on an average MI home by selling it For Sale By Owner on Houzeo.com

Congratulations! Although it’s not over yet, you’re now at the final process of selling a house in Michigan. That alone is worth celebrating. Closing on a home can be one of the greatest experiences as a homeowner, however, it can also be stressful alone. Most especially if you’re not well aware of what to bring and how it works. Remember, there are several real estate regulations to comply and it can be a daunting process if you’re not prepared.

As a Houzeo For Sale By Owner (FSBO) seller, we expect you to go to your closing prepared. Our comprehensive How to Sell a House By Owner in Michigan 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 Michigan.

What are the Different Closing Costs in Michigan?

Typical seller closing costs in Michigan include the following fees.

1. Mortgage Payoff: This is any remaining balance, or prepayment penalty, on your property at closing. This is the most likely biggest item on your list of fees. This includes the recording fee, principal balance, interest accrued from the last payment to the day of closing, and any penalty that the lender might charge you—this fee usually varies.

2Real Estate Broker Commissions: Although it can be negotiable, the standard commission for real estate brokers in Michigan is 6% of the home’s sales price. You can discuss this with your listing agent to negotiate and save a fortune. In that 6% total commission, the listing broker and the buyer’s agent divide this in half. For instance, however, the typical fee can be reduced as it depends on the level of service the client needs. But 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.

3Property Taxes:  These are outstanding payments, or prorated property taxes, utility bills, or homeowner’s insurance that are all tied into your property. You may need to pay the buyer a prorated amount of property taxes, or the buyer may need to credit you. 

4. Attorney Fees: The cost of hiring a real estate attorney entirely depends on the amount of work and what type of home is being sold. A real estate attorney performs crucial functions including legal works and transactions concerning a property. The average fee could amount to around $500.

5. Home Inspection: Homebuyers usually perform a home inspection to confirm the issues or defects of the property. And most lenders require this to ensure there no hidden property defects, major system problems, structural foundation issues, etc. In that way, they can negotiate for a low price if a new issue is detected. In the region, a Michigan inspection would usually cost between $200 and $400.

6. Property Survey: Home surveys in Michigan usually charge for $200 to $1,000, depending on the area. It’s performed to determine the boundaries of your plot, and so the buyer could get a land report of what they’re actually paying for or exactly what he/she can own.

7. Escrow Fees: An escrow agent or lawyer will financially manage your payments so the funds will be secured and delivered properly. It serves as a neutral third party that makes sure all lender’s requirements and sales agreements are met. The typical fee would cost between 1% and 2% of the sale price.

8. Title Insurance: Both the buyer and seller will need to pay for their title insurance that costs about $1000. But mostly it is paid by the seller to protect buyers from any issues that may arise or aren’t detected that can lead to a great financial loss.

9. HOA Dues, Document Fees, and Transfer Fees: If the property falls under a Homeowners Association, you may be subject to various other charges that have an estimated cost between $100 and $700 per month with $200 as an average. These include HOA dues, a document fee at the beginning of Escrow, and a transfer fee at the end of Escrow. Read more info at Michigan HOA Laws, Information, and Resources.

10. Other Fees: You’ll have to take into consideration other usual closing costs that can include application fee, appraisal fee, courier fee, underwriting fee, recording fee, and pest inspection fee.

How Should I Prepare for My Michigan Home Closing?

Bear in mind to review all the documents and paperwork beforehand. Typically, your closing agent will schedule a date for your closing. Here’s who to prepare for your closing day.

1.Review Your Closing Documents in Advance: Before the scheduled closing date, it’s important to prepare all your closing documents and forms. Review the document thoroughly and understand the provisions and regulations stated. Here are some crucial documents that you’ll likely to sign during closing.

IThe HUD-1 or Closing Disclosure: If your property is purchased with a mortgage, you’ll need to get a closing disclosure that summarizes the costs in detail. But if your transaction is all cash, you need to get the HUD-1 (though it’s rare to this day). 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

sellers closing costs in michigan

The Deed: (Average deed preparation costs between $150 to $200) This document enables the legal transfer of title from the seller to the buyer. Read this document carefully, verifying all details 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: Make sure you secure an appointment with your closing agent before the closing date. Review and ask questions in details of your doubts and other matters that needed to be addressed. And also, you can contact your real estate attorney for legal advice.

3. Bring TWO Forms of Official ID: There will likely be a licensed notary involved who’ll require that you swear you are who you say you are. Take a valid driver’s license or passport for ID. Carry a secondary ID as well, just in case. Here’s a quick list of what you need to bring during closing:

  • Government-issued photo identification of all sellers on the home contract
  • Any questions you have regarding your closing statement
  • The deed of your home if you own it outright
  • Access information, main keys and security codes for your home
  • Documentation of repairs you’ve made per the home inspection
  • Your lucky pen

Now you’re ready! You might’ve heard horror stories of people being blindsided by high closing costs in Michigan – 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 Michigan, 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 Michigan. Despite most information readily available online, seeking expert advice helps progress the process of selling a home.

Selling a House in Michigan: Everything You Need to Know

  • Discount Real Estate Brokers in Michigan: If you want to save money on commissions while still receiving ongoing assistance and support, consider using a discount broker. We have compiled a list of the best discount brokers near you.
  • Companies That Buy Houses for Cash in Michigan: Home sellers have fewer inspections and paperwork when selling their houses to cash companies. We have ranked the best cash home buyers near you.
  • Real Estate Websites in Michigan: Real estate websites can streamline and simplify the home selling process using technology and help you sell your home fast. We have reviewed and ranked the top real estate websites in Michigan.
  • Flat fee MLS companies in Michigan: Learn about Flat Fee MLS and companies that offer the best services in Michigan. Here’s our detailed blog on the top Flat Fee MLS companies in Michigan.
  • Top Real Estate Agents in Michigan: Finding out the best real estate agent in Michigan can be a challenge, that is why we’ve curated a list of 10 top real estate agents in Michigan that you NEED to know.
  • Real Estate Companies In Michigan: Learn about real estate companies that offer the best services in Michigan. Here’s our detailed blog enlisting the top 5 FL companies.

4 min video: Learn How to Submit & Review Offers on Houzeo

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Closing Flat Fee MLS For Sale By Owner Michigan Sellers Guide States

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