What are closing costs in Michigan and who pays them?
Closing costs in Michigan typically range from 2% to 5% of the purchase price. On a $300,000 home, that’s somewhere between $6,000 and $15,000. Both buyers and sellers pay closing costs, but they pay different things. Understanding the breakdown removes a lot of the anxiety that builds up toward the end of a transaction.
As a buyer in Michigan, your closing costs generally include loan origination fees, title insurance, an appraisal fee, a home inspection, prepaid property taxes, and prepaid homeowners insurance. Your lender is required to give you a Loan Estimate within three days of applying for a mortgage. That document breaks down every expected cost line by line. Read it carefully and ask questions about anything that isn’t clear. Nothing in that document should be a surprise at the closing table.
As a seller, your costs are typically larger in total dollar terms but simpler to understand. The biggest expense is the real estate commission. After that comes your share of transfer taxes. In Michigan, the state transfer tax is $3.75 per $500 of the sale price. Counties add their own transfer tax on top of that. Sellers also typically pay a prorated share of property taxes through the closing date.
Here’s something both buyers and sellers need to know: closing costs are negotiable. A buyer can ask the seller to contribute toward their closing costs as part of the purchase offer. This is called a seller concession. In today’s market, this ask comes up regularly and sellers are often open to it, especially if it helps close the deal.
The goal of walking through all of this is simple: no surprises. By the time you sit down at the closing table, every number should be familiar. Every fee should make sense. I walk my clients through a cost estimate early in the process so they can plan ahead and make informed decisions, not scramble at the last minute.
If you’re buying or selling in Michigan and want a clear picture of what your actual costs will look like, reach out. Let’s put real numbers together for your specific situation.
[image: James Morgan]
Your Insider, James
Text or Call Me Anytime! 734-286-2645
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