How Much Are Closing Costs for Sellers in Michigan?

By 

Bailey Peterson

Updated 

October 8th, 2020

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Michigan home sellers typically pay 1.22-1.69% of their home’s sale price in closing costs, according to our research. At the median home value of $180,404, that amounts to $2,653.

In this article, we cover how much sellers in Michigan should expect to pay at closing, which costs are paid by the buyer, and how to calculate these expenses.

How much are seller closing costs in Michigan?

Closing occurs at the end of a sale when money exchanges hands and the title of a property legally transfers to the buyer. The fees associated with this process are called closing costs.

In Michigan, home sellers should generally expect to pay between 1.22-1.69% of the home’s sale price in closing costs; however, a home seller can negotiate with their buyer over who pays them.

Here is a breakdown of the major closing costs you should expect in Michigan:

Title service and closing fees: 0.02-0.36% (~$375)

These fees are paid to a settlement agent of a title or escrow company for the services they provide, such as a title search. Usually, the buyer and the seller split these fees.

Owner's Title insurance: 0-0.62% (~$720)

Owner's title insurance protects your buyer in the event of an error in any previous transfers of title or if a dispute arises regarding ownership. Insurance can cover the costs to have any issues sorted out, pay for any legal representation in court, or even reimburse the value of the home.

Sometimes this expense is paid by a buyer, but a seller often pays for this policy as a courtesy to the buyer.

Transfer taxes and recording fees: 0.86-0.87% (~$1,559)

When you transfer ownership to the buyer, the state, county, and/or city in which the home is located charges taxes and fees. Who pays these taxes is, like all other closing costs, negotiable, but it’s common for the seller to cover these fees.

» MORE: Michigan Transfer Taxes

Property taxes: Varies

Because property taxes are charged in arrears, sellers prorate buyers the taxes they owe from the time they owned their home before selling it. It’s only fair that the buyer wouldn’t have to pay taxes for the time before they purchased the property.

Other closing costs

There are other possible closing costs that may arise during the closing process, but it depends on your exact situation. These include:

  • Home Owner’s Association (HOA) fees
  • Settlement or attorney fees
  • Property appraisal fees
  • Mortgage payoff and/or prepayment penalties

Other home selling costs in Michigan

In addition to closing costs, sellers are responsible for the realtor commission fees of both the buyer’s agent and the seller’s agent. The average commission rate in Michigan is 5.44%, which means this is the largest expense home sellers incur at closing — even though this isn't usually considered a closing cost.

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» LEARN: How much it costs to sell a house in Michigan

Who pays closing costs in Michigan?

Closing costs are split between the buyer and the seller, and each have their own costs they typically pay. Here is a breakdown of the typical closing costs and who is expected to pay for them:

Closing costWho typically paysAmount
Owner's title insuranceSeller$1,136
Lender's title insuranceBuyer$628
Transfer taxSeller$1,552
Closing feeBoth$401 (each)
Recording feesVariesApprox. $21-96

How to calculate your closing costs in Michigan

A general rule of thumb in real estate is to expect to pay anywhere from 1-3% in closing costs as a seller. In Michigan, costs range from 1.22-1.69%, but each situation is different. Specific costs and estimates will depend on your location, home value, and negotiations you’ve had with your buyer.

For a typical Michigan home, here's how the closing cost calculation breaks down:

CategoryPrice
Home sale price$180,404
Title Service and Closing Fees (0.02-0.36%)$30-650
Title Insurance (0.00-0.62%)$0-1,119
Transfer Tax and Recording Fees (0.86-0.87%)$1,551-1,573
Total closing costs$1,581-3,342

» LEARN: How to use a seller net sheet