How much does it cost to sell a house in Michigan?

This is usually the second question I get from sellers, right after "what's my house worth?" Fair enough. The number on the purchase agreement isn't the number that hits your bank account, and nobody likes surprises at the closing table.

Here's what actually comes out of a Michigan sale, in the order I'd think about it.

1. Commission

This is the largest line for most people, and it's negotiable. Since the industry rule changes in 2024, your listing agreement spells out exactly what you'll pay your listing broker and whether you're offering anything toward the buyer's agent. Some sellers do, some don't, and some decide case by case when an offer comes in asking for it. Ask your agent to walk you through those options before you sign anything.

2. Michigan transfer tax

Michigan charges a state transfer tax of $3.75 for every $500 of the sale price, plus a county transfer tax of $0.55 for every $500. That works out to 0.86% combined, and by custom the seller pays it.

On a $300,000 sale that's $2,250 to the state and $330 to the county, so $2,580 total.

One thing a lot of people miss: if the home was your principal residence and its state equalized value (SEV) is the same as or lower than it was when you bought it, you may be exempt from the state portion. It doesn't come up often in today's prices, but it does for some long time owners and some recent buyers. The Michigan Department of Treasury explains it here.

3. The buyer's title insurance policy

In most of Metro Detroit the seller pays for the buyer's owner's title policy. The cost depends on the price and the title company, and for most homes in our area it lands somewhere in the $1,000 to $2,000 range. You'll also see a handful of smaller title fees for things like the settlement and document prep.

4. Property taxes

Michigan bills property taxes twice a year, summer and winter, and your purchase agreement decides how they're split between you and the buyer at closing. Depending on timing you might get a credit or owe one. Look for the proration lines on your settlement statement and don't be shy about asking what they mean.

5. Repairs and credits

After the inspection, most buyers ask for something. Sometimes it's a repair, more often it's a credit at closing. I'd budget for this mentally even if your house is in great shape, because there's almost always a conversation. Our post on what Michigan inspectors look for covers the usual suspects.

6. The small stuff that adds up

• Water bill escrow. Title companies often hold back a little money until the final water bill is paid.
• City inspections. A few cities require a point of sale or certificate of occupancy inspection before a home can transfer. We check this when we list so it doesn't hold up closing.
• Moving and overlap. Movers, storage, or a month of double housing if your timing doesn't line up.
• Prep. Paint, a deep clean, a few repairs before photos. Usually worth it, but it's still money.

A quick example

Say you sell for $350,000 and you negotiated a total commission of 5%. Transfer tax is $3,010, title runs maybe $1,600, you give a $3,000 inspection credit, and you have another $1,000 or so in small fees. That's roughly $26,000 before your mortgage payoff, a little under 7.5% of the price. Your numbers will be different, but that's the shape of it.

What I'd do first

Get a realistic sale price, because every cost above is tied to it. Our instant home value pulls recent sales near you, adjusts for size, style, age, basement and garage, and gives you a range in about a minute. Then we can put together a net sheet with your actual payoff so you know what you'll walk away with before you list. You can also look at recent sales in your city to get a feel for the market.