Guides / Cost to sell
Short answer
Most Michigan sellers pay the real estate commission, state transfer tax of $7.50 per $1,000 of the sale price, county transfer tax of $1.10 per $1,000, and, by Michigan custom, the buyer’s owner’s title insurance policy. Some sellers can get the state transfer tax refunded on their home. Commission is negotiable and not set by law.
The costs most sellers pay
These are the costs that show up on almost every Michigan seller’s closing statement. Your purchase agreement can change who pays what, so read it before you sign.
| Cost | Who usually pays | How it is figured |
|---|---|---|
| State transfer tax | Seller (the law makes the seller liable) | $3.75 for each $500 of the price, or $7.50 per $1,000 |
| County transfer tax | Seller | 55 cents for each $500, or $1.10 per $1,000 |
| Owner’s title insurance policy | Seller, by Michigan custom | Priced by the title company from the sale price |
| Real estate commission | Set in your listing agreement | Negotiable, not set by law |
| Mortgage payoff and any liens | Seller | From your lender’s payoff letter |
| Property taxes | Split as the purchase agreement says | Depends on the agreement and local practice |
Transfer tax, worked out
Michigan charges two transfer taxes when a deed is recorded: the state tax and the county tax. Together they come to $4.30 for each $500 of the price, or $8.60 per $1,000.
On a $400,000 sale that is $3,000 in state tax plus $440 in county tax, $3,440 in all. The tax is paid to the county treasurer within 15 days after the deed is delivered, and the title company usually handles it at closing.
The refund many sellers miss
Michigan law lets some sellers get the state transfer tax back on their home. You may qualify if all three of these are true:
- You had a principal residence exemption on the home.
- The home’s state equalized value (SEV) when you sold was the same as or lower than its SEV when you bought it.
- The sale was at arm’s length, between unrelated people at market terms.
How to claim the refund
File Michigan Treasury Form 2796 within 4 years and 15 days of the sale. Attach proof the tax was paid, your settlement statement, proof of when you bought the home, and the SEV for the year you bought and the year you sold. The refund covers the state tax only, not the county tax. Your SEV history is on old tax bills or your city or township assessing page.
Commission is negotiable
Since August 17, 2024, under the National Association of Realtors settlement, buyers sign a written agreement with their agent before touring homes, and offers to pay the buyer’s agent are no longer posted on the MLS. Those agreements must say that broker fees and commissions are fully negotiable and not set by law. Talk through fees with your agent before you list.
Costs that depend on your home
Ask Kevin for a home value and he can walk you through what you would take home after these costs.
- Repairs or credits you agree to after the buyer’s inspection.
- Any septic evaluation your township requires at sale (Commerce Township and West Bloomfield Township both do).
- Moving, and overlapping payments if you buy before you sell.
Sources
- Michigan Legislature, MCL 207.525 (state transfer tax rate)
- Michigan Legislature, MCL 207.504 (county transfer tax rate)
- Michigan Treasury, State Real Estate Transfer Tax
- Michigan Treasury, Form 2796 (transfer tax refund)
- Michigan DIFS, title insurance guide
- Michigan Land Title Association, consumer guide to title insurance
- National Association of Realtors, what the settlement means for buyers and sellers
General information, not legal, tax or financial advice. Rules and rates change; check with the source, your title company or a tax professional before you rely on a number.