| Selling Expenses to Plan For
Seller's Estimated Closing Costs
It is standard practice in Michigan for the Seller to pay title insurance (your guarantee that you will convey clear title to the Buyer). Title Insurance premiums are based upon the purchase price. There is a State and County tax on the transfer of property, based on the purchase price. Property taxes are prorated as of the closing date. County, Township, and School taxes are prorated on a calendar year basis as if paid in arrears, i.e., the Seller is responsible for 01/01 to closing; the Buyer is responsible from closing to 12/31. Village/City taxes are prorated on a due date basis as if paid in advance, i.e., the Seller is responsible for 07/01 to closing; the Buyer is responsible from closing to 6/30. The real estate commission, compensation for professional services rendered, is typically based upon the purchase price. There are other minor recording and settlement fees associated with the closing of the sale.
The following summary is an estimate of closing costs based on a home sale price of $200,000, with no mortgage, and a June 30th closing date.
| Mortgage Payoff | $ 0 | | Title Insurance Premium | $ 726 (Owner's Policy) | | Transfer Tax | $1,720 ($8.60/thousand of sale price) | | Property Tax | $ 992 (homestead millage) | | Commission | $12,000 | | Settlement & Recording | $150 | | Seller's Estimated Net | $184,412 |
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