Michigan closing costs, explained
A clear, honest breakdown of what it costs to close on a home in Michigan — who customarily pays what, the exact transfer-tax rate, and realistic totals for both buyers and sellers. No surprises at the closing table.
- Buyers: typically ~2–5% of the price
- Sellers: ~4% + a negotiable commission
- Transfer tax: 0.86% of price (customarily seller-paid)
The short answer
In Michigan, buyers typically pay closing costs of roughly 2%–5% of the purchase price (lender fees, title, recording, and prepaid taxes/insurance). Sellers typically pay around 4% of the sale price in costs like transfer tax and title — plus a real estate commission, which is negotiable.
Want your exact seller bottom line? Use the net proceeds calculator. Buying? See how to buy a home in Michigan.
Who customarily pays what in Michigan
Michigan has a couple of customs worth knowing (everything is ultimately negotiable in the purchase agreement):
- Seller customarily pays:the state + county transfer tax, and — distinctively for Michigan — the owner’s title insurance policy.
- Buyer customarily pays: lender/origination fees, the appraisal, the home inspection, the lender’s title policy, recording fees, and prepaid escrows (property taxes + homeowners insurance).
Seller closing costs, line by line
- Transfer tax — 0.86% of sale price.Michigan charges a state tax of $7.50 per $1,000 (0.75%) plus a county tax of $1.10 per $1,000 (0.11%) — $8.60 per $1,000 combined. On a $400,000 sale that’s about $3,440.
- Owner’s title insurance — roughly 0.4% of price.Scales with sale price; often discounted when issued alongside the lender’s policy.
- Prorated property taxes.You pay your share of the year’s taxes up to closing (Michigan’s summer/winter tax split makes this deal-specific).
- Real estate commission — negotiable.Historically ~5–6% total; since the August 2024 industry rule changes, buyer-agent compensation is negotiated separately rather than posted on the MLS. We’ll walk you through your options before you sign.
- Any seller concessions you agree to credit the buyer.
Rough seller total excluding commission: about 4% of sale price. One money-saver: if your home’s State Equalized Value at sale is at or below what it was when you bought, you may be able to claim a refund of the stateportion of the transfer tax — ask your title company or attorney.
Buyer closing costs, line by line
- Lender/origination fees — ~0.5%–1% of the loan (plus small application and credit-report fees).
- Appraisal — roughly $300–$600.
- Home inspection — roughly $300–$500 (optional but strongly recommended).
- Lender’s title policy — roughly 0.1% of price.
- Recording fees — a flat $30 per document in Michigan (so about $60 for the deed and mortgage).
- Prepaid escrows — often around 1% of price, covering prepaid property taxes, homeowners insurance, and per-diem interest. These are deposits toward amounts you’d owe anyway, not pure fees.
Rough buyer total: about 2%–5% of the purchase price. Run your numbers with the affordability calculator.
Michigan closing costs — common questions
How much are closing costs in Michigan?
Buyers typically pay about 2% to 5% of the purchase price in closing costs (lender fees, title, recording, and prepaid escrows). Sellers typically pay around 4% of the sale price in costs such as transfer tax and title insurance, plus a negotiable real estate commission.
Who pays closing costs in Michigan, the buyer or the seller?
Both pay a share. In Michigan the seller customarily pays the transfer tax and the owner's title insurance policy, while the buyer customarily pays lender fees, the appraisal, inspection, the lender's title policy, recording fees, and prepaid escrows. Everything is negotiable in the purchase agreement.
How much is the real estate transfer tax in Michigan?
Michigan's combined real estate transfer tax is $8.60 per $1,000 of sale price — a 0.75% state tax plus a 0.11% county tax, totaling 0.86%. It's customarily paid by the seller. On a $400,000 sale that's about $3,440.
Who pays for title insurance in Michigan?
In Michigan, the seller customarily pays for the owner's title insurance policy, while the buyer customarily pays for the lender's policy when financing. Both are negotiable, and issuing them together often earns a simultaneous-issue discount.
Want your exact numbers?
Whether you’re buying or selling, we’ll give you a clear, honest estimate of your real costs — no surprises. Talk to a local expert.
2032 E Square Lake Rd Ste 400A, Troy, MI 48085