Michigan Real Estate Closing Costs Statistics (2024 Survey)
A new RealEstateBees.com survey of over 1,000 active real estate professionals found average closing costs for sellers and buyers in Michigan.
We reached out to over 1,000 active real estate professionals from Michigan to collect their insight on the real estate closing costs across the state.
The results are part of the large-scale survey—Nationwide Real Estate Closing Costs Index—conducted by the Real Estate Bees, a leading online real estate platform.
What Is Included in Closing Costs for a Seller in Michigan?
Costs included in seller’s closing costs most commonly across Michigan.
What Are Average Closing Costs for a Seller in Michigan When Selling with a Realtor?
The most common amounts of seller’s closing costs across the state of Michigan in an agent-assisted sale.
What Are Average Closing Costs for a Seller in Michigan When Selling 'by Owner'?
The most common amounts of seller’s closing costs across the state of Michigan in a FSBO sale.
How to Reduce Closing Costs for a Seller in Michigan?
Property taxes will be prorated based on the closing date, whereas the seller only pays for the time they owned the property and the buyer will reimburse the seller if the seller prepaid for any taxes.
Since a majority of closing costs for a seller are fixed and based on a percentage of the sales price (transfer taxes, title policy, HOA fees, if applicable), the only ways a seller can reduce their closing costs are to negotiate on commission, and my favorite secret of the trade, negotiate the “compliance fee.”
Many firms charge ridiculous amounts for a compliance fee with little to no consumer transparency.
In my personal and professional opinion, firms should not be charging more than $500 for this.
I have seen and heard firms charging $1,000-$1,500 and calling it compliance fees, when in the end, the agent is receiving additional commission through this “junk fee.”
This is a question clients should be asking prospective real estate agents in Michigan when they interview for the listing.
Additional ways that seller can reduce closing costs: If seller and buyer use the same title company, costs can be discounted; Seller can refuse to home warranty fees; Seller can refuse to offer concessions; During negotiations for repairs, seller can opt to have the repair(s) completed for a less amount than it would be to offer buyer a credit at closing.
In a competitive sellers market, a homebuyer could cover certain costs for the seller.
Can a Seller Avoid Paying Closing Costs in Michigan?
Sure, certainly anything is negotiable and the seller can negotiate that the buyer is to absorb some or all the closing costs as long as it is clearly outlined which of those are.
Closing costs is an ambiguous term, so full disclosure and transparency is warranted in these situations.
If a seller cannot afford their share of closing costs after all calculations are completed and there is no money left over on the deal, the seller would have to come up with the additional funds.
If the seller cannot afford to do so, they can ask if the buyer would make up the difference. Perhaps the agents on the transaction would be willing to pitch in a portion of their commission.
If after all the seller still cannot afford to close, the deal is dead and the transaction would be canceled.
A more experienced agent with their Michigan real estate attorney would have negotiated a short sale prior to listing to mitigate this situation.
If a home seller can’t pay their share of the closing costs, then they could negotiate with the buyer—depending on how much the buyer wants the home and how the housing market is doing.
What Is Included in Closing Costs for a Buyer in Michigan?
Costs included in buyer’s closing costs most commonly across the state of Michigan.
What Are Average Closing Costs for a Buyer in Michigan When Buying with a Realtor?
The most common amounts of buyer’s closing costs across the state of Michigan in an agent-assisted sale.
What Are Average Closing Costs for a Buyer in Michigan When Buying Without a Realtor?
The most common amounts of buyer’s closing costs across the state of Michigan in a FSBO sale.
What Are Average Closing Costs for a Cash Buyer in Michigan When Buying with a Realtor?
The most common amounts of closing costs paid by Michigan cash home buyers in an agent-assisted sale.
What Are Average Closing Costs for a First-Time Buyer in Michigan When Buying with a Realtor?
The most common amounts of a first-time home buyer’s closing costs across the state of Michigan in an agent-assisted sale.
How to Reduce Closing Costs for a Buyer in Michigan?
Buyer can reduce a significant portion of their closing costs by purchasing through cash.
They would save on avoiding having to pay for a lender’s title policy since no lender is involved, no lender required escrows which get quite hefty with FHA and non-traditional lender requirements.
Other tips for reducing closing costs for a buyer include shopping around for a homeowners policy.
More importantly asking their lender about their “junk fees” upfront and requirements for closing accounts with a Michigan escrow company based on their loan eligibility.
The buyer can ask for the seller to pay for items like a Michigan home warranty or ask for concessions.
Reducing closing costs for a homebuyer includes locating a Michigan real estate lender with minimal closing costs, having a higher down payment, and getting a conventional loan versus government loan, if possible.
How to Negotiate Closing Costs With a Seller in Michigan?
Negotiating closing costs with a home seller could mean integrating the details with a solid offer on the home.
In a buyers market, a home seller will be more willing to negotiate covering the homebuyer’s closing costs.
In any transaction, a party of the transaction should try to offer the seller something if and when they are asking for negotiation on a fee.
Can a Buyer Avoid Paying Closing Costs in Michigan?
It is impossible to eliminate closing costs for a buyer from an arms-length transaction.
But, there are options and opportunities for minimizing these costs if you can find a good REALTOR with access to lenders and title companies in Michigan who are known for keeping costs low and service high for their clients.
A homebuyer can never really avoid paying all closing costs. But they can avoid paying most costs upfront and out of pocket. This involves having the costs rolled into the mortgage.
Are There Closing Costs Assistance Programs Available for Buyers in Michigan?
Yes, there are usually 1-3 programs for buyers to help with closing costs.
Some lenders even allow buyers to finance some of their closing costs into the loan to keep out-of-pocket closing costs low.
Many states and lenders have down payment assistance programs to help homebuyers, allowing them to have an easier time covering other closing costs.
Who Pays Closing Costs in a Conventional Sale in Michigan?
Who Pays Closing Costs in a Cash Sale in Michigan?
Are Closing Costs Negotiable in Michigan?
What Are the Available Ways to Pay Closing Costs in Michigan?
Why Are Closing Costs So High in Michigan?
Closing costs vary and are usually a percentage based on the purchase price. Further, the type of mortgage the buyer is moving forward with can have an impact as well.
Real estate deals with a mortgage usually always cost the buyer (and seller) more in closing costs than a purely cash sale.
Generally, if the transaction involves a real estate agent on one or both sides, the seller has been responsible for that closing costs.
Now in light of the series of recent lawsuits against real estate firms across the country, we may see some changes as it relates to commission charges and whether the seller or buyer will absorb those.
Closing costs vary on the loan type the buyer is using. There are many elements and parties involved in a real estate transaction.
A cash buyer typically pays the same amount of closing costs minus the cost of obtaining a mortgage.
Who Pays Closing Costs in a Divorce in Michigan?
One of the main tenets of divorce that we instill in our clients is that everything in divorce is negotiable, as well as real estate transactions, including who pays closing costs when buying an ex-spouse out of the marital home.
We advise clients to not leave any potential bargaining chip on the table.
What Are the Transfer Taxes in Closing Costs in Michigan?
State transfer tax rate: $3.75 for every $500 of value transferred
County transfer tax rate: $0.55 for every $500 of value transferred
Who Pays Transfer Taxes in Closing Costs in Michigan?
It is pretty standard that the seller would be responsible for paying transfer taxes. In fact, Michigan State Real Estate Transfer Tax Act states that the seller is liable to pay for this.