Cost to Sell a House in Michigan: Seller Closing Costs Revealed

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  Written by Greg Isaacson

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  Edited by Steve Nicastro

Cost to sell in Michigan | Realtor commission | How to save | Closing cost calculator | FAQs

The average cost to sell a house in Michigan is 7.39% of a home’s final sale price, which includes realtor commission (5.65% of the sale price) and seller closing costs (1.7%). 

It costs home sellers in the Great Lakes State an average of $15,772 to sell a home priced at $210,135 (Michigan’s average home price).

However, Michigan realtor commission and seller closing cost figures vary widely by market.

You can also save big by using an agent-matching service to sell your home. For example, Clever Real Estate has negotiated a reduced listing commission of 1.5% – far lower than the average Michigan rate of 2.77%.

Here’s a complete breakdown of the average costs of selling a house in Michigan, including tips on how to save on your sale.

Cost of selling a house in Michigan 

*Costs assume a sale price of $210,135. Numbers are rounded off and may not be 100% precise.

It’s expensive to sell a house in Michigan compared to other states. The table above shows that it costs 7.39% of the home’s purchase price when factoring in realtor commissions and closing costs.

That’s higher than the national average of 6.53%. But given Michigan’s relatively low home values, it’s cheaper to sell on a total cost basis compared to the national average.

Overall home prices in Michigan are higher than in any neighboring state except Wisconsin. Illinois, which shares a water boundary with Michigan, also has slightly higher home prices.

Michigan’s cost to sell as a percentage of the home price is the highest in this group of states, so the state also has the greatest average cost to sell in dollars — with the exception of Illinois — at $15,772.

Home values vary quite a bit across Michigan, so your total home sale costs will also vary. For example, the median home price in Oakland County was $347,630 in July, but only $200,000 in Wayne County, according to Redfin data.

To determine the current market value of a your home, you can ask a real estate agent for a free comparative market analysis (CMA). Most real estate agents consider it a part of their job to provide a CMA report when you ask about listing your home. (It’s a way for them to show you that they’re knowledgeable about the local market and hopefully earn your future business.)

Here’s an example of your potential costs at various price points, including realtor fees and seller closing costs.

Here are the main factors impacting your Michigan home sale costs. 

Typical real estate agent commission in your area

While the state-wide average rate is 5.65%, rates may be higher or lower depending on what’s normal in your area. 

Your success (or failure) in negotiating rates

Realtor fees aren’t fixed — they are completely negotiable. You may be able to negotiate a rate lower than what’s typical in your area. 

How you find a realtor

You can potentially save thousands in realtor fees by using an agent-matching service like Clever Real Estate to find a realtor. Clever has pre-negotiated a 1.5% listing agent fee with agents in its network, much lower than the typical listing agent commission rate of 2.77%. 

Optional costs

The estimated total cost to sell of 7.39% in Michigan does not include other potential costs like home staging, deep cleaning, and pre-listing repairs, which could add thousands more to your home sale costs. 

Your negotiated contract

Michigan closing costs are split between the buyer and seller in most transactions. Sellers typically pay all commissions, transfer taxes, recording fees, and prorated property taxes.

Home sellers may also be on the hook for attorney fees, home preparation costs, homeowners association (HOA) fees, a mortgage payoff, and any concessions to the buyer such as a home warranty.

Buyers take on most of the other expenses including appraisal and inspection costs, title search fees, title insurance, their own attorney fees, and buyer closing costs for the mortgage such as an origination fee.

Here’s a deeper look at your expected home sale costs.

1. Michigan realtor commission (5.65%)

Michigan home sellers pay an average of 5.65% of the home’s sale price on realtor commissions, which is deducted from the seller’s net proceeds at closing. The 5.65% fee covers both the listing agent and the buyer’s agent commission.

Your actual commission cost depends on your home’s final sale price. Here’s what you might expect to pay in realtor fees at various price points.

*Median sale prices as of July 2022 according to Redfin. Commission costs assume an average realtor commission of 5.65%.

How to save on Michigan realtor fees

Here are some tips on how to save money on your home sale. 

Use a discount broker

A discount real estate broker is a company offering sellers a reduced commission fee with no strings attached. The broker’s listing agents charge less than the average rate, such as a 1–2% listing fee vs. the typical 2.5%–3% rate. 

Selling at a higher price point leads to even bigger commission savings using a discount broker vs. finding a realtor through traditional sources, like through a family member or friend. 

For example, Clever offers listing fees of just 1.5% ($3,000 minimum), compared to the average Michigan listing commission rate of 2.77%. Using Clever could save you more than $5,000 on a $200,000 home sale, and more than $8,000 on a $300,000 home sale, for example. 

Agents that partner with these firms also provide all of the services you’d expect to receive from a traditional realtor. The service is free to try with no obligation, so it’s worth starting out here. 

» MORE: The Best Discount Brokers for Every Budget

List your home without a realtor

You can avoid paying Michigan listing commission entirely by selling without a realtor. Expect to save 2.77% off of your home sale, since you don’t have to pay listing agent commission.

However, the typical FSBO home sells for close to $60,000 less than agent-listed homes, according to the National Association of Realtors, so you might lose money on the sale. You’ll also be on the hook for all of the tasks normally handled by a listing agent. 

Negotiate a lower rate

Agent commissions aren’t set in stone. There’s no law setting a fixed realtor fee in any part of the country, including Michigan, so you can try to negotiate a lower commission rate with your realtor.

Negotiating commission is more likely to work on a high-value property, since the agent will still earn a substantial commission on the home sale, despite the lower rate.

You also have more wiggle room to reduce the commission rate if you plan to buy a new home with the same agent that’s helping you sell since the agent will earn commission on both transactions.

» LEARN: How to choose the right listing agent 

2. Closing costs for sellers in Michigan (1.7%)

Seller closing costs typically add another cost of 1.7% or more to the home’s final sale price, according to our data. (Closing costs do not include realtor commission.)

Based on the average Michigan home value of $210,135, the typical home sellers pays $3,899 in closing costs.

Michigan seller closing costs typically include owner’s title insurance, transfer taxes, recording fees, prorated property taxes, and attorney or settlement fees.

The seller might also be responsible for Homeowners Association (HOA) fees, mortgage payoff and/or prepayment penalties, and any concessions offered to the buyer, such as a home warranty.

Buyers are generally on the hook for everything else, including appraisal and inspection fees, title search fees, lender’s title insurance, and loan origination fees.

Owner’s title insurance

Title insurance protects home buyers or lenders from losses arising after the transaction due to previously unknown issues with the property’s ownership or title. Owner’s title insurance protects the buyer’s interest in the property, whereas the lender’s title insurance protects the lending institution.

Michigan home sellers customarily purchase an owner’s title insurance policy as part of their closing costs, whereas buyers purchase the lending policy, according to Liberty Title.

However, there is no rule that the seller must pay, and a Michigan home buyer may agree to cover their own title insurance. “The seller is not responsible for the buyer’s title search fee or the owner’s title insurance policy,” notes Boyd Rudy, an associate broker with Dwellings Michigan.

“In some cases, the buyer may ask the seller to pay for these items, but it is ultimately up to the seller to decide whether to agree to this request,” Rudy adds.

Title insurance is a one-time premium, and most Michigan title companies charge similar rates. The cost of owner’s title insurance varies based on the home’s purchase price, whereas the cost of lender’s title insurance varies based on the amount of the mortgage loan.

North American Title Insurance Company offers a typical rate schedule for Michigan. The owner’s title insurance rate varies from $815 for a $100,000 home (0.815%) to $3,440 for a $1 million home (0.344%).

Title company fees

A title search must also be conducted before the property is transferred from the seller to the buyer. In a title search, a title inspector checks county and state records and documents the property’s chain of ownership.

Title searches are recommended for every real estate transaction and required for any transaction with a mortgage. In most Michigan home sales, the buyer’s attorney or agent arranges for the title search through a title company, Ann Arbor’s Ager Law Office reports.

Title searches cost up to $600, according to Petasky-based Pat Leavy Real Estate, but many title companies do not charge for this service.

Transfer taxes

Transfer taxes are customarily paid by the home seller, although this may be negotiable. The state transfer tax rate in Michigan is $3.75 for every $500 of the property’s value, or 0.75% of the total value.

 In addition to the state tax, each Michigan county imposes a transfer tax of $0.55 per $500. Adding state and county taxes together, home sellers pay a total of 0.86% in transfer taxes.

Transfer taxes for Michigan sellers cost an average of $1,807, higher than the national average cost of $1,467, according to our data.

For example, selling a $200,000 home results in a transfer tax bill of $1,720.

Recording fees

Government agencies charge recording fees to register the purchase or sale of a piece of real estate. Michigan home sellers face a flat recording fee of $30 for each document recorded, regardless of page count. Certification of a recorded document costs $5.

Prorated property taxes

Michigan home sellers are required to pay property taxes on the days they’ve owned their home in the calendar year. Taxes are prorated and split between the seller and buyer. 

The tax is due at closing. Actual costs depend on your annual taxes, and how many days you live in your home up until the closing date. 

Speak with your realtor or attorney for more details on what you might owe in prorated taxes. 

3. Other potential costs

Attorney fees

Michigan law does not require home sellers to hire an attorney to handle the closing, but it’s usually a good idea to have a lawyer on your side if you have any questions about the transaction or your responsibilities as a seller.

“While it is not required to have an attorney close on a house in Michigan, I would highly recommend it,” says Rudy, the associate broker with Dwellings Michigan. 

“An experienced real estate attorney can help to protect your interests and ensure that the contract is executed properly. They can also answer any questions you may have about the process and help to resolve any disputes that may arise,” he adds.

The cost for an attorney to review real estate documents ranges from $100-400 an hour, Rudy estimates.

You may pay a settlement fee if you use an escrow agent during closing rather than an attorney, according to Pat Leavy Real Estate. The typical settlement fee is roughly $2 for every $1,000 of the sales prices, so you’d owe $400 for a $200,000 home sale.

» LEARN: Do I Need a Lawyer to Sell My House?

Home preparation costs 

Preparing your home for sale could add thousands more to your total upfront costs.

Home staging costs between $745 to $2,659 on average in the U.S., according to HomeAdvisor. Actual costs vary widely depending on location, the size of the home, and the number of rooms being furnished.

Expect to spend at least $300 for deep cleaning, if required. Finally, pre-listing home repairs and improvements could add hundreds, if not thousands more to your budget, depending on your home’s condition.

Homeowners association dues

You may owe homeowners association (HOA) dues if your home is located in an HOA community. Sellers are typically responsible for covering a prorated amount of their annual membership dues at closing.

If the HOA charges fees to transfer homeownership records to the buyer at closing, the seller usually pays them. Costs vary between communities, but they commonly range from $150 to $500. Check with your agent, attorney, or HOA board for more information on what you might owe.

Buyer’s closing costs

In addition to the costs outlined above, buyers may request that sellers cover some of their closing costs. Seller concessions include anything that the seller gives the buyer to close the deal.

Seller concessions often come in the form of seller credits towards the buyer’s closing costs — 2-3% of the home’s sale price is common — or home warranty policies. However, they can also include compromises that don’t hold monetary value, such as an agreement to close on a date that’s preferable to the buyer.

“With the cooling of the 2022 housing market, we are seeing more home sellers offering what is called concessions, or seller credits for buyers,” comments Jason Gelios, a realtor with Community Choice Realty in Southeast Michigan.

Appraisal and inspection fees

An appraisal is a professional estimation of a home’s value. Lenders require an appraisal as part of the approval process for most home purchase loans, and loan applicants pay for it. Appraisals typically cost around $300 in Michigan, according to Harrison-based Condell Wonder Land Realty.

Most buyers also pay for home inspections in Michigan. Standard inspections paid for by the buyer include home inspections, sewer scope, radon, and water and septic inspections (depending on the county).

It may be helpful for you to order a home inspection before listing your property. Pre-listing inspections allow you to identify any problems with the house before the buyer can discover them, so there are fewer surprises during negotiations.

If the buyer is taking out a VA loan, the seller is usually responsible for covering the pest inspection. Rudy also notes that sellers are on the hook for the city inspection (if applicable) or the water and septic inspection, depending on the county.

Property inspections by certified professional inspectors generally cost several hundred dollars. For example, home inspections by Rochester Hills-based Total House Inspection start at $345. Mold testing costs an additional $175.

AAPEX Home Inspection Services, which serves the Detroit area, charges $395 to inspect a single-family home of up to $1,000 square feet, with higher rates for larger homes. The company also charges $215 for a sewer drain scope, $125 for a pest inspection, and $175 for radon testing.

Lender’s title insurance

Lender’s title insurance, which is required for buyers who take out a mortgage, protects the financial institution from any losses arising from a fault in the title. The cost of lender’s title insurance depends on the amount of the mortgage loan.

In some cases, Michigan home buyers may also agree to pay for their owner’s title insurance policy, which is normally covered by the seller.

Home warranty

A home warranty offers the homeowner protection from high repair costs on major appliances and electrical and plumbing systems. The homeowner pays an annual or semi-annual premium and enjoys reduced service rates when a technician comes to evaluate or fix a problem.

“Prior to the hyperactive housing market of the past few years, many home sellers were offering a free home warranty for the first year, with the buyer having the option to renew thereafter,” Gelois notes.

The annual premium for a home warranty in Michigan averages around $589 for a single-family home, according to Review Home Warranties. Premiums for townhomes and condos are lower at about $574 and $598, while premiums for multi-family homes average $1,056.

Sellers may offer to pay for a home warranty premium as a buyer incentive in Michigan. Covering this cost provides some peace of mind to potential buyers, which could sweeten the deal and result in a faster sale or more lucrative sale.

Capital gains tax

The IRS offers a tax break on capital gains from the sale of your primary residence, as long as you meet certain requirements:

• Single homeowners can deduct up to $250,000 of gains from the sale of their property;
• Married couples can deduct up to $500,000 of gains. 
• You must have occupied the property for at least two of the past five years. 
• You can also deduct certain repairs and improvements from your home’s cost basis. 

» LEARN: How to avoid capital gains on a home sale

Cost to sell a house in Michigan calculator

Use our calculator to get a rough estimate of what you might walk away with in your home sale. Change the home sale price and closing costs to fit your particular situation.

For more accurate numbers, we recommend finding a local realtor to provide you with a free seller’s net sheet: a personalized document that estimates how much you may earn in your home sale. 

Michigan seller closing costs: FAQs

Recommended reading

The True Costs of Selling a Home Revealed: What does it really cost to sell a house in the U.S.? We explore all of the common expenses in a home sale, and how you can save thousands.

How to Sell a House Without a Realtor in Michigan: Selling a home For Sale by Owner (FSBO) in Michigan means you won’t have to pay a listing commission, but there are major challenges you should learn about first.

How to Find a Realtor: Find out how you can connect with a great real estate agent. We help you zero in on the best approach, whether you’re selling or buying.

Seller Net Sheet Guide: Learn how a net sheet can help you estimate your potential home sale proceeds, and how to get one for free.

Negotiating Realtor Commission: Knocking your real estate commission down just one percentage point could save you a ton of money on your home sale.