Selling your home in Michigan should be a straightforward matter. Unfortunately, thanks to the closing costs, it's hard to work out what you'll get in the end. Are you liable for closing costs? Is the buyer? What are the fees you'll pay? It's all very confusing.

In this post, we’ll discuss closing costs and what they cover, whether you're buying Bay Harbor real estate or Burt Lake real estate

What are Closing Costs?

These are the costs that come due once you've finalized the sale of the Michigan home. The fees average out at 1% to 3% but can go as high as 7%. The actual amount you pay depends on the state and town you call home. Each state and city have their regulations.

If there’s sufficient equity in the home, these costs will be deducted from the settlement amount. If not, you’ll have to pay in the funds.

What Different Costs are There?

They’re based on a range of factors such as title insurance, attorney’s fees, and so on. Let’s go over these.

Title Search

A title search costs up to $600 to confirm that you're the property's owner and that the property is free of liens or judgments.

Title Insurance

You'll pay for yours, and the buyer will pay for theirs. This insurance is in place in case of a title issue later. Factor in a cost of about $1,000.

 Home Inspection

The home inspection is usually at the buyer's cost, but the seller can opt to pay. The fee ranges from about $300 to $500.


The banks in Michigan require an appraisal of value for financing related to the property. The seller may want to apply for a loan until the settlement comes through. The buyer’s bank will usually want an appraisal before granting a mortgage. The cost is up to $650.


Depending on which state you're in, you may be asked for a survey to define the legal boundaries of the property clearly. The cost is up to $500.

Credit report

The credit report forms a part of the bank's lending procedure. The buyer is responsible for these fees. The reports cost $20 to $50 for each bureau checked.

Mortgage Payoff

If the sale price didn't quite cover the mortgage, you'd have to pay in the difference. This amount is variable.

Prepayment Penalty

By selling, you’re paying off your mortgage early. Your lender may charge you a penalty as a result. This amount is variable and depends on your original contract with the lender. It could be a percentage of what’s left on the mortgage or a penalty based on the remaining time left.

Amounts You Owe on a Property

Any outstanding utility bills, property taxes, and insurance are for the seller to pay. The costs here are variable.

Transfer Taxes

Again, the amount you'll pay depends on your country and state. Your estate agent will be able to tell you what to expect here.

Recording Fee

This fee is to transfer the property to the buyer. The county determines the cost.

Settlement or Attorney Fee

If you used an escrow agent to close the deal, you'd have to pay a settlement fee. An attorney can perform the same function. If they do, then this amount becomes an attorney's fee instead.

Your typical settlement fee is around $2 for each $1,000 of the sales price. If your home sold for $100,000, you’d owe $200.

Attorney's fees are generally up to around $500.00. 

Estate Agent’s Commission

The estate agent’s commission is usually the seller’s responsibility. The amount is usually 6% of the selling price of the property.

Final Notes

Closing costs can quickly amount to over $2,000. Who pays what is often open for discussion. A seller might opt to pay all the closing costs as a way of making the deal more attractive. Our advice is to speak to your Lake Charlevoix realtor about the fees applicable in your town and state.

Posted by Pat Leavy on
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