TRANSACTION COSTS ASSOCIATED WITH SELLING YOUR HOME

In order to avoid a potentially unpleasant surprise regarding your closing costs at the conclusion of your residential real estate transaction, inquiry should be made with a real estate attorney with respect to your anticipated closing costs early on in the process.   Once the contract is signed for the sale of your home, it is likely too late to do anything about these subsequently discovered costs, or to renegotiate with your Buyer.  Some of these costs to consider are:

SURVEY

Usually a Buyer will request a boundary stake survey showing all improvements on the property.  The cost for a survey can be anywhere from several hundred dollars to in excess of one thousand dollars.   This is a negotiable cost, and there is no legal requirement that the Seller automatically be responsible for this payment.  Your real estate attorney can evaluate your contract in totality and advise you as to the appropriateness of attempting to allocate this survey cost to your Buyer.

HOME INSPECTION

A Buyer will often negotiate for the right to have certain inspections done with respect to the property.  These might include a generic home inspection of the structure; mechanical systems, etc.; pest inspection; inspection for lead based paint and other environmental hazards;  and, where applicable, a well water and septic inspection.   Generally these costs will be incurred by the Buyer so long as the undertakings for these inspections are performed in a reasonably prompt manner and within certain contractual parameters.

TITLE COMPANY CLOSING TRANSACTION FEE

Today, most residential real estate closings are held at a title insurance company.   This individual will be responsible for preparing a variety of forms incident to the closing of the transaction.   The charges for this service continue to increase, and now may consist of several hundred dollars.   Again, whether the Buyer or the Seller is responsible for the payment of this transaction fee is negotiable.   Consequently, you should be mindful at the time of negotiating your purchase agreement, of the potential for shifting this fee to the Buyer or perhaps sharing this expense equally.

OWNERS' POLICY OF TITLE INSURANCE

This is an insurance premium charged by the title insurance company for the Buyer's benefit, insuring that the Buyer is obtaining good and marketable title from you with respect to the real property.   It is generally accepted that it is a Seller's obligation to pay for the cost of an owners' title insurance policy.  Title insurance is expensive, and is determined based upon the sale price of the property.  A sale in the amount of $250,000, for example, will cost the Seller about $1,185.00.

MICHIGAN TRANSFER TAXES

Michigan Transfer Taxes are charges payable by a Seller.  Payment of Transfer Tax some years ago was hardly noticeable when Michigan only required a County Transfer Tax of $1.10 per $1,000 of sale price.   Unfortunately, we now have a State Transfer Tax in the amount of $7.50 per $1,000 of sale price.   This total State and County Transfer Tax ($8.60 per $1000) must be collected at the time of closing.   While customarily these charges are paid by the Seller, occasionally they can be allocated to the Buyer.

In conclusion, there are numerous other charges and expenses associated with the sale of residential real estate.   If you have a mortgage on the property, the mortgage balance will need to be paid off and taken out of your sale proceeds at the time of closing.   Real estate property taxes will need to be prorated.  A real estate attorney should be consulted when you sell real estate for assistance in thoroughly examining your costs associated with the sale of real estate and guide you in making sure that you do not pay more than what is legally required and appropriate.