Editor’s note: This post will help answer the question: How much are closing costs in Michigan? The example costs provided are based on median home prices and typical fees. Your closing costs may differ depending on your circumstances and the terms of your home purchase. Your Michigan dream home has just come on the market, and you’re eager to make an offer. You’ve done some math, and the monthly mortgage payments fit into your budget, but you’re wondering about coming up with enough cash for closing costs in addition to the down payment. “[Michigan] buyers should expect to pay roughly 2%-4% in closing costs,” says Andrew Hargreaves, a top real estate agent in the Metro Detroit area who works with nearly 70% more single-family homes than the average agent in his market. “However, this number varies greatly depending on if you purchase the house with a mortgage or cash.” In this post, we’ve researched the expenses related to buying a home in Michigan and gathered expert insights to help you understand just how much your closing costs might be before you make one of the biggest purchases of your life. Closing costs are a set of fees related to buying a house, which are due on the official date of purchase (also known as closing). Some of these costs, such as property taxes and insurance, are related to homeownership in general. Others, such as origination fees and interest, are directly related to obtaining a mortgage. Richie Helali, a licensed, senior mortgage advisor at HomeLight Home Loans, says that closing costs are most often paid through wire transfer or certified check, along with the down payment for your home loan (which is not part of your closing costs but is typically due at the same time). If the total amount of your closing costs plus your down payment is financially overwhelming, sometimes lenders will allow you to add the closing costs into the total amount of your loan, thus reducing the amount of cash needed at closing. “Conventional mortgages may allow up to 3% of the closing costs to be rolled into the loan, and VA and FHA loans allow up to 6% of closing costs to be rolled into the loan,” says Hargreaves, who has been assisting homebuyers for 18 years. We’ll provide some example closing costs in a minute to illustrate how this all plays out. But both buyers and sellers are responsible for certain fees and closing costs in a home sale transaction, which we’ll break down in more detail in the next section. The percentages above are typical, but buyers and sellers can negotiate to determine who pays specific closing costs in Michigan. The market right now, especially in the metro Detroit area, is still quite competitive, so most sellers don’t pay the buyer’s closing costs unless they’re in a hurry to sell or are selling a home that needs repairs. Below are some typical closing costs for Michigan. Keep in mind that Michigan doesn’t require an attorney to be at closing, so attorney fees aren’t included in closing costs examples. If you’re buying a house with a mortgage and your lender requires an escrow account for property taxes and property insurance, you will need to have a couple months of reserves in this escrow account. Here are some common buyer’s closing costs based on a median sales price of $216,800. Below are some typical seller closing costs based on a sales price of $216,800. Here are some estimates of buyers’ closing costs in Michigan. Buyers in Michigan can get a preliminary estimate by using free online tools such as HomeLight’s Closing Costs Calculator. Other handy tools from HomeLight include our Home Affordability Calculator and Down Payment Calculator. But the best way to determine closing costs on your dream Michigan home is to partner with a top real estate agent or mortgage advisor. There are several ways for Michigan buyers and sellers to minimize closing costs, including: HomeLight can connect you with some of the most experienced buyer’s agents in Michigan. Simply answer a few questions, and our Agent Match platform will analyze over 27 million transactions and thousands of reviews to determine which agent is best for you based on your needs. When are closing costs paid in Michigan?
According to Hargreaves, “Closing costs are paid at closing, which is also known as settlement. The exceptions are things like inspections and appraisals, which are paid upfront.” Can I add closing costs to my home financing?
A lender may allow you to add closing costs to your home financing or to roll them into your loan. However, Hargreaves, our metro Detroit real estate expert, says that “A buyer may get steamrolled in today’s competitive market if they want to add the closing costs to their home financing. They’re basically artificially inflating the sales price, and there is too much competition that their offer may be overlooked.” Sellers are looking for the strongest offer possible, especially if they may have multiple offers on their property. Will I need to pay private mortgage insurance (PMI) in Michigan?Private mortgage insurance is a protective measure for the lender. If you don’t have a downpayment of 20% or at least 20% of the equity in the home, you may be required to pay PMI if you have a conventional or FHA loan. This is a national requirement and not just specific to Michigan. Will a builder pay closing costs on a new construction home in Michigan?
Due to the current competitive nature of the market, most builders aren’t paying closing costs on a new construction home in Michigan. However, it doesn’t hurt to ask. Additionally, you may be able to negotiate the price of the home or ask for some free upgrades to offset some of your costs. Closing costs vary based on the price of your home and whether or not you’re getting a mortgage. Inspection and appraisal costs are typically paid upfront, and everything else is usually paid at the closing table. As a buyer, expect to pay around 2%-3% of the home price for closing costs. So, if you’re purchasing a home in Detroit, Michigan, for $80,000, then expect to pay between $1,600 and $2,400 in closing costs. Partner with a top real estate agent in Michigan who will help you navigate the entire homebuying process, including closing costs. HomeLight can connect you with a qualified, trusted agent in your area who knows the market and has a proven track record of helping buyers find and close on their new Michigan home.
What are closing costs?
Who pays for closing costs in Michigan?
How much are closing costs in Michigan?
Buyer closing costs in Michigan
Closing cost item
Typical cost to buyer
Appraisal fee
$400
HOA charges (prorated or approval fees)
Varies
Loan origination fees
$2,168
Credit report
$100
Sewer Scope (for older homes)
$150
Radon inspection
$150
Home inspection
$600
Termite inspection (required by VA)
$100
Recording fees
$50
Prepaid points (mostly optional)
$2,168
Compliance fee (paid to buyer’s brokerage)
$375
Title insurance fees (buyer’s and lender’s policy)
$1,000
Typical buyer closing cost total (2%-4%)
$4,336 to $8,672
*Example estimate based on a $216,800 median-priced Michigan home.
Seller closing costs in Michigan
Closing cost item
Typical cost to seller
Real estate commission (5.5%)
$11,924
Settlement fees (may include notary and mailing fees)
$400
Transfer taxes (may vary by county)
$1,864.48
Title search fee
$250
Property taxes (May need to pay back buyer)
Varies
Wire transfer fees
$30
Outstanding amounts (utility bills, HOA fees)
Varies
Compliance fee (paid to seller’s brokerage)
$375
Typical seller closing cost total (7%-8%)
$15,176-$17,344
*Example estimate based on a $216,800 median-priced Michigan home.
How can I estimate my closing costs in Michigan?
Home price
2% closing costs
3% closing costs
4% closing costs
$100,000
$2,000
$3,000
$4,000
$150,000
$3,000
$4,500
$6,000
$200,000
$4,000
$6,000
$8,000
$250,000
$5,000
$7,500
$10,000
$300,000
$6,000
$9,000
$12,000
$350,000
$7,000
$10,500
$14,000
How can I lower my closing costs in Michigan?
How can I find a top real estate agent in Michigan?
A buyer may get steamrolled in today’s competitive market if they want to add the closing costs to their home financing. They’re basically artificially inflating the sales price, and there is too much competition that their offer may be overlooked.
Additional expert insights about closing costs in Michigan
Know your closing costs in Michigan
