Michigan Seller Net Proceeds: What You Actually Keep

Most sellers have already done the math before I get there. Sale price minus what they owe. That’s the number they’re planning around, and usually it’s the down payment on the next house.

It leaves out five things.

Commission. Transfer tax. Title and closing fees. Tax prorations. Whatever you credit the buyer after the inspection.

On a $285,000 sale with $150,000 still owed, those five lines take the number from $135,000 down to $109,749. The full math is below.

Short answer: Your net proceeds are the sale price minus your mortgage payoff, the commission in your listing agreement, Michigan’s 0.86 percent transfer tax, title and closing fees, prorated property taxes, and anything you credit the buyer for repairs. Every one of those lines is knowable before you list.

Below: what each line is, the full example, and a state transfer tax exemption that many Michigan sellers qualify for and never claim.

What does a seller pay at closing in Michigan?

Six lines come out. Two are fixed by statute. One is set in a document you sign before the house ever lists. The other three get negotiated while you’re under contract.

Cost	Who pays it in Michigan	Fixed or negotiated
Mortgage payoff	Seller	Set by your lender, quoted to a specific date
Real estate commission	Set in the listing agreement	Negotiated
State transfer tax	Seller, by statute	$3.75 per $500 of sale price
County transfer tax	Seller, by statute	$0.55 per $500 of sale price
Owner’s title policy, closing and recording fees	Customarily the seller in Michigan	Varies by title company
Property tax proration	Split by closing date	Formula, set by the purchase agreement
Repairs and concessions	Negotiated after inspection	Negotiated

Two things about that table.

Commission is negotiable. It always has been. It gets set in the listing agreement between you and your broker, and since the 2024 industry practice changes, what a seller offers a buyer’s agent is negotiated separately instead of published on the MLS. Any percentage in an example, including mine below, is an assumption.

The title line follows local custom. In Michigan the seller usually buys the owner’s policy and the buyer pays for the lender’s policy. Your purchase agreement overrides custom. Read that section.

Who pays transfer tax in Michigan, and how much?

You do. Both halves of it.

Michigan charges the transfer tax in two pieces and the statute puts both on the seller. The state portion is $3.75 for every $500 of sale price under MCL 207.526. The county portion is $0.55 per $500 under MCL 207.505. Together that’s $4.30 per $500, or $8.60 per $1,000, which works out to 0.86 percent.

It’s calculated on each $500 increment or any part of one, so the county rounds up before applying the rate. A $285,000 sale lands on an even increment and the rounding costs you nothing. Price it at $285,300 and you pay for the whole next one.

No city or township stacks anything on top. It’s 0.86 percent in Midland County, Bay County, and Saginaw County. Same in the City of Midland, same in Homer and Larkin and Lincoln Township.

On a $285,000 sale it’s $2,451. It’s the line sellers leave out most often.

A worked example, line by line

Two of the numbers below are real. The transfer tax is fixed by statute. The payoff comes from your lender. The commission percentage, the title and closing fees, the proration, and the concession figure are assumptions I picked to demonstrate the math. Your versions come from your listing agreement, a title quote, and the purchase agreement.

House sells for $285,000. Seller owes $150,000.

Line	Amount
Sale price	$285,000
Mortgage payoff	−$150,000
Commission, assumed at 6 percent for this illustration	−$17,100
Michigan transfer tax at 0.86 percent	−$2,451
Title, closing, recording, and tax proration	−$2,700
Repairs and concessions credited to the buyer	−$3,000
Estimated net proceeds	$109,749

The math in your head said $135,000. The net sheet says $109,749. That’s $25,251, and none of it is a junk fee.

Build the net sheet before you list. If you need $115,000 to buy the next house, a $285,000 sale price doesn’t get you there, and you still have time to price differently or plan around it.

The exemption most Michigan sellers never hear about

If you bought your house between 2005 and 2010, read this part twice.

Michigan exempts certain principal residences from the state half of the transfer tax. It’s MCL 207.526(u), and it takes three things:

1. You claimed the principal residence exemption on the property under MCL 211.7cc.
2. The state equalized value at the time of sale is equal to or lower than the SEV when you acquired it.
3. The sale was arms-length, at a price a willing buyer and a willing seller would land on.

Qualify and the state portion comes off. On the $285,000 example that’s $2,137.50 of the $2,451. You’d still owe the county’s $313.50.

The Michigan Supreme Court settled the refund question in Gardner v. Department of Treasury (2015). Sellers who already paid and met the conditions can claim it back on Michigan Treasury Form 2796. The window is four years and 15 days from the date of sale, so a 2023, 2024, or 2025 closing may still be inside it.

People get the test backwards. It compares SEV at sale against SEV at acquisition. That is a different question from whether you made money on the house, and sellers rule themselves out because they sold at a profit. Pull both numbers off the assessor’s record before you decide. For how SEV works and why it differs from taxable value, see the guide to Michigan property tax uncapping.

I’m not an attorney and I’m not a tax professional. Confirm this one with a Michigan real estate attorney, your title company, or Treasury before you file anything.

Why your payoff is higher than your loan balance

Two lines surprise people at closing. This is the first.

The balance on your statement is a snapshot. A payoff quote is a different document and it’s almost always higher. It covers principal, interest accrued through the date the loan is paid, and usually a recording fee to discharge the mortgage. Interest accrues daily, so a payoff good through the 30th costs more than one good through the 15th.

Ask your lender for a quote good through your expected closing date and ask for the per-diem with it. Closings move. The per-diem lets you adjust the number yourself.

Money comes back to you here too. If your lender escrows your taxes and insurance, that balance is refunded after the loan is paid off, usually within a few weeks. It does not appear anywhere on the closing statement.

How are property taxes prorated when you sell in Michigan?

The second one. Michigan makes this harder than it needs to be.

Taxes are billed twice a year. The summer bill goes out around July 1 and covers a July through June period. The winter bill goes out around December 1 and covers December through November. At closing, the title company splits those periods between you and the buyer based on your closing date.

There is no single statewide convention for how. Some communities prorate as though taxes are paid in advance and others as though they are paid in arrears. In the middle of the Lower Peninsula it is common to see summer taxes prorated one way and winter taxes on the same property prorated the other. MCL 211.2(4) supplies a fallback when a contract is silent, and nearly every purchase agreement is not silent.

The proration line can land as a credit to you or as a charge against you. Which one depends on your closing date and the method your contract names. It is written in the purchase agreement. Read that paragraph and have your title company walk you through the dollar figure before closing day.

If you’re buying your next place in Michigan at the same time, look at the tax picture on that side separately. The taxable value on the home you buy uncaps the year after you close.

Five things to do before you list

Order a payoff quote. Good through your expected closing date, with a per-diem amount.

Pull your SEV history. Get the SEV from the year you acquired the home and the current one from the assessor. Those two numbers decide whether the transfer tax exemption applies to you.

Get a written title quote. Call a local title company with your address and your expected price. They will estimate the owner’s policy, the closing fee, and recording costs. That replaces a guess with a quote.

Read your listing agreement. Know the total commission you agreed to and how it is allocated. It is a negotiated term.

Run the estimator, then have it checked. Build your own draft, have an agent build one next to it, and reconcile the differences.

Estimate your own net proceeds

I built a free calculator that runs this subtraction. Enter your expected sale price, your payoff, the commission from your listing agreement, and your estimated costs. It shows every line and your net at the bottom. The Michigan transfer tax field is pre-filled at 0.86 percent.

Try the seller net proceeds estimator

Still deciding whether to sell? The seller learning path covers every stage from pricing through closing. For a real number on your house in the current Midland area market, I can put together a home value report.

Concessions are the only line on the net sheet that gets negotiated after you’re under contract, and they move more money than most sellers expect. I cover them in the guide to seller-paid concessions.

Where to confirm your numbers

All of this is educational. I’m a licensed real estate associate broker in Michigan. I’m not an attorney, a tax professional, or a title agent. Exemptions carry conditions, proration customs vary between communities, and title fees differ from one company to the next. Confirm your figures with your title company and your lender, and anywhere taxes or exemptions are involved, with a tax professional or a Michigan real estate attorney.

Every number on that net sheet exists before you list. Three phone calls gets you all of them: your lender for the payoff, a title company for the fees, and the assessor for your SEV history.

Selling in Midland, Bay City, or Saginaw and want a net sheet built on your actual numbers? Get in touch and I’ll put one together for you.