FAQ

Under the Michigan Seller Disclosure Act (MCL 565.951–565.966), you must provide a Seller’s Property Disclosure Statement for most residential sales. This form details known conditions or defects affecting the home’s systems, structure, and utilities.

Homes transferred by court order, foreclosure, or certain estate sales are exempt—but otherwise, failing to disclose can lead to legal liability.

Yes. Selling “as-is” doesn’t remove your duty to disclose known material defects. The buyer accepts the home’s current condition but still deserves full disclosure of anything you’re aware of that affects value, safety, or habitability.

In Michigan, assessed value (used for property taxes) equals roughly 50% of true cash value—an estimate of market value set by the local assessor.

Market value is what a buyer is actually willing to pay in today’s market. The two numbers rarely match exactly.

If the home was your primary residence for at least two of the last five years, you can exclude up to $250,000 of profit (or $500,000 for married couples) from federal capital gains tax. Michigan follows federal rules for state income tax.

If it’s an investment or second home, normal capital gains may apply.

Typical seller closing costs range from 6% to 10% of the home’s sale price. That includes real estate commission, title insurance, recording fees, transfer taxes, and any agreed-upon concessions to the buyer.

In Michigan, the seller usually pays both the State Real Estate Transfer Tax and the County Transfer Tax, unless negotiated otherwise in the purchase agreement.

• State rate: $3.75 per $500 of property value.

• County rate: $0.55 per $500 of property value. Both are collected and recorded with the deed at closing.

Yes, if your home was built before 1978, federal law requires that you provide buyers with a Lead-Based Paint Disclosure Form and an EPA information pamphlet titled “Protect Your Family From Lead in Your Home.”

There’s no state-mandated time frame. Your agent will usually note a deadline in the listing or counteroffer. If no deadline is stated, the offer remains valid until withdrawn or rejected.

Yes. You can accept a backup offer that only becomes active if the first contract falls through. The backup buyer’s earnest money typically isn’t deposited until the first deal is released.

If the purchase agreement includes an inspection contingency, yes — the buyer may withdraw within the time window stated. Once contingencies expire, backing out without cause could result in forfeiting earnest money.

No. You’re not required to fix every item on an inspection report. Buyers may request repairs or credits, but it’s your choice to agree, negotiate, or decline.

For properties with active leases, you generally must honor existing leases until expiration unless otherwise agreed. For month-to-month tenants, Michigan requires one full rental period’s notice (typically 30 days) to terminate tenancy.

You can sell your home during the pre-foreclosure or redemption period to avoid losing equity. Michigan’s foreclosure law allows the owner to sell up until the sheriff’s deed redemption period expires. Always notify your lender early and work with an agent experienced in pre-foreclosure transactions.

In Michigan, most traditional home sales close in 30–60 days once under contract, depending on financing, title work, and buyer readiness. Cash offers can close sooner.

Yes — the mortgage balance is paid off at closing using proceeds from the sale. The title company coordinates the payoff so the lien is released once funds clear.

A short sale happens when you sell for less than what’s owed on the mortgage, with the lender’s approval. Michigan allows short sales, but the process can take several months while your lender reviews the hardship and sale terms.

If a buyer misses the contractual closing date, you may extend by mutual agreement or declare the buyer in default. The purchase agreement governs how earnest money and damages are handled in such situations.

Michigan law doesn’t require disclosure of a past death or crime that occurred on the property unless it materially affects the home’s physical condition. Ethically, some sellers choose to disclose if asked directly.

Ensure you file the Principal Residence Exemption (PRE) affidavit on your next home promptly and keep documentation proving the sold home was your primary residence. This helps avoid double taxation during the transition.