Michigan levies two transfer taxes on the sale or other transfer of real estate. A county transfer tax of $1.10 per $1,000 has been levied for many years. A state transfer tax of $7.50 per $1,000 was levied starting in 1995. There are numerous exemptions from these taxes, most relating to sales where no monetary value is attributed to the transaction or where the transaction is between family members or current co-owners of the property.
Michigan has fairly strict requirements for recording documents at the Register of Deeds Office. The principal requirements are:Documents must be at least 8 1/2″ by 11″ and no larger than 8 1/2″ by 14″There must be a 2 1/2″ margin at the top and a 1/2″ margin at the sidesThe document must be black ink on white paper (signatures can be in blue ink in Washtenaw County but nothing else!)The minimum paper weight must be 20lbs. (No thermal fax paper!)The [...]
Deeds are recorded to provide notice to the world that you own your property. Recording a deed at the Register of Deeds imparts “constructive notice” to the world that you own your property-everyone in the world is deemed by law to know of your interest. If you fail to record your Deed, only those people who have actual notice of your interest in the property know of your ownership. The deed is merely evidence of your ownership of the property- [...]
This is a tough question and the answer varies from case to case, as the “earnest money” serves several purposes: Showing the buyer is serious A lever to make the Buyer perform A form of liquidated damages to compensate the Seller should the Buyer fail to perform In the Ann Arbor area, earnest money deposits range from 1% to 4% of the sale price. The deposit is either held by the Buyer’s Realtor or the title company. Interest is [...]
Escrow is one of those phrases the professionals use to mystify consumers. It is a fluid term with several meanings. The most common are: A generic term for the entire closing process An agreement to hold funds/documents until certain events have occurred (e.g. we will hold funds “in escrow” until the Seller removes the junk car from the backyard.) an agreement to hold deposit for a specific use (e.g. we will “escrow” $150/month for payment of future taxes.) Don’t [...]
Probably. Buying/Selling a home is a major event with significant financial and tax considerations. A good Real Estate Attorney will be able to give you critical advice about appropriate contingency clauses, title restrictions and tax consequences of your transaction. (We’ve highlighted Real Estate because you want an attorney who is experienced and current in this area.) The person who wrote your will or handled a “slip and fall” case is probably not the right person to advise you on real estate! Finding [...]
Closing a transaction should not be an ordeal. We typically budget one hour for a residential resale and 30-45 minutes for a refinance.
The time it takes to get to a closing of a real estate transaction is largely determined by the contract between the parties and the time needed to get lender approval if a mortgage is involved. In a typical residential transaction, most contingencies (other than financing and sale of the Purchaser’s residence) can be removed within two weeks. Financing should be resolved within 30-45 days.
The tax proration is an allocation of the property taxes between the Seller and Purchaser that is determined by their contract. It is not required, but it is customary. In Washtenaw/Livingston Counties the most commonly used proration is the “due date in advance” method. This treats the property tax bill like a newspaper or magazine subscription — when you pay your tax bill on December 1 it is treated as buying government services for the period starting on December 1 [...]
“Closing Costs” is a catch-all term that refers to the costs and expenses involved in closing a real estate transaction. These costs are determined by the contracts between the parties, applicable laws and local customs. The following explanation of “closing costs” is based upon our sample Real Estate Purchase Contract (see the Forms section for a downloadable copy), Washtenaw County custom, and assumes typical mortgage closing expenses.