You sold your house for $400,000. Why isn't that your check?
When homeowners think about selling, the first number they usually consider is the sale price.
But there's another number that's just as important: how much money they'll actually receive after closing.
If you're selling a home in Michigan, here's where the money goes.
Your Mortgage Gets Paid Off
You generally don't need to pay off your mortgage before listing your home.
When the sale closes, the title or settlement company arranges payment of the outstanding mortgage from the sale proceeds.
Your lender provides an official payoff statement showing the amount required to satisfy the loan.
That amount may be different from the balance shown on your monthly statement because it can include accrued interest and other applicable charges.
If you have a home equity loan or second mortgage, that may also need to be paid.
Selling Expenses Are Deducted
Depending on your agreements and the transaction, selling expenses may include:
Real estate brokerage compensation.
Title and settlement charges.
Michigan real estate transfer taxes.
Recording or document fees.
Buyer closing cost credits.
Other negotiated expenses.
Michigan's Department of Treasury explains the state real estate transfer tax and available exemptions.
Not every seller pays the same expenses. Some costs are negotiated, and others depend on the property and transaction.
Property Taxes Are Adjusted
Michigan real estate transactions commonly include property tax prorations.
Depending on the purchase agreement, the seller may receive a credit for taxes already paid or owe an adjustment for taxes attributed to their ownership period.
These adjustments can change the final amount received.
For more information, read my Michigan Property Tax Proration Guide.
You can also watch my Michigan Property Tax Estimator video
Example: Selling a $400,000 Home
Let's use a hypothetical Michigan home sale to see where the money goes.
Illustrative example only. Brokerage compensation is negotiable. Actual mortgage payoffs, transfer taxes, closing costs, credits, and tax adjustments vary by transaction.
In this example, the home sells for $400,000, but the seller receives approximately $148,000 after the mortgage payoff and estimated selling expenses.
Know Your Numbers Before Listing
Before putting your home on the market, request an estimated seller net proceeds statement.
It should consider your likely sale price, mortgage payoff, expected expenses, and other known adjustments.
The estimate won't be exact until closing, but it can help you make better decisions about pricing, offers, and your next purchase.
If you're considering selling in Southeast Michigan, visit my Seller Resources page to start evaluating your options.
Knowing what your home might sell for is important. Knowing what you'll keep is even better.