Traverse North Realty, Old Mission, Downtown Traverse City, Waterfront, Foreclosures

Closing Costs and Title Insurance


Typical Traverse City Area Closing Costs

Seller Closing Costs:  Most purchase agreements state that closing costs are split.  This includes only the standard title company closing fee, not transfer tax, title insurance, bank fees, appraisals, etc.  This fee typically runs from $150 to $300 for both the buyer and seller.   However, there are other fees the seller is responsible for, based on the wording of the purchase agreement.

Owners Policy:  The seller provides an owners title policy to protect him and the buyer against claims. The cost for this runs about .5% of the purchase price, but that ratio changes as the value of the home goes up. 

Transfer Tax:  In Michigan, there is a transfer tax for all real property and the typical contract states that the seller pays for it.  This runs .8% of the purchase price.  There are some cases where this tax is not due, such as when a primary home is being sold for less than the SEV was when purchased.  Please contact your title company or attorney to see if you quailify for this exemption.

Closing Fee:  $150- $300 depending on the title company.  The title companies are mandated by law to be consistent with this fee for all closings.

Next day mail fees if applicable.

Document Prep fee

Purchaser Closing Costs:  There are additional fees the purchaser typically pays if a mortgage is involved, including origination fees, appraisal fees, surveys, inspection fees, etc.  These vary greatly dependin on the lending institution and the type of loan.  Your lender will provide you with a preliminary HUD statement indicating these fees for your review.

Other costs the purchaser has (or for cash transactions), include the closing fee and any applicable next day mail fees.  If a mortgage is involved, the buyer will also be responsible to pay for the lenders title policy, which typically costs .5% of the purchase price.  This is not required for cash deals.

Please visit Mid American Title's on line estimater to get an estimate of the closing costs.


Please remember that these fees vary depending on the title company and some items may be negotiable in the purchase agreement.  Also, many bank owned properties will state in the purchase agreement addendum that the buyer is responsible for transfer tax and possibly the title insurance.


Questions About Title Insurance (provided by Mid American Title of Traverse City)

Buying a home is, for many of us, the biggest single investment we'll ever make. Knowing this, most homeowners provide for the security and safe keeping of their homes by insuring them against hazards such as fire, theft and weather damage. But there is another hazard that can pose and even greater risk to homeownership: Defects in the title to your property can cause you to lose part or all of the investment in your home. Fortunately, there is a way to protect our investment from these title defects. It comes in the form of title insurance. What is title insurance and why do you need it? In the following pages, we've listed the answers to these and other commonly asked questions.

We suggest that you read through this information carefully. It will help you to better understand the value of title insurance in protecting your homeownership. And the general real estate information will help make the home-buying process a smoother one. Here are some title insurance questions,

What is a title? A title is the foundation of property ownership. It is the owner's right to possess and use the property. Back to the top Why is transferring the title to real estate different from transferring the title to other items, such as a car? Because land is permanent and can have many owners over the years, various rights in land may have been acquired by others (such as mineral, air or utility rights) by the time you come into possession of it, even if the land has never before been built upon. So in order to transfer a clear title to a piece of land, it is first necessary to determine whether any rights are outstanding.

What is a title search? A title search is a detailed examination of the historical records concerning a property. These records include deeds, court records, property and name indexes, and many other documents. The purpose of the search is to verify the seller's right to transfer ownership, and to discover any claims, defects and other rights or burdens on the property. Back to the top What kinds of problems can a title search reveal? A title search can show a number of title defects and liens, as well as other encumbrances and restrictions. Among these are unpaid taxes, unsatisfied mortgages, judgments against the seller and restrictions limiting the use of the land. Back to the top

Are there any problems that a title search cannot reveal? Yes. There are some "hidden hazards" that even the most diligent title search may never reveal. For instance, the previous owner could have incorrectly stated his marital status, resulting in a possibly claim by his legal spouse. Other "hidden hazards" include fraud and forgery, defective deeds, mental incompetence, confusion due to similar or identical names and clerical errors in the records. These defects can arise after you've purchased your home and can jeopardize your right to ownership. Back to the top What is title insurance? Title insurance is your policy of protection against loss if any of these problems - even a "hidden hazard" - results in a claim against your ownership. Back to the top How much could I lose if a claim is filed against my property? That depends on the claim. In an extreme case, you could lose your entire home and property - and still be liable to pay off the balance of your mortgage. Most claims aren't that dramatic, but even the smallest claim can cost you time, money and aggravation, and you may have to pay costs for a legal defense.

How does title insurance protect my investment if a claim should arise? If a claim is made against your property, title insurance will, in accordance with the terms of your policy, assure you of a legal defense - and pay all court costs and related fees. Also, if the claim proves valid, you will be reimbursed for your actual loss up to the face amount of the policy. Back to the top The owner of the property has a deed. Isn't that proof of ownership? Not necessarily. A deed is just a document by which the right of ownership in land is transferred, whatever that right may be. It's not proof of ownership, and it doesn't do away with rights others may have in the property. In addition, a deed won't show you liens or claims that may be outstanding against the title. Back to the top Wouldn't an abstract show property limitations and restrictions? Maybe - and maybe not. An abstract is a history of the property title as revealed by the public records. Abstracts may contain errors and do not disclose "hidden hazards" that can threaten your property title if you do not have a title insurance policy. Back to the top What about an attorney's opinion? An attorney's opinion is based on a search of the public records. So, once again, even the most exhaustive search of these records may not reveal everything. Unlike a title insurance company, an attorney is not liable if you should suffer loss because of "hidden hazards" in the title. Back to the top

The owner of the property I want to purchase has lived in the home for only six months. He had a title search done six months ago. Why do I need another one? Because the owner could, in a very short time, do many things to encumber the title. For example, he could grant easements or construct improvements that encroach on adjacent property. He could get married or divorced, or have a lien filed against the property. If is necessary to conduct an up-to-date title search to uncover any such problems.

If the builder of my home already has title insurance on the property, why do I need it again when I purchase the land from him? A title policy insuring the builder does not protect you. Also, a great many things could have happened to the land since the builder's policy was issued. Liens, judgments and unpaid taxes for which prior owners were responsible may be disclosed after you purchase the property - causing you aggravation and costing you money.

Are there different types of title insurance policies? Yes. Basically there are two different types of policies - a loan policy and an owner's policy. The loan policy protects the lender's interested in the property as security for the outstanding balance under the buyer's mortgage. The owner's policy safeguards the buyer's investment or equity in the property up to the face amount of the policy. (title insurers in many states offer increased policy coverage through inflation endorsements to cover increases in value due to inflation.)

How much does title insurance cost? Probably a lot less than you think. Charges vary in different sections of the country, but generally the cost of title insurance (including search, examination and related services) amounts to about one percent, or less, of the cost of the property. And unlike other insurance premiums, which must be paid annually, a title premium is paid one time only, usually at settlement.

How long does my coverage last? For as long as you or your heirs retain an interest in the property an, in some cases, even beyond. Back to the top Where can I get title insurance? From any licensed title insurance company or its representatives operating in your state. When choosing a title insurer, it is important that you look for a company with expertise and experience, as well as the financial strength to protect you should a claim arise. Your broker or attorney can recommend such a company. Back to the top Your title insurance policy contains terms and conditions that may limit or restrict coverage. Consult your attorney for specific advice regarding your legal rights, and consult your real estate professional when selling or purchasing a home.