Expert: Jessica Bryan - 8/10/2007

Question
Hello, we live in MI.  Realtor prepared a sellers net sheet for us and I have never heard of the seller paying some of these.  can you verify?  I will cut and paste his #'s.  We were told to list the house for $159,900.  Hoping you can shed some light on these #'s and add comments.  Thanks!!

Michigan Transfer Tax $1199.25
Michigan Revenue Stamps $175.89 -  both are seller costs in the transaction, when you buy a home you do not pay 6% sales tax but when selling you pay ‘transfer tax’..correct?

Title Insurance $675 - please explain what this is in detail.  I thought only a buyer would pay this is. I was never aware a seller needed to purchase a plan?

Recording Fee $75 –  this is a Title fee for recording the transaction with the county, not a realtor fee?

Unpaid Taxes, Assessments or Liens $ 0

Survey $ 0

Closing Fee $175 –  this is a Title fee as well and not a realtor Fee?

Broker/Marketing Fee $11193 - I think 7% is too much for such a small home

Well/ Septic Inspection $ 0

Property Inspections $ 0

Required Repair Costs $ 0

Buyers Closing Costs or Points $ 0

Document Prep/ Underwriting Fee $ 0

Home Warranty (if applicable) $379 –  this is your choice to offer or not...true?  any advantage?  

Answer
Hello;
I am not sure of the costs and taxes in individual states, but I can say that there should be no title insurance fee for you to pay since this is a buyer's expense and choice.  In addition, the recording fee is usually a buyer's fee as well. These fees can vary depending upon the area in which you live, but I have not heard of the seller paying them.  Since this seems to be a preliminary estimate from the listing agent you should discuss each of these with the agent.  As for 7 percent commission, I cannot comment about this.  Each agent is an independent contractor and can set their own fees.  If you think that the marketing fee is too high then you can discuss and negotiate the fee with the agent before signing a listing agreement.

As for the home warranty; it is desirable to offer one particularly in an older home since it provides the buyer with peace of mind when moving in to a home that if something breaks for that first year they won't have heavy expenses to replace and/or repair.  Unfortunately, these home warranties are not always that good and often they don't cover replacement costs or some repairs. You should read the fine print before purchasing one of these.

~Jessica Bryan