Calculate estimated net proceeds
Net proceeds are what is left after you subtract every cost and payoff from the sale price. Depending on the transaction documents, that may include mortgage payoffs, transfer taxes, brokerage compensation, title or closing charges, tax prorations, assessments, seller concessions, and negotiated repairs or credits.
A realistic net-proceeds estimate clarifies what will remain for another purchase, a move, or savings. Prepare it before setting the list price, then update it when the sale terms change.
Michigan transfer taxes, prorations, and payoffs
Michigan law imposes state and county real estate transfer taxes on covered conveyances. Rates are based on the consideration or value specified by statute, and exemptions can apply to particular transfers. Confirm the current treatment with the Register of Deeds, Treasury, and the closing or legal professional handling the transaction.
The local taxing unit issues current property-tax bills, commonly on summer and winter cycles. The purchase agreement and closing figures determine whether and how the parties prorate those bills. Confirm the stated proration method and paid status rather than assuming a seller credit applies in every sale.
If you still carry a mortgage, the payoff amount may be higher than your current balance because of accrued interest. Your lender can provide a written payoff quote with a good-through date.
How to build the estimate
- Use a sale price supported by comparable sales, not an online estimate alone.
- Subtract the mortgage payoff and any home equity line balances.
- Include applicable Michigan state and Washtenaw County transfer taxes.
- Include title, closing or escrow, and recording fees shown by the closing provider.
- Account for prorated property taxes and any unpaid assessments.
- Include any seller concessions or repair credits you expect to give.
- Subtract commission and any other brokerage fees per your listing agreement.
A separate tax calculation
A taxable gain may result from a sale, but gain is calculated under tax rules rather than from the closing proceeds alone. Our guide tocapital gains on a home sale covers the federal and Michigan rules you should verify with your CPA.