Home Selling in Saginaw>Question Details

Dcatenac, Home Seller in Saginaw, MI

We are selling a house in Saginaw Mi and have been told by our agent, that we have to pay a stamp tax. Is this true or should the buyer pay it?

Asked by Dcatenac, Saginaw, MI Wed Nov 10, 2010

I saw where someone else had asked this question and they were told that normally the buyer pays the stamp tax, so I am concerned that our agent is taking advantage of us!! He has seemed to be working more for the buyer than us....the seller!! There was no discussion about this expense.......just his comment that......"You have to pay a Michigan stamp tax."

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Hi! In Michigan, it is customary for the SELLER to pay TWO types of taxes at close. One is called the TRANSFER TAX and the other is called the STAMP TAX. The buyer NEVER pays these unless it is very specifically mentioned in the purchase agreement and that would be unusual. The only time I see these taxes paid for by the buyer is in the event of a foreclosure/REO where they specifically state they won't pay these taxes and they are the responsibility of the buyer.

The Transfer tax goes way back to Proposal A days when we completely altered the way we do property taxes in Michigan. I'm sure you are faimilar with Homestead and Non-Homestead taxes. This also came out of proposal A. Prior to that proposal, the only tax seller's paid at closing was the STAMP tax. Now we pay both. Its been that way for years and years.

The TRANSFER tax is 3/4 of 1% of the sales price (0.75%). So, if your sale price is $100,000, your transfer tax would be $750.

The STAMP tax is $1.10 per $1,000 of sales price. So, on a $100,000 home, the STAMP tax would be $110.

Most agents will lump these 2 taxes together and simply call them the "Transfer tax" and tell you the rate is actually 0.86% instead of 0.75%. That is because they are simply adding that stamp tax rate of 0.11% to the 0.75%. Either way, the stamp tax is a valid tax and the seller has always paid it in Michigan, even before Proposal A. It sounds like you have a closing coming up! Congratulations!!

Randy Charboneau
Independence Realty
616.262.0001
http://www.independence-realty.com

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1 vote Thank Flag Link Wed Nov 10, 2010
As stated, there is a formula that can result in the waiving of the transfer tax. It is more than just a function of taxable value comparisons. Your real estate agent should be able to counsel you further there.

Good luck.
Web Reference: http://DoorToDreams.com
0 votes Thank Flag Link Thu Nov 11, 2010
The Real Estate Transfer Tax (Act 134 of 1966 207.502 Section 2) states that the seller is responsible for this tax. So, by state law it is the sellers responsibility. You may also google State Real Estate Transfer Tax Act 330 of 1993 207.523 Section 3.
0 votes Thank Flag Link Thu Nov 11, 2010
Yes it is a seller expense, but and this is a big BUT, check your assessment when you purchased the home. If it is lower, than when you sell you can have it waived.
Your Title Company has the form, fill it out and they keep it on file. Then it will not show up on the seller expense side.
0 votes Thank Flag Link Thu Nov 11, 2010
Randy is right. It is customary for the seller to pay the tax. You could also confirm with the Title Company if you want an unbiased opinion. It sounds like your Agent may be representing both you and the Buyer. It also sounds like he/she may have lost your trust somewhere along the way. That is unfortunate, since most of us place a high value on Client satisfaction. I hope your suspicion proves to be wrong and you have a susscessful closing.
0 votes Thank Flag Link Wed Nov 10, 2010
Presume you are speaking about transfer taxes. "normally" seller pays - especially if not addressed in the purchase agreement.)(law says if not addressed seller pays) If you are still negotiating an agreement, it can be negotiated that buyer can pay. Check about whether your SEV is lower now than when you purchased - a minor "out" of the tax.
0 votes Thank Flag Link Wed Nov 10, 2010
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