Kevin is a licensed salesperson in Michigan who is helping his seller client, Donna, understand her closing costs. Donna asks Kevin who actually pays the Michigan real estate transfer tax and whether it can be negotiated. Kevin correctly advises Donna that under Michigan law, the transfer tax is the seller's obligation, but that the parties may address it in the purchase agreement. Which of the following additional statements by Kevin would be CORRECT?
Correct Answer
A) The state transfer tax is $7.50 per $1,000 and the county transfer tax is $1.10 per $1,000, and both are typically the seller's responsibility
Kevin's correct statement is that the state transfer tax rate is $7.50 per $1,000 and the county transfer tax rate is $1.10 per $1,000, with both being the seller's default obligation under Michigan law (MCL 207.502 and the County Real Estate Transfer Tax Act). These rates are distinct and must not be confused or combined into a single flat rate.
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Related Topics & Key Terms
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Related Concepts
RESPA is a federal law that requires lenders to provide borrowers with information about settlement costs, prohibits kickbacks and referral fees, and limits escrow account deposits. It applies to federally related mortgage loans.
The secondary mortgage market is where existing mortgage loans are bought and sold between lenders, investors, and government-sponsored enterprises (GSEs) like Fannie Mae, Freddie Mac, and Ginnie Mae.
TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
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