During a listing presentation, a Michigan salesperson tells her prospective seller client that the buyer will pay the Michigan real estate transfer tax as part of their closing costs. The seller agrees to list with her based in part on this advice. Which of the following best describes the salesperson's statement?
Correct Answer
A) The statement is incorrect because Michigan law places the transfer tax obligation on the seller, not the buyer
The salesperson's statement is incorrect. Under the Michigan Real Estate Transfer Tax Act (MCL 207.502), the transfer tax is legally imposed on and paid by the seller (the grantor) at closing. Advising a seller that the buyer will pay the transfer tax is a material misrepresentation that could expose the salesperson to disciplinary action under the Michigan Occupational Code (MCL 339.2501 et seq.). While parties may contractually agree to shift costs, the legal default obligation rests with the seller.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
A VA loan is a mortgage guaranteed by the Department of Veterans Affairs available to eligible veterans, active-duty service members, and surviving spouses. It offers no down payment and no private mortgage insurance requirements.
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