The seller agrees to pay commission fees and Realtor fees (if applicable) to the real estate agents in the transaction. A Realtor fee is a flat fee charged to seller or buyer or both to offset the costs of processing paperwork.

Homeowner’s Insurance

The buyer is responsible for purchasing a homeowner’s policy prior to the closing.

Title Insurance

The financial responsibility for title insurance varies:

Owners —Typically paid by seller & insures buyer of clear title.

Mortgage —Typically paid by buyer & insures lender of clear title and a valid lien on the property.

Closing Fee

Fee charged to buyer and/or seller to prepare closing documents and oversee execution of closing documents.

Assessment and Liens

Any assessments and liens on the property need to be addressed in the Purchase Agreement. If the buyer intends to assume existing Liens or Assessments they must obtain approval from their lender if they are obtaining a mortgage.


This can be an expense for buyer or seller depending on when the closing takes place. Many things can be prorated in a purchase contract.  Below is a small list that includes but is not limited to possible prorations:

Association Dues  – If the property has a Homeowners Association the dues can be negotiated for proration.

Propane Usage – If the property has propane gas the existing propane remaining in the tank can be negotiated for proration.

Water and/or Sewer – If the property has either or both public water and/or sewer it can be negotiated for proration.

Rents – If the property is a rental/income property the current monthly rental payment can be negotiated for proration.

Taxes – Taxes are billed according to the municipality the property lies in and usually a purchase agreement has  who is responsible to pay any due and owing taxes at closing,  however a tax proration is a separate agreement within the purchase contract and can be negotiated as follows:

Tax Proration

A tax proration is a matter of negotiation between buyer and seller and there is not a uniform tax proration in the State of Michigan.  In many counties, including Jackson, the local Board of Realtors will have a method of tax proration printed in the purchase agreement.  If buyer and seller want to prorate taxes differently they must do so in writing and any such agreement would be signed by both parties.  It then becomes a binding contract.  Please note that sometimes the parties agree not to prorate the taxes.