How Much Do You Walk Away With? The Michigan Pre-Foreclosure Seller Net Sheet

When a Michigan homeowner decides to sell instead of letting the auction happen, the first question is rarely about paperwork. It is about money: after the mortgage, the back taxes, the fees the foreclosure added and the cost of closing, how much actually lands in my hands? That number is knowable. You can sit down at your kitchen table with a payoff letter and a pen and get within a few hundred dollars of it before you ever list.

This guide walks through how to sell house before foreclosure with the arithmetic in front of you, line by line, using Michigan’s real closing costs and real statutes. Our pillar guide covers the bigger strategy of selling your house before foreclosure in Michigan; this one is the net sheet.

Start with two numbers, not one

Homeowners often anchor on what the house is worth. Value is only half the equation. You need a defensible market value and a written payoff figure.

For value, look at what comparable homes in your neighborhood actually closed at in the last three to six months, not what they were listed for. Statewide, Michigan homes sold at a median price of about $298,872 in July 2026, up roughly 3.6% from a year earlier, according to Redfin — but county and neighborhood numbers matter far more than the state figure. A local agent will run comparables for free.

For the payoff, ask your servicer in writing. Under 12 CFR 1026.36(c)(3) you are entitled to an accurate payoff balance within a reasonable time and no later than seven business days after a written request. Ask for a quote good through your expected closing date and a per-day interest figure so the title company can update it. Remember the payoff is bigger than your loan balance: it includes accrued interest, escrow advances, and the attorney and publication fees the foreclosure added.

The Michigan seller net sheet, line by line

Here is the structure a title company will use. The percentages are typical Michigan ranges, not quotes.

The transfer taxes are statutory and easy to compute: together they run $4.30 per $500 of sale price, so a $300,000 sale carries about $2,580 in transfer tax, and the seller is the party liable. Everything else in the middle of the table is negotiable or situational. That is why two homeowners with identical houses can walk away with very different amounts.

Worked example: a $300,000 Michigan home

Say the house appraises and comps at $300,000. You owe $190,000 in principal and interest, the foreclosure added $4,500 in attorney and publication fees, and $6,000 of property taxes are delinquent.

• Sale price: $300,000
• Payoff including foreclosure fees: −$194,500
• Delinquent and prorated taxes: −$6,000
• Transfer taxes: −$2,580
• Commission at 5.5%: −$16,500
• Title policy, settlement, recording: −$2,200

Net to the seller: roughly $78,220. Sell the same house to a cash buyer at $260,000 with no commission and you net about $55,000 — less money, but a faster and more certain close. Neither answer is automatically right, which is exactly the trade-off we break down in cash offer versus listing during foreclosure. Run both columns before you decide.

What the auction would have paid you instead

This is the comparison that matters most, because it is the reason selling exists as a strategy at all. At a Michigan sheriff’s sale the foreclosing lender may credit bid up to the amount of the debt without bringing cash, so opening bids track what is owed rather than what the home is worth. If nobody bids above the debt, there is no surplus for you.

If a third party does bid higher, the surplus is not mailed to you automatically. Under MCL 600.3252 the officer conducting the sale pays surplus to the mortgagor, but subordinate lienholders can file a verified written claim first, and in practice the money often has to be pursued through the court. In our $300,000 example, an auction that closes at the debt amount hands you nothing while a normal sale hands you tens of thousands. The equity does not disappear at auction — it changes owners.

Timing: the number moves every week you wait

Two clocks push your net figure down. Interest and fees keep accruing on the payoff, and delinquent taxes accrue interest of one percent per month plus administration fees under Michigan’s three-year tax cycle (MCL 211.78a and following). After a sheriff’s sale you can still sell during the redemption period — six months in the standard case, twelve where the unpaid balance is 66⅔% or less of the original indebtedness (MCL 600.3240) — but by then your buyer’s money has to cover the full redemption figure, which is spelled out in our guide to how the Michigan redemption amount is calculated.

Practically, three moves protect the number: order the payoff and a preliminary title search the same week you decide, ask the foreclosing attorney about adjourning a scheduled sale once you have a signed purchase agreement, and price to sell rather than to test the market. The mechanics of getting from accepted offer to funded closing are laid out in how a pre-foreclosure closing actually works.

When there is not enough to cover everything

Sometimes the math comes out negative. That does not end the process; it changes the path. A short sale needs servicer approval and, in Michigan, the deficiency survives unless the approval letter expressly waives it. A deed in lieu may be cleaner. And if the gap is small — a few thousand dollars of taxes or fees standing between you and a sale that would otherwise net well — equity-based bridge funding can cover the shortfall at closing so the transaction survives. Free HUD- and MSHDA-approved counselors can walk the options with you at no cost (HUD, 800-569-4287), and Michigan’s Credit Services Protection Act bars anyone from charging you an advance fee for foreclosure-prevention help.

Do the arithmetic before you decide anything

Almost every homeowner we talk to overestimates what they owe and underestimates what they would keep. One payoff letter, one set of comparables and twenty minutes with the table above will replace weeks of dread with a real number. Once you have that number, you are not reacting to a foreclosure anymore — you are choosing between options, with the equity you built still on your side of the ledger.

All In Horizon provides asset-based bridge financing. Loan availability, terms, and timing depend on the property, equity position, and exit plan, and are subject to underwriting. This article is educational and is not financial, legal, or tax advice. Nothing here is a substitute for guidance from a licensed attorney.