The Michigan purchase agreement, clause by clause

Every Michigan home sale runs on one document. The title company closes to it, the lender underwrites to it, and when a deal goes wrong it is the only thing anyone argues about. In a sale without agents there is no brokerage form library and no one else watching the deadlines, so the buyer and seller need to understand what each clause does before either signs.

What follows is the order most Michigan residential agreements follow, with the statutory rules that sit underneath the ones that have them. It applies on the Michigan side of the region — Niles, St. Joseph, Dowagiac, Edwardsburg and the Berrien and Cass county townships. Indiana contracts work differently; see the Indiana purchase agreement guide for that side.

First principle: it must be in writing

Michigan's statute of frauds makes a contract for the sale of land void unless it, or a note or memorandum of it, is in writing and signed by the party making the sale. A handshake over the kitchen island, a text thread or a verbal "we'll take it" does not bind anyone. There is no single state-mandated purchase agreement form for private sales; buyers and sellers going direct usually start from a form supplied by a title company or an attorney, and every blank on it matters. Having a Michigan real estate attorney or the closing title company review a draft before signing is cheap insurance.

1. Parties, property and price

Name every owner on title as a seller — a spouse or co-owner who doesn't sign can't be made to convey. Identify the property by street address and tax parcel number, and attach the legal description from the seller's deed. State the price and how it will be paid: cash, a named loan type, or a land contract.

List what stays. Fixtures go with the house by default; appliances, window treatments, a shed on skids, a hot tub or a dock are exactly the items that cause closing-week disputes. Rural buyers should also know that Michigan requires every deed for unplatted land to state how many further land divisions are being transferred, and to carry a notice that the property may be near farm operations protected by the Michigan Right to Farm Act. If you are buying acreage outside town, ask the seller in the agreement how many divisions will convey. Buying rural property goes further.

2. Earnest money

The deposit shows good faith; it is not a down payment until closing. The agreement should say how much, who holds it, when it must be delivered and exactly which events return it to the buyer — a failed financing or inspection contingency, the seller's default, a title problem — and which events forfeit it. In a direct sale the natural holder is the title company that will close the deal, under written escrow instructions both parties sign. Never let earnest money sit in the seller's personal account; if the deal fails, getting it back becomes a lawsuit.

3. Contingencies: the buyer's exits

Each contingency is a door the buyer can walk through without losing the deposit, and each should have a deadline measured in days. How many doors a seller will tolerate depends on pace: Niles homes spent a median 44 days on market through June 2026 per the market report, which leaves more room to negotiate than an eight-day market does.

• Financing. The loan type, the maximum rate or down payment the buyer will accept, and the date by which a commitment must be obtained. Pre-approval before the offer makes this clause short.
• Appraisal. What happens if the appraisal comes in below the price — renegotiate, the buyer covers the gap, or either side may terminate. The low appraisal guide covers the options.
• Inspection. A window for the buyer's inspections and a procedure for what follows: accept, request repairs or a credit, or terminate. On properties with a private well or septic, name those inspections specifically; the Van Buren/Cass District Health Department, for one, offers well and septic inspections for home sales. What to inspect in this housing stock is its own guide.
• Sale of the buyer's home, if any. Sellers accept these reluctantly and should insist on a short deadline.

4. The seller's disclosure and the buyer's termination window

Michigan's Seller Disclosure Act requires the seller of a one- to four-unit home to deliver the statutory Seller's Disclosure Statement to the buyer before the seller signs a binding purchase agreement, and the seller must indicate compliance on the agreement, an addendum or a separate document.

If the statement, or an amendment to it, arrives after the agreement is signed, the buyer may terminate by written notice delivered within 72 hours if the disclosure was handed over in person, or within 120 hours if it was sent by registered mail. That right ends when the deed is delivered. The practical rule for sellers: attach the signed disclosure to the offer package and get the buyer's signed receipt before accepting. The Michigan seller's disclosure form guide walks the form itself.

Lead-based paint for homes built before 1978

Federal rules add a second disclosure. For pre-1978 housing the seller must give the buyer the pamphlet Protect Your Family From Lead in Your Home, disclose any known lead-based paint and hand over available reports, include the lead warning statement in the contract, and give the buyer 10 days to conduct a paint inspection or risk assessment unless the parties agree in writing to a different period or the buyer waives it. The seller keeps a signed copy for three years after the sale.

5. Title and closing

The seller agrees to convey marketable title by warranty deed, subject only to listed exceptions such as recorded easements. The buyer gets a title commitment and a set number of days to object to anything on it. By Michigan custom the seller pays for the owner's title policy and the transfer taxes, for which state law makes the seller liable; closing costs in Michigan lists every line. Name the title company, the closing date and whether time is of the essence — without that phrase, a missed date is easier to excuse.

6. Taxes, assessments and proration

This is the clause that produces the most confusion at Michigan closings, because the state bills property tax twice a year. The summer bill is issued in July and the winter bill on December 1. If the agreement is silent, the General Property Tax Act makes the seller responsible for taxes levied in the 12 months before closing from each levy date up to the day title passes — effectively treating the bills as paid in advance. Most agreements instead pick a basis, commonly "due date" or "fiscal year," and the difference can be real money. County treasurers describe proration as a negotiated term and a local custom, so write the method out in plain words rather than relying on a checkbox.

Two related points belong in the same paragraph of the agreement. Special assessments — sewer, paving, lake improvement — should be assigned explicitly, with any installments not yet billed named. And the buyer should understand that the seller's tax bill is not their future bill: taxable value uncaps the year after purchase, and the school millage depends on the buyer filing a principal residence exemption. The homestead exemption guide explains both.

7. Possession

Possession at closing is cleanest. When the seller needs a few days or weeks afterward, write an occupancy clause: a daily occupancy fee, a cash holdback from the seller's proceeds held by the title company until the keys are delivered, the condition the house must be in, who pays utilities and insurance in the interim, and what the seller forfeits per day of holdover. A seller who stays past closing without that language is a tenant with no lease, and removing them is a court matter.

8. Signatures, counteroffers and deadlines

An offer lapses at the time it states. A counteroffer is a rejection plus a new offer, not an acceptance with notes. Every change after signing should be a written, signed addendum; an email agreeing to a repair credit is not the same thing as an amended contract. Build a one-page calendar of every deadline — disclosure receipt, inspection window, financing commitment, title objection, closing, possession — and give a copy to the title company. MichianaRealty.com™ built its make-an-offer guide and closing checklist around exactly that calendar, and selling direct covers the seller's side of the same document.

Frequently asked questions

Does a Michigan purchase agreement have to be in writing?

Yes. Michigan's statute of frauds makes a contract for the sale of land void unless the contract, or a note or memorandum of it, is in writing and signed by the party making the sale. Verbal acceptances and informal messages do not bind either party, so every term and every later change should be in a signed document.

When can a buyer back out after receiving the seller's disclosure in Michigan?

Only when the disclosure arrives after the purchase agreement is signed. Then the buyer may terminate by written notice within 72 hours if the statement was delivered in person, or within 120 hours if it was delivered by registered mail. The right ends when the deed is delivered. Sellers avoid the issue by delivering the signed disclosure before accepting an offer.

Who holds the earnest money in a Michigan home sale without agents?

Usually the title company that will close the transaction, under written escrow instructions signed by both buyer and seller. The purchase agreement should state the amount, the deadline for delivering it, and exactly which events return it to the buyer or release it to the seller. It should not be deposited in the seller's personal account.

How are property taxes split in a Michigan purchase agreement?

By the method the agreement states, commonly a due-date or fiscal-year basis applied to the summer and winter bills. If the agreement says nothing, Michigan law makes the seller responsible for taxes levied in the 12 months before closing from each levy date up to the day title passes. Because customs vary by county, spell out the method in plain words.