Selling a Troy House With a Mortgage Still Owed

Selling a Troy house with a mortgage balance means the payoff comes out of the purchase price at closing. The title company orders the payoff statement from the lender, applies the sale proceeds to that balance, and disburses the remainder to the seller. No agent commissions (often 5% to 6% combined when you list). We pay the closing costs. Your proceeds are our offer minus your mortgage payoff, any liens, and the normal property-tax proration. Close on the date you choose, typically two to four weeks after a signed agreement, depending on title.

What the payoff statement shows

The lender provides a payoff statement good through a specific date. It includes the unpaid principal, accrued interest to the closing date, and any fees the lender charges for release or processing. The title company requests this document once a purchase agreement is signed. The amount can change daily because interest accrues, so the statement has an expiration date. If closing moves past that date, a new statement is ordered. For context, the average 30-year fixed mortgage rate in the U.S. was 7.40% for the week of October 15, 2026 (Freddie Mac via FRED, October 15, 2026).

How the title company handles the payoff

At closing, the title company wires the payoff amount directly to the lender. The lender then releases the mortgage, and the discharge is recorded with the county. The seller does not send a check or coordinate the payment; the title company manages the transfer from the buyer's funds. Any escrow balance the lender holds for taxes or insurance is refunded to the seller separately by the lender after closing. For context, Oakland County, MI had 3,578 active listings in September 2026 (FRED / Realtor.com, September 2026).

Property-tax proration in Troy

Property taxes are prorated to the closing date. If you've already paid a bill that covers days after closing, you get a credit for those days and the buyer is charged for them. This proration appears on the settlement statement. The exact calculation uses the local tax calendar and the closing date. For context, Zillow's typical home value for Oakland County was $365,826 in September 2026, up 2.3% from September 2025 (Zillow Home Value Index, September 2026).

Liens beyond the mortgage

A title search may reveal other liens: home equity lines, tax liens, judgment liens, or contractor liens. Each must be paid at closing before the seller receives proceeds. The title company lists every lien on the settlement statement with its payoff amount. If a lien is disputed, you can pay it to clear title or negotiate a release yourself; the title company needs it paid or released before closing. In ZIP code 48083 (Troy area), the median listing price was $386,225 in September 2026; the median listing had been on the market 36 days, 41 homes were listed for sale, and 25% of listings had a price cut (Realtor.com research data, September 2026). In ZIP code 48085 (Troy area), the median listing price was $499,450 in September 2026; the median listing had been on the market 40 days, 66 homes were listed for sale, and 19% of listings had a price cut (Realtor.com research data, September 2026).

Net proceeds calculation

Start with the purchase price. Subtract the mortgage payoff (principal, interest to closing, lender fees). Subtract any other lien payoffs. Subtract the property-tax proration owed by the seller. The result is the seller's net cash at closing. No agent commissions (often 5% to 6% combined when you list). We pay the closing costs. Your proceeds are our offer minus your mortgage payoff, any liens, and the normal property-tax proration. For a comparison of what a listed sale nets after repairs, commissions, and holding costs, see Cash offer vs. listing: the real net on a house that needs work. For context, Zillow's typical home value for Troy was $454,091 in September 2026, up 1.9% from September 2025 (Zillow Home Value Index, September 2026). Your net is figured from the actual purchase price, not an index.

Closing timeline and the payoff date

Close on the date you choose, typically two to four weeks after a signed agreement, depending on title. The payoff statement is ordered early in that window. If the lender takes several days to respond, the closing date may shift. Once the payoff is confirmed, the title company schedules the closing. The seller signs the deed and closing documents; the buyer funds the purchase; the title company pays off the mortgage and records the discharge. The median days on market for listings in Oakland County, MI was 39 days in September 2026 (FRED / Realtor.com, September 2026), a timeline that differs from a direct sale where the closing date is set by agreement.

Remote and inherited sales

If the seller lives outside Michigan or the property is part of an estate, the same payoff process applies. If you can't sign in person, ask the title company about your signing options. The estate's personal representative signs on behalf of the estate. The mortgage payoff is still ordered from the lender and paid at closing. Probate stays with the estate and its attorney. The median listing price in Oakland County, MI was $400,000 in September 2026 (FRED / Realtor.com, September 2026), a county-level benchmark for properties in the area.

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General information, not legal advice.