Michigan guide
Michigan Compensation Disclosure Requirements Under MCL §339.2517
In Michigan, your real estate agent has to tell you in writing how they get paid before or when you sign a buyer agency agreement.
Reading as buyer.
TL;DR
In Michigan, your real estate agent has to tell you in writing how they get paid before or when you sign a buyer agency agreement. That agreement spells out your agent's fee and explains what happens if the seller's side doesn't cover all of it — you may owe the difference. Your agent also has to disclose any referral fees they earn from lenders, title companies, or other providers tied to your purchase.
Before you start — 8 things to know
Michigan law (MCL §339.2517) makes your buyer's agent disclose how they're paid before or at the time you sign a buyer agency agreement, including money they receive from someone other than you.
After the settlement, the Michigan Realtors buyer agency form spells out your agent's fee in writing before you start touring or making offers.
Your Michigan buyer agency agreement must address what happens if the seller's side does not offer enough to cover your agent's fee — you might end up paying the difference yourself.
If your buyer's agent earns a referral fee from a mortgage lender, title company, or other service provider connected to your purchase, they must disclose it to you under Michigan law.
RESPA, a federal law, bans hidden kickbacks on settlement services for a federally related mortgage, so any referral arrangement tied to your home purchase must be disclosed.
If two brokers split a referral fee for sending you over, that arrangement must be disclosed — undisclosed referral fees are a prohibited practice under MCL §339.2512.
As a buyer, you do not have to consent to the referral fee itself unless there is a conflict of interest, but you have the right to know it exists and how much it is.
Cooperative compensation from the seller's side is no longer guaranteed in Michigan, so your buyer agency agreement must clearly state who is paying your agent.
The timeline — step by step
Before or at the moment you sign a buyer agency agreement in Michigan, your agent gives you a written disclosure of how they will be paid.
You and your buyer's agent fill out the buyer agency form, which states the agent's fee as a percent or flat dollar amount and lists who pays it.
When you tour homes or write offers, your buyer's agent confirms whether the listing side is offering enough cooperative compensation to cover the fee in your buyer agency agreement.
If the seller's side offers less than your agent's contracted fee, you and your agent decide whether to ask the seller to cover the gap in the offer or for you to pay the difference yourself.
Before closing, your buyer's agent discloses any referral fees they are getting from a mortgage lender, title company, or other service provider tied to your purchase.
At closing, the settlement statement shows exactly who is paying your buyer's agent and how much, and it must match the disclosure given when you signed the buyer agency agreement.
Common questions
When does my Michigan buyer's agent have to tell me how they get paid?
Will the seller's side still pay my buyer's agent in Michigan?
What happens if the seller offers less than my buyer's agent's fee?
Does my buyer's agent have to tell me about referral fees from lenders or title companies?
Is it OK for my buyer's agent to keep a small referral fee secret?
Do I have to approve the referral fee my buyer's agent receives?
Glossary
2 terms
- NAR — National Association of Realtors
- The national trade group for real-estate agents. The 2024 NAR settlement is the legal deal that changed how buyer's agents get paid.
- MLS — Multiple Listing Service
- The shared database agents use to list and find homes for sale. Most homes you'll see online started here.
Last updated