Michigan law does not set a realtor commission: what you pay is whatever you and your broker agree to in a signed, written agreement, and it is negotiable. As a seller, you pay your listing broker; the buyer's agent is paid under the buyer's own written agreement, and you pay part of it only if you choose to.
This guide covers what the law says, who pays each agent since the practice changes of August 17, 2024, where commission shows up on your closing statement, and what to ask before you sign a listing agreement.
Is there a standard realtor commission in Michigan?
No. The part of the Michigan Occupational Code that licenses brokers and agents (MCL 339.2501 to 339.2518) sets no rate, minimum or maximum. It does set who may be paid: an agent may take a commission only from the broker they work for (MCL 339.2510), and a licensee may not share a commission with someone who is not licensed (MCL 339.2512).
Two other rules apply to every Michigan listing:
- It must be in writing. A promise to pay a commission on the sale of real estate is void unless it is written and signed by the person who will pay it (MCL 566.132).
- The listing agreement must say discrimination is prohibited, by the broker, the agent and the seller (MCL 339.2515).
You will see average commission figures online. They come from surveys run by companies that sell real estate services, not from any official source, so we don't quote them. The figure that matters is the one in your agreement.
Who pays realtor commission in Michigan?
Since August 17, 2024, under the practice changes from the National Association of REALTORS® settlement:
- The seller pays the listing broker, as set in the listing agreement.
- The buyer's agent is paid under a written buyer agreement, signed before the buyer tours a home with that agent. It must state the amount or rate in objective terms (a flat fee, a percentage, or $0), and the agent may not receive more than that from any source.
- No Michigan law says the seller pays the buyer's agent. A buyer can ask the seller to pay some or all of it, for example in the offer, and the seller can say yes, no, or part.
Both agreements must say, conspicuously, that broker fees and commissions are fully negotiable and not set by law.
Can the seller still pay the buyer's agent?
Yes, if you choose to. What changed is how it is offered:
- Not on the MLS. An offer of compensation to buyers' agents can no longer appear on the MLS. Your agent can still share it off the MLS, for example on a website or flyer.
- Only with your written approval. Before your agent offers or pays anything to a buyer's agent, they must disclose it to you in writing, with the amount or rate, and get your approval.
- Concessions are separate. You can offer buyers a concession on the MLS, such as a credit toward their closing costs. On the MLS it is stated as one total and cannot depend on whether the buyer has an agent. A concession usually binds you only once it is in the purchase agreement.
Whether to offer anything is a pricing and marketing decision for your home. Your agent should show you the dollar effect of each choice on your proceeds before you list.
Where commission shows up at closing
Commission is normally paid at closing from the sale proceeds. The title company pays each broker, and you don't write a separate check.
When the buyer uses a loan, the federal Closing Disclosure lists real estate commissions under "Other" closing costs, with the full amount paid to each brokerage. Its summary of the seller's transaction adds up what is due from you at closing, including the closing costs you pay and your loan payoff, and subtracts it from what is due to you (12 CFR 1026.38). Any other fee a broker charges you appears on its own line with a description, not folded into the commission. In a cash sale, the title company's settlement statement shows the same lines.
How commission changes what you take home
Commission is one of several deductions from your sale price. In Michigan, you also pay the transfer tax: $8.60 per $1,000 of the price, state and county together, and the seller is liable for it (MCL 207.523 and 207.525). How the transfer tax works, or calculate it for your price.
Illustrative example, for a $350,000 sale. The 2 percent listing commission is an assumption to show the math, not a typical or recommended rate:
| Line | Amount |
|---|---|
| Sale price | $350,000 |
| Listing commission at an assumed 2 percent | minus $7,000 |
| Compensation to the buyer's agent, if you agreed to it | Each 1 percent is $3,500 |
| State and county transfer tax | minus $3,010 |
| Raven transaction fee | minus $395 |
| Title, settlement, loan payoff, tax prorations, credits | From quotes and your purchase agreement |
On those assumptions, the lines that are known come to $10,405 before anything you agree to pay the buyer's agent. Your own numbers depend on your agreements, your loan and your home.
What to ask before you sign a listing agreement
The listing agreement is where your commission is set, so read it before you sign:
- How is the commission figured? A percentage of the price, a flat fee, or a mix, and what it comes to in dollars at your likely price.
- Does it include anything for the buyer's agent? Or is that a separate decision you make later, in writing, with the amount stated?
- When is it earned? Only if the sale closes, or in other cases too, such as a buyer you find yourself.
- How long does it last, and how do you end it? The term, the expiration date, any cancellation terms, and whether a commission can still be owed for a buyer who saw the home during the listing.
- What services are included? Michigan law sets minimum duties and services a broker owes a client unless you knowingly sign a limited service agreement (MCL 339.2512d and 339.2517).
- Are there other fees? Ask for every fee in writing, with who pays it and when.
Before you share anything confidential, the agent must give you Michigan's written agency disclosure, which explains whom they represent (MCL 339.2517).
Raven's fee
Raven charges a $395 transaction fee on each listing side, paid at closing and shown on your closing statement. It is in your listing agreement from the start, and what your agent is paid is agreed in writing before any work starts. Our fees.
Get your own numbers
We can walk you through an estimated closing statement for your home, line by line, before you sign anything. It starts with what the home is likely to sell for: ask for a home value estimate, or read how we sell homes.
