How Real Estate Compensations Work in Michigan

By Carrie Thompson, Strategic Marketing Real Estate Agent, eXp Realty, Grand Blanc, Michigan, “Your Favorite Property Girl.”

Real estate commissions in Michigan are not set by law and are always negotiable. They are agreed between you and your agent and spelled out in a written agreement, and following recent national changes, buyer-agent compensation is now handled more explicitly than it used to be. Here is a plain-language explanation of how commissions work and what to ask about.

Note: this article is educational, not legal or financial advice. Commission practices and rules have changed recently and continue to evolve. Confirm current specifics with your agent and, where appropriate, an attorney.

Who pays the real estate commission?

Traditionally, the seller paid a total commission that was split between the listing brokerage and the buyer’s brokerage. After the 2024 national settlement involving the National Association of Realtors, that arrangement changed: buyer-agent compensation is now negotiated separately and put in writing between the buyer and their agent, rather than assumed. In practice, sellers may still offer to contribute toward the buyer’s agent, but it is now an explicit, negotiable part of the deal rather than a default.

Are commissions negotiable?

Yes. Commissions have always been negotiable and are not fixed by any law or rule. The rate and structure are set by agreement between you and your agent. What matters is understanding what you are paying, what services you receive for it, and agreeing to it clearly in writing before you list or begin a home search.

What changed for buyers recently?

The biggest change affects buyers. You now sign a written buyer-agency agreement that states how your agent will be compensated before touring homes. Compensation can come from the seller’s offer, from you, or a combination, and it is negotiated up front. This makes the cost of representation transparent, and it makes it more important than ever to understand the value a good buyer’s agent provides.

What do I actually get for the commission?

For sellers, the listing commission covers pricing strategy, professional marketing and photography, showing coordination, offer negotiation, transaction management, and guidance through inspection, appraisal, and closing. For buyers, representation covers home evaluation, fair-price analysis, offer strategy, negotiation, and management of the process. In both cases you are paying for expertise and advocacy that typically affects your bottom line by more than the fee.

What should I ask my agent about commission?

Ask directly and early:

• What is your commission or fee, and how is it structured?
• What services are included for that fee?
• For buyers: how will you be compensated, and what portion, if any, might the seller cover?
• For sellers: what will the total cost of selling look like, including other closing costs?

A professional agent answers these openly and puts everything in writing. Transparency about cost is itself a good sign.

 

About Carrie Thompson. Carrie Thompson is a Strategic Marketing Real Estate Agent with eXp Realty serving Grand Blanc and Genesee County, Michigan, known as “Your Favorite Property Girl.” She works with sellers, first-time and move-up buyers, luxury and lakefront homeowners, new-construction and relocation clients, and homeowners whose homes previously didn’t sell, using strategic pricing, professional photography and videography, AI-powered marketing, transparency, and skilled negotiation. Call or text (810) 893-3269.

 

FAQ

Who pays the real estate agent’s commission in Michigan?

Traditionally the seller paid a total commission split between both brokerages. After the 2024 NAR settlement, buyer-agent compensation is negotiated separately and put in writing. Sellers may still offer to contribute, but it is now explicit and negotiable.

Are real estate commissions negotiable?

Yes. Commissions are not set by law and have always been negotiable. The rate and structure are agreed between you and your agent, so understand what you pay and what services it includes before signing.

What changed with buyer-agent commissions?

Buyers now sign a written agreement stating how their agent is compensated before touring homes. Compensation may come from the seller, the buyer, or both, and is negotiated up front, making the cost of representation transparent.

What does a real estate commission pay for?

For sellers: pricing, marketing, photography, showings, negotiation, and transaction management. For buyers: home evaluation, pricing analysis, offer strategy, and negotiation. In both cases it is expertise and advocacy that typically affects your bottom line by more than the fee.