When it comes to buying or selling a home in Michigan, being well-versed in real estate commission structures is essential. Changes implemented in 2024 have aimed to increase clarity and improve the flow of information regarding these fees. These updates aim to promote transparency and allow for more informed decisions.
This guide will explain how real estate commissions function in Michigan and what you need to consider for your next real estate deal, whether you’re a first-time homebuyer or have been through the process before.
Current state of the Michigan housing market
Before we explore commission structures, it’s useful to get an understanding of Michigan’s current housing market:
| Median Home Sale Price | $270,000 |
| Housing Supply | 36,677 (+7.1% YoY) |
| Homes Sold Above List Price | 35.9% (-6.3 pts YoY) |
Understanding real estate commissions in Michigan
What are real estate commissions?
Real estate commissions are the fees paid to agents responsible for facilitating the buying or selling of homes. These fees are usually calculated as a percentage of the property’s final sale price and are paid at closing.
Who pays the commission?
Traditionally, sellers had the responsibility of paying both their agent’s commission and the buyer’s agent fee. However, as of August 17, 2024, buyers must now sign an agreement that outlines their agent’s commission before they can start touring homes.
Although buyers can still negotiate for the seller to cover a portion of these fees, the commission is now more flexible and entirely negotiable.
Average real estate commission rates in Michigan
Commission rates in Michigan can vary depending on factors such as location, market conditions, and the range of services provided by the agent. Below is a breakdown of typical commission costs in some of Michigan’s largest cities:
| City | Median Home Sale Price | 1.5% Real Estate Commission | 3% Real Estate Commission | 5% Real Estate Commission |
| Detroit | $96,395 | $1,446 | $2,892 | $4,820 |
| Grand Rapids | $282,338 | $4,235 | $8,470 | $14,117 |
| Warren | $205,000 | $3,075 | $6,150 | $10,250 |
At Redfin, we provide competitive rates, offering sellers listing fees as low as 1%*. While buyer fees can differ by location, we strive to keep them affordable, ensuring your home stands out in the marketplace.
Can you negotiate real estate commissions in Michigan?
Absolutely! Commissions in Michigan are open to negotiation. Real estate agents may be willing to adjust their fees based on specific details such as the nature of the transaction, the property’s appeal, and the services they are providing.
When entering into negotiations, consider the agent’s knowledge of the local market, their marketing approach, and your home’s condition.
Tips for a successful negotiation
- Talk to multiple agents: It’s wise to consult with several agents to compare their services and commission rates.
- Consider performance-based incentives: Offer bonuses if your agent can sell your home quickly or for a price above the listing.
- Utilize your property’s strengths: If your home is in a sought-after location or experiencing high demand, you might have greater bargaining power to negotiate lower fees.
Michigan real estate commission FAQs
What are the new real estate commission rules in 2024? Two major updates were introduced this year:
- Buyers must now sign a document specifying their agent’s commission before touring homes.
- In many markets, buyer agent commission details are no longer visible in MLS listings.
Learn more about the real estate commission changes here.
How do the changes impact buyers in Michigan? Buyers in Michigan are now required to agree in writing to their agent’s commission before they start looking at homes. However, they still have the opportunity to negotiate with sellers to cover some or all of these fees during the offer process.
How do the changes impact sellers in Michigan? Sellers now need to decide how much they are willing to contribute toward the buyer’s agent commission, with their agent’s guidance. This amount will be finalized during the offer negotiations.
How do you find a real estate agent in Michigan? Whether you’re buying or selling in Michigan, Redfin agents are available to guide you through every step, ensuring that you have a full understanding of the transaction process.
How can you avoid fees? Yes, it’s possible to avoid commission fees by selling your home without the help of an agent, commonly known as a For Sale By Owner (FSBO) transaction. However, you’ll be responsible for all aspects of the sale, including marketing, negotiation, and paperwork.
*Listing fee subject to change, minimums apply. Any buyer’s agent fee the seller chooses to cover not included. Listing fee increased by 1% of sale price if buyer is unrepresented. Sell for a 1% listing fee only if you also buy with Redfin within 365 days of closing on your Redfin listing. We will charge a 1.5% listing fee, then send you a check for the 0.5% difference after you buy your next home with us. Learn more here.
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