What the agreement covers
A buyer broker agreement is the written contract between a buyer and a real estate agent's brokerage. It says who represents whom, what services the brokerage will provide, how long the agreement lasts, and how compensation is handled. Michigan law separately requires a written disclosure of the agency relationship before a potential buyer shares confidential information specific to a transaction with the licensee.
Ask for the proposed agreement early enough to read it before an agent-guided tour. The agreement may be exclusive or nonexclusive. Its term, geographic scope, services, compensation, and termination provisions depend on the document offered.
What Michigan buyers should expect to see
Michigan's agency-disclosure statute and a buyer broker agreement are related but distinct. The disclosure explains available agency relationships and duties. The agreement sets the actual business terms, including scope, services, duration, compensation, and any process for modification or termination.
Current National Association of Realtors MLS policy requires participating brokers working with a buyer to have a written agreement before touring a home. The policy also requires objectively ascertainable compensation. The agreement must state that broker fees and commissions are not set by law and are fully negotiable. Confirm how the policy applies to the brokerage's form before signing.
The agreement may also cover a for-sale-by-owner property, new construction, or a home listed by the same brokerage. It should explain how each situation will be handled.
Questions to ask before signing
- How long does the agreement run, and can it be terminated if the fit is not right?
- What geography does it cover? A single city, the whole county, or the state?
- What services are included, and what would cost extra?
- How is compensation calculated, and when is it owed?
- What amount could I owe, and how would any negotiated seller or listing-broker payment affect it?
- Will the same agent handle showings, offers, and closing, or is support shared across the team?