Buyers Paying Sellers a Transaction fee NOT in Michigan

Contract on a new homeMichigan Association of Realtors offers a free legal hotline for Realtors in the State of Michigan to use. We can call in with questions to get a clarification on Michigan law or situations to get advice.

Every month in our MAR updates, a legal question is proposed to McClelland and Anderson the attorney’s for MAR. The question was interesting this month as I recently had a buyer agent encounter this exact situation.

Situation: A home is listed by ABC Realty, a buyer agent brings an offer to the listing agent. When reading the remarks in the MLS information it states, buyer must pay a transaction fee in the amount of $295, to ABC Realty at closing.

The agents are asking MAR ?

Is this legal?

The answer is No.

Basically it is permissible for the listing broker to ask, however, he can not require the buyer to pay as the buyer is not under a contractual relationship with the listing brokerage.

•1) ABC Realty has a relationship with the seller in regards to the listing contract.

2) ABC Realty can not create an enforceable obligation against the buyer through the MLS.

•3) The only time it would be permissible is if the transaction fee was between the buyer and seller noted in the sales contract.

Bottom line… the buyers do not have to pay the sellers a transaction fee. If you are representing a buyer you can ask for a transaction fee, or a buyer agency fee but that is your contract with the buyers, not the buyers contract with the sellers.


Comments

comments

7 thoughts on “Buyers Paying Sellers a Transaction fee NOT in Michigan

  1. I am having a hard time wrapping my head around this, the buyers do not have a contractual relationship with the sellers, how can this be enforced. This was sent out by MAR and since I have started to see it wanted to post MAR’s legal council advice on it. How can they NOT present an offer, this is NOT right or legal.

  2. I have a job offer out of state, conditional on sale of our home within 4 mos. How long are homes on the market now in Saline ? Home value is about 190K and located in Crestwood/Knollwood area.

  3. This is definitely a head scrather. In Spring Texas its common for the listing or selling broker to have an administrative fee charged to their client but not to the other party that they do not represent. How can this be? Another example of the importance of reading all the data in the MLS listing.

  4. I read your blog for quite a long time and should tell you that your posts always prove to be of a high value and quality for readers.

Thoughts?