Copyright

Michigan Real Estate Statutory Requirements

Instructor: Tara Schofield

Tara has a PhD in Marketing & Management

Being an agent is exciting and offers great potential. It also requires following laws and regulations. Learn some of the basic rules you must follow as a real estate agent.

What Are Statutory Requirements?

In Michigan, there are laws or statutory requirements that govern how real estate agents will work and conduct business in Michigan. While these guidelines will help you get started, you must verify and get approval on your work from your managing broker. Consider him or her a resource and the person responsible for helping you get up and running in your career.

However, there are rules that you must understand and abide by, that are in addition to rules that may exist in your broker's agency. Let's take some time to review these rules.

Advertising Requirements

You will likely run ads to get more clients and grow your business. There are some basic guidelines you must follow when you place advertising:

  • The broker's firm name must be on the ad. The name used must match the name that is licensed with the state. You can use the managing broker's logo, but you must also include the registered name of the agency. You can place your information, such as your name, phone number, etc., but you must also put the name of the agency you work for.
  • The name of the managing broker's firm / licensed name must be the same size or larger than your name. The font and size can be different but cannot be smaller than what you are using for your name. If you bold your name, your managing broker's name must also be bolded.
  • You must use your registered name as it appears with the state. For instance, if your name is listed with the state as John Bryan, your ad must state 'John Bryan'. You cannot use something like 'John the Deal Maker' if John Bryan is not listed with your contact information.
  • Your contact information must be included. You must put your phone number or street address.
  • Your ad must be honest, direct and not mislead the viewer. Don't make claims that you cannot honor and make sure everything you say is true and straightforward.

Commissions

You want to make commissions, high commissions. That's one of the benefits of working as a real estate agent. But there are some rules regarding commissions you must follow.

  • Commission are negotiable between you and your client. Do not have a 'set' commission amount or collude with other agents to create a set commission amount.
  • The commission you will charge your client must be disclosed on the listing agreement. If there are additional fees or costs you both agree to, you must also get that in writing.

Disclosures and Contracts

Disclosures are common and highly recommended. They allow you to clarify any unusual circumstances or agency relationships that may exist. For instance, if you are representing the seller and the buyer, you must disclose this to both parties and get their consent in writing. This protects them from feeling you are not being honest or keeping their best interest in mind. It also protects you from a legal challenge later. If there are any reasons that would keep you from representing your client solely, you must disclose and get consent from the affected parties.

Think of how you would want to be treated as an agent, and ensure you treat your client with the same respect.

Your work as an agent will require many different contracts, including listing agreements, purchase agreements, and addendums. Authorized forms are already created and must be used, unless new forms or changes are prepared by an attorney. As part of your real estate training, you will get some experience with contracts. After you become an agent, you will need to work with your managing broker on a consistent basis to review contracts and ensure you understand how to fill out everything correctly and you don't miss any important paperwork.

Listings and Responsibilities

Some of your goals as an agent are to get listings from home sellers, work with buyers who want properties, and get recommendations for new clients. When you work with a client or get a new listing, it is your responsibility to provide all information to your clients, including all offers presented. You must protect your client and handle his or her property will professionalism.

To unlock this lesson you must be a Study.com Member.
Create your account

Register to view this lesson

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use Study.com

Become a Study.com member and start learning now.
Become a Member  Back
What teachers are saying about Study.com
Try it risk-free for 30 days

Earning College Credit

Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it risk-free for 30 days!
Create an account
Support