Service Provision Agreements in Michigan

Instructor: Tara Schofield

Tara has a PhD in Marketing & Management

Contracts and agreements are a big part of your work as a real estate agent. This lesson will go over what a service provision agreement outlines between you and the buyer, the seller, or a brokerage agency.

What is a Service Provision Agreement?

Your seller, Lacy, wants to get some work done on her home before listing it. She has a few small jobs inside the house, but there is also a larger job replacing the cracked and uneven driveway. Fixing the appearance of the home will help sell it.

Lacy asks you, her real estate agent, for some help, as she has never handled a large project like this. You make some recommendations and encourage her to get some bids from several concrete companies before deciding who to hire.

Lacy gets three bids. She chooses one company and gets a service provision agreement, a contract that outlines what the company will do and what price Lacy must pay for the repairs. A service provision agreement offers protection to both parties. The homeowner has a commitment of what the company will provide and what work will be done. The service provider has a promise of payment for the complete work.


Although not providing physical labor, real estate agents use service provision agreements too. In Michigan, every time a listing agreement is signed, a real estate agent is entering into a service provision agreement with their client. The document outlines many important responsibilities, including how you will represent your client, the fiduciary duties you will show to your customer, and how you will handle any money from them.

At the same time, your client has responsibilities outlined in the listing agreement, including giving you the access needed to market and sell the house and to pay you commission when the home closes.


A service provision agreement is also created when you sign a contract with a potential buyer who wants your help in buying a home. When you sign an agency agreement with a buyer, you are promising to represent the buyer, help them find a home and negotiate a purchase price. Your buyer also agrees to let you represent them and will do everything you request or need to have completed for the home purchase to be completed.

The service provision agreement helps you and your buyer know what to expect and what you each will be responsible for when finding and buying a home.

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