What Legal Contracts Are Used When Buying Michigan Real Estate?

When you buy real estate, you need a contract. Chances are, there will be much more than one form involved in your real estate transactions. If you’re considering a career in Michigan real estate, here are some of the basic contract documents you will likely encounter. It’s a good idea to familiarize yourself with them in your pre-licensing courses. Even outside of class, you might consider reviewing them several times before you begin placing offers for clients.

Purchase and Sale Agreement

In Michigan, a Purchase and Sale Agreement communicates how the buyer will purchase the property. Sometimes referred to as the “offer sheet,” the form is the primary piece in the transaction package. Here is some of the information it will include:

  • Purchase price

  • How you will pay (cash, loan, other)

  • Earnest money handling

  • Closing date

  • Other contract terms like tax prorate terms, miscellaneous items left on the property, terms of the due diligence period, etc.


Michigan real estate transactions also require certain disclosures. Before everyone signs the purchase and sale agreement, the seller must issue a Seller’s Property Disclosure Form to the buyer’s agent. This form offers a detailed description of property systems and appliances. It gives the opportunity for the seller to reveal any known defects or repairs needed. It will include a lot of information. Some systems covered include:

  • Electrical

  • HVAC

  • Plumbing

  • Kitchen appliances

  • Bathroom fixtures and appliances

  • Water heater

  • Interior and exterior structural components

If the home was built before 1978, you will also need a Lead-Based Paint Disclosure Form. This document indicates the seller’s knowledge of whether lead-based paint was used in the home. It also explains the potential health effects of lead exposure. If there is a concern about lead-based paint in the home, it’s a good idea for the buyer to have an inspection specifically looking for lead-based paint.


As you go through the transaction process, contract terms could shift. You may advise your client to have a home inspection. This could reveal some repairs both parties were not aware of. If a loan is being issued for payment, an appraisal is required, too. If the appraisal price is lower than the initially agreed-upon price, this could pose funding problems. You may need to renegotiate the price or other terms of the deal.

These are common issues during a Michigan real estate transaction. Cool heads often prevail, but if purchase terms change, you will need to use an addendum to indicate the changes. In fact, some deals may even have multiple addendums. The Michigan Association of Realtors uses a fairly generic addendum form that allows an agent to specifically explain any changes to a contract. You don’t have to use this form. There are others available online as well.

Many Details to Remember

Don’t let these forms intimidate you. Just like anything else, the more transactions you experience, the more comfortable you will be with all of the paperwork. Once a deal is complete, you will issue your client a thick folder full of documents. Everything from inspection reports, contract documents, explanations of HOA community rules (if applicable), and a number of other documents will be involved.

It’s important to have a good broker mentor you early on. It will feel like a lot of details are being overlooked at first. But your broker can help guide you through successful transactions and make sure all your contract documents are in order.

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