How to buy your first home in Michigan
Step by Step Process - How to Buy Your First Home in Michigan
The process of buying your first home can seem daunting- especially in this market! However, it doesn’t have to be! So don’t stress - It’s actually a very simple process and you’ll be one your way to homeownership in no time!
In this article, I am going to outline how to buy your first home step by step from the pre-approval process all the way to the closing table!
If we haven’t met before, my name is Briana Maratta and I’m realtor that specializes in helping first-time home buyers in Michigan
Step 1: Choosing a Real Estate Professional - You’re going to want to seek out a real estate professional who is an expert in your local market. A great real estate agent is going to be your confidant and will be able to help guide you to make the best decisions possible throughout this entire process while educating you!
Step 2: Get Pre-Approved for a Mortgage - You can’t buy a house without getting approved for Mortgage - unless you’re paying cash! You’re going to want to contact a mortgage lender to get you started, and not just any lender - a local one! In this market, it’s so important to work with a local lender who is reputable in the community so you can actually win a house in this market! They are going to be one of your best resources to one-up the competition. During this process, you are going to share with them pay stubs, bank statements, and any financial information they require to get you pre-approved for a mortgage.
Step 3: Buyer Consultation - So now that you’re pre-approved for a mortgage - we know exactly what you can afford. With a budget in mind, your real estate professional will want to know what you're seeking in a home. This is where you will want to create a list of what I call “Non- Negotiables.” With the help of your real estate agent you will formulate a list of exactly what you need in your first home.
So how many bedrooms, bathrooms, 1 story or 2 story, if you need a garage or basement, proximity to work, needing a dedicated office space to work from - things like that! Obviously your needs will have to be in-line with your budget and your agent will assist you in creating a realistic list based on what you can get in your approved price point.
Step 4: Home Shopping - Now that you have your non-negotiables established - you can start the fun part which is shopping! It’s important to stick to your non-negotiables because you don’t want to end up buying a home that doesn’t meet all of your needs. You’re spending a lot of money - and this is one purchase you don’t want to regret making!
Step 5: Inspections - Once you get your offer accepted and get a signed purchase agreement, you are entering your “due-diligence period.” This is a time period that is usually determined in your contract when you write your offer - typically they are about 7 days. During this time, you can do all of your due-diligence - having a professional home inspection, looking into what your new taxes will be, checking to see if the property has any special assessments from the city - maybe finding out if you have noisy neighbors - whatever the case may be this is your time period to conduct any kind of due diligence that you want!
Step 6: Appraisal - So after you had a successful home inspection and due diligence period and decide your moving forward with the house- your lender will usually order what’s called an “Appraisal”. An appraisal is an full-market assessment of what the home is worth in today’s market and lets the bank know exactly what the property is worth so that they can loan you the money at the agreed upon purchase price. This is usually a 1-2 week process as an appraiser has to personally go to the home to assess the value. If the appraisal comes back lower than the purchase price, your agent will have to renegotiate the contract price with the listing agent to try to secure a lower price. If the appraisal comes back higher than the agreed purchase price - congratulations you got a great deal and you own the home with equity on day one!
Step 7: Financing & Clear to Close -
This is the final stage of the process. Your lender will collect any final conditions that they need from you in order to approve you for the loan. They will go over your final numbers with you from monthly payment, taxes and escrows, homeowners insurance etc. Once they clear any remaining conditions on your loan your loan is submitted to the underwriters for final review so they can issue you what's called a “clear to close”. Once you get a “CTC” you can close on your new home! By law you’re able to have one “final-walk thru” of the home 48 hours prior to closing just to ensure the property is in the same condition that you saw it in initially.
Step 8: You’re a homeowner! - Once all the closing paperwork is signed by you and the seller, the title company will transfer the deed in your name and you’re officially the owner of your very first home!
Now that you know the process - it doesn't seem that scary right? Well if you think you’re ready to get started or have more questions about the process of buying your first home - please don’t hesitate to reach out!