The process for buying homes in Michigan is not to different than anywhere, but we want to lay it out for you prospective home buyers so you have a simple, quick guide to light the way to your dream home.
The Overall Process for Buying Homes in Michigan
- Find an Agent that will represent you and dedicate themselves to your wants and needs.
- Find your budget.
- Search for homes online, attend open houses
- Make an offer on a home you are interested in
- The offer is accepted by the seller and a contract is signed
- A deposit is paid from the buyer to the buyer’s attorney, broker or escrow agent (never directly to the seller)
- The signed contract is sent to an attorney or title company to begin the title search an all other work to transfer the title from seller to buyer. In Michigan, most sellers have to provide a “clear title” and/or secure title insurance within 7 days giving the buyer ample time to pull out of the contract if there is anything wrong with the title.
- In Michigan, a seller’s disclosures statement is required by law to be added as an addendum to the contract and must be signed within 72 hours of receipt by both the buyer and seller. The buyer reviews and signs off on any disclosures which can include any known flaws, intended repairs or potential environmental hazards.
- If agreed upon in the contract, the buyer will perform any inspections of the home by the inspections contingency date within the contract.
- Depending on the inspections outcome, the buyer can decide to walk away or ask for closing cost credits. The seller then can decide to agree to all the buyers requests, counter offer with another solution, or decline to make amends.
- A final cash amount is calculated and brought to the closing table in form of a cashier’s check.
- A final walk-through will be performed up to the day before closing to ensure that the condition of the home is the same as when the process began.
- The buyer and seller sign all closing documents which can include loan documents and HUD-1.
- The buyer pays any remainder downpayment to the attorney or title company.
- The title company representative will record the transaction and deed with the appropriate municipality.
- The buyer takes the keys and is the legal owner of the property!
The Mortgage Process
- A buyers submits a loan application to their lender.
- The lender will send the buyer a “Good Faith Estimate” within 3 days to show a breakdown of estimated closing costs (which is bound to change).
- The buyer will send a series of personal financial disclosures to their lender before a buyer can write an offer. Documents can include:
- Many months of statements for any bank accounts they hold
- Many months of statements for any outstanding loans, credit cards, and rent history
- Tax returns
- Pay stubs
- Explanation of any credit inquiries
- Any disclosures that may have an influence on their financial status such as marriage license, divorce settlements, child support, bankruptcies, etc.
- The lender makes a decision on their loan amount and issues a loan commitment letter.
- Appraisals are ordered but requesting a specific appraiser is not possible, however an appraiser can be rejected.
- The loan contingency is removed by the buyer before the loan contingency date by sending in their loan commitment or approval.
- Homeowner’s insurance is purchased and submitted to the lender.
Special Notes About Buying Homes in Michigan
- Michigan’s home buying process is similar to other states where a real estate attorney (or title company) is used to complete the transaction and prepare all the closing documents
- The buyer and seller often complete the exchange at the same closing table in Michigan. In some cases, an escrow agent may be used to complete the exchange, in which case the buyer and seller do not need to complete their parts at the same time.
- Since it takes some time to gather documentation and approval for many of these processes, it is wise not to change employment or credit until the home buying process is complete in order to avoid having to re-submit documents and paperwork and prolonging the process.
Tony Can Help You With the Process for Buying Homes in Michigan
Contact Tony Raffin today to get started with the home selling process or to have any questions answered.