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Five Steps to Home Ownership in Northeast Michigan | Step 1: Get a Lender The first step in buying a home is getting prequalified with a reputable lender. When buying a home in Northeast Michigan it's almost impossible to get a contract signed without a preapproval letter. Finding a lender is easy, there are plenty of them out there. Interview more than one. Important to note, however, that a reputable, local lender doing business in Michigan is a selling point in this competitive Michigan real estate market. A mortgage lender who is known in the Michigan real estate community and has a reputation for closing deals on time is a feather in your cap when making the offer. Getting prequalified is not the same as getting preapproved. Prequalifying is simply an estimate of how much you can borrow. Preapproval comes later, when you actually make application for the loan. Prequalifying does two very important things for you: 1) it helps you determine your price-range; and 2) it allows you to resolve any financial or credit issues, so that you can get the best rate possible. Prequalifying often can be done over the phone. | | Step 2: Find a Home Shopping: This is the fun part of every home hunt. Everybody loves shopping for home, you've probably already done some on line searching yourself. Communicate. The key to getting what you want, even during your search, so having a Real Estate Agent with whom you are comfortable is very important.
Collaborate. When finding the right home is something you do with your Real Estate Agent it makes the search a lot more fun. | | Step 3: Make an Offer Now that you found the perfect Northeast Michigan home, it's time to write up the Purchase agreement. In addition to the purchase price, the Purchase Agreement will also define the terms under which you will purchase, and timing of the sale (i.e., offer expiration, closing date and date of possession).
Remember, the seller can accept or reject any offer, or counter your original offer. A period of negotiation after the original offer is presented is not unusual. With an agents assistance, you and the seller can agree to all the terms of the Purchase Agreement and come to Mutual Acceptance. Your offer will be presented personally on your behalf whenever possible, and accompanied by a prequalification letter from your lender along with an Earnest Money check. A word about Earnest Money - Earnest Money is an amount of your choosing that will be deposited into an escrow or trust account during the period of the transaction. It is a show of good faith on your part that you are "earnest" about seeing the sale through. The earnest monies are applied towards the purchase of the home at closing.
Pricing & Multiple Offer Strategies
You ultimately determine the purchase price. However, an agent can help by giving you useful information about current market conditions, and by giving you a comparative market analysis of similar, active and recently sold homes in the area. You can also rely on your agent to help you through the counter offer and contingency periods. | | Step 4: Inspection and Review Your offer may be contingent upon an inspection. We always recommend a home inspection, you may choose to waive this contingency. I highly recommend you consult your Real Estate Agent first, however.
Inspections are typically done within a week of mutual acceptance, paid for by the buyer and conducted by a professional, licensed home inspector. You should be present during the inspection. If the inspection goes well and no major problems are found, you'll be ready to close. If a problem does get discovered during the inspection, you will have other options your agent will explain to you. A Few Items On An Inspector's Checklist: - heating system
- electrical outlets and wiring
- plumbing
- condition of the roof
- condition of the foundation
- chimney
- drainage system | - siding
- attic
- proper ventilation
- insulation
- turn on all appliances
- inspect for mold
- inspect for pests |
The inspection is really your opportunity to learn about the home you are purchasing. Your inspector will walk you through the home and tell you how everything works and give you advice on proper maintenance.
Appraisal Your lending institution will require that property you purchase appraises for the purchase price. Your lending institution will send an appraiser out during the contract period and the results of the appraisal will be shared with you. You do not need to be present during the appraisal. The appraiser will consider the square footage, year, condition and location of the home when evaluating the home's value. | Step 5: Closing Closing is the final stage of buying a house. It is when all monies are cleared and distributed to the appropriate parties by the escrow company. Several days before the closing, you will be contacted by your agent to go over the closing statement. This shows where all monies have been distributed and a final balance to be brought to the closing if needed. This amount must be a cash or cashiers check. Your earnest money check will go toward that balance and closing costs.
Closing costs associated with a home purchase include: - Loan fee or origination fee
- Points purchased to reduce the monthly mortgage payments
- Escrow fee
- Other incidental administrative fees
The signing of paperwork is done the day of the closing date. All parties to the transaction must sign the paperwork. If any party is unable to attend, he or she can grant power of attorney to a representative or pre signed by mail. On the date of closing, the funds are distributed and the deed is recorded in your name.
Congratulations, you are now a the owner of your new home! | | | | | | | | | |
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