Buying a home is one of the most exciting milestones of your life. To prepare yourself for this moment, you need to know what to expect during the process. We have created this step-by-step first time buyer’s guide to help reduce the stress of buying a home and help you enjoy the journey as much as possible. To download a more detailed guide, click here.
Finding a buyer's agent is a crucial first step when looking to purchase a home. This is the person who will represent you throughout the entire home purchasing process. Their main responsibility is to ensure that you get the best deal and have a smooth home-buying experience.
When choosing a buyer's agent, it's important to find someone with the necessary skills, knowledge, and experience to represent your interests. A good buyer's agent will have a deep understanding of the local real estate market, be able to negotiate on your behalf, and provide you with sound advice and guidance throughout the home buying process.
Before selecting a buyer's agent, it's a good idea to interview a few different Realtors. Ask about their experience and track record. A successful buyer's agent will be able to provide you with a list of their recent transactions, which is a clear indicator of their expertise.
Don't hesitate to ask for references and follow up with them. This will help you to get a sense of what it's like to work with the agent and the kind of results you can expect.
Remember, finding the right agent can make a huge difference in your home buying experience. So, take your time and choose wisely.
Your pre-approval will affect the rest of your housing search, so it’s important to get one as soon as possible.
Not all mortgage lenders are equal. Rates may be fairly similar, but there are many other factors that can end up costing you more. Your choice of lender can even affect whether or not a seller accepts your offer. Finding a lender that is respected locally will help your chances of having your offer accepted.
If you are not sure whether you are in a good financial position to buy, we can put you in touch with professionals who will work with you to determine exactly what you need to do. Often, it is a matter of organizing your finances and debts differently over a period of time before purchasing a home. There are programs in Michigan to help first-time buyers with downpayment assistance and other needs. You may qualify for a special loan even when you think you can’t! That is another reason why a good local lender who is aware of programs in this area is important.
Now comes the fun part—looking at homes! But prepare yourself: at first, this can be a little bit disheartening. In the pictures you see online, sellers and their agents are trying to put each home in its best light. Once you visit a home you may be surprised at the actual appearance (or smell!) of the home you are touring.
Your Realtor should be able to help you do a rough assessment of the home’s condition—and help you understand the difference between superficial damage and more serious problems. All of these issues get explored in greater depth during the actual home inspection—but that comes later!
People often learn more about what is important to them during the shopping process. You may end up finding a house that is quite different from what you thought you wanted when you first started looking.
Nothing is better than individual showings with a knowledgeable Realtor. Never be afraid to ask questions, and remember that it is your Realtor’s job to show you many houses to help you discover what is really important to you. Knowledge is the key to making good decisions.
Although he now works exclusively as a Realtor, Dave is still a licensed builder with previous experience as a residential remodeler. (Michigan Residential Builders License #2101196465)
The negotiation process begins when it comes time to make an offer on a home. But negotiating for a home is not a matter of just trying for a lower price, like we do for other major possessions. When you buy a home, sellers are offering extremely different houses each unique and in a different location, for approximately the same price.
This is where it is helpful to know the market—not only to be able to make the best offer for a home, but also to explain to the seller why the offer is good and reasonable. A good negotiator will work to understand what the seller needs from the buyer besides money. Negotiating the sale of a home is more complicated than just arguing over money: it is about understanding what is most important to you and what is most important to the seller—and finding a way toget the two of you together.
When you make an offer, you will submit a signed Purchase Agreement to the seller’s agent: the price you are willing to pay, terms of the sale (what is included, contingencies, dates), a deposit (or “earnest money”) and your pre-approval for a mortgage. Sometimes, sellers may be receiving and reviewing multiple offers at once, and you only have one opportunity to take your best shot.
The Purchase Agreement normally includes an inspection period which gives you time for your home inspector to point out potential problems. If issues arise during the inspection period, you can re-negotiate your offer or decide not to go through with the sale.
Dave is not only a “Certified Real Estate Negotiator,” he is also one of the few Master Certified Negotiation Experts in Michigan.
You have already made good strides by being pre-approved by a good, reputable lender, Still, you may be surprised by some of the requests made by the bank’s underwriter. Your realtor can help you navigate this process and explain why the bank is asking for seemingly ridiculous information. During this time period, a Realtor can also help you understand what new expenses could create red flags or interrupt the process. To put it simply: save any major credit purchases like vacations, major purchases or even furniture for your new home until after closing. This includes buying or leasing cars.
There will usually be an appraisal on the property after you apply for your loan. The bank will send an independent appraiser out to the property to make sure that the price you are willing to pay is not more than the the bank’s assessment of its market value. The appraiser’s opinion counts for a lot. If you and the seller both agree on the price—for example, $300,000—and the bank’s appraiser says the property is worth only $280,000, there is a problem. Unless you have another $20,000 to add to the downpayment or the seller lowers the price, you are not going to be able to purchase the home. This is another negotiation situation between you and the seller.
After you’ve applied for the loan, it is time to schedule an inspection. Even though Dave has built and remodeled houses, it is very important for our clients to have an independent, trustworthy home inspector give them a detailed assessment of the house. You need to know what is good, what needs repairs, and what could be a deal-killer. The inspection process gives you the opportunity to back out of the contract if major unexpected problems are found—or to renegotiate with the seller.
There is no licensing process or requirement for home inspectors in the state of Michigan, so it is important to choose an inspector who is qualified. Some inspectors have a reputation for repeatedly exaggerating problems and cost of repairs, which can cause a buyer to decide against buying the home—and to hire the same inspector for their next potential home!
Others have a reputation as a “rubber stamp” that approve almost everything. Good inspectors will show you everything they find and can explain the significance of each item. They can also give advice on caring for your new home.
For the most part, people buy used homes, so there is always going to be some issues. It is important to gain a realistic picture of how serious that problem is from a qualified expert.
Even with new builds, it is wise to get an independent inspection.
Closing on a home involves banks, governments, lawyers, title companies, agents, buyers, sellers and a lot of coordinating among them all.
You don’t want to wander alone through this process! A good Realtor will help you understand every step of the way, make sure everyone is getting everything done on time, and even make sure the underwriters are getting the things they need to underwrite the loan.
Sometimes, the sellers may need a little more time to move out of their home, and will arrange to rent back from the buyer after closing. For example, if you close on a Thursday, and they hadn’t scheduled movers until the following Monday, they may want time to get the house all cleaned up for you. This can help you as the buyer, too—because it allows you to spend money after closing to hire movers, purchase furniture, and other things needed to help you settle in.
After closing, your Realtor will still be available to help you get settled and can give you recommendations about things that you might need or want. Your Realtor is also somebody you can always call with questions, and can tell you, for example, whether an email or letter about the house is a scam.
We try to make the process as painless as we can. Depending on the situation you’re moving from and what is driving you to move, if can be a great time or a difficult time—but a good Realtor will make it as smooth as possible.
After leaving the closing table, you are now the owner of your new home!
The process of buying a home can be emotional, time-consuming and stressful. Since we are both licensed Realtors, we offer twice the support of a single agent. Whatever the reasons for your move, we know this a very important event for you and we look forward to helping you successfully negotiate the change. Contact us!
