Steps for Buying a House
Find out how the buying process works when purchasing a new home or piece of property in Northern Michigan.
Check Your Credit Score
The first step buyers should take before searching for new homes is to check their credit report. Unless you’re paying with cash, your credit score is important in determining whether you qualify for a loan.
Since mid-2022, credit has been tightening with heightened interest rates. This makes having a high credit score an important factor in qualifying for a mortgage loan.
Understand How Much You Can Afford
The next step in the home buying process is determining your budget. And there’s much more to affordability than just the purchase price of a home.
Buyers also should carefully consider the ongoing costs of property taxes, association dues, homeowners insurance, and maintenance costs.
If you’re financing your home purchase, using an online mortgage calculator helps estimate monthly payments quickly and easily.
Knowing the estimated cost of a loan will greatly help guide your search.
Find a Lender & Get Pre-Approved
While you’ll want to start with your own bank, it’s usually a good idea to get quotes from more than one lender.
Here in Northern Michigan, it also can pay off to work with one of our local lenders. They know our area the best, and that will come in handy when it comes to appraisals and underwriting.
Getting a mortgage pre-approval will tell you how much you’ll be able to borrow. Combining this with the amount of your cash downpayment will give you the upper range of what you can afford to buy.
Remember, the mortgage process can be slow. Getting a pre-approval helps get things moving forward more quickly.
Having a pre-approval letter also sends an important signal to sellers that you’re a qualified buyer. This helps your offer stand out and lets you move faster when it’s time to close.
Connect with a Local Agent
Get ready to make an offer or start looking for a new home, cottage or property in Harbor Springs.
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Start Working with an Agent
Signing up with an agent early helps you find and gain access to houses before other buyers. And when you put an agent to work, it helps you save time and money.
By representing your interests, your agent will be able to share insight into the current market and strategies to help make the home buying process easier.
Remember, talking with a local real estate professional early in the home buying process is a positive step forward. Even if you just have some initial questions, we’re happy to talk with you by phone, email or in person to get you the answers you need.
Search Neighborhoods and Houses
It’s true that the Internet helps make finding homes for sale easier than ever. But with Northern Michigan being so spread out, having an agent out in the field will give you an advantage to finding the best properties.
Try to narrow down the areas where you’d like to buy. But also take advantage of your agent’s local knowledge. A solid agent can find areas you may not have considered or even knew about.
Make an Offer
Once you’ve found the house or lot that you’ve been looking for, it’s time to put together an offer.
Always work closely with your agent to determine your offer strategy.
You’ll have to decide on a lot of items including:
- the price
- how much earnest money to put down
- the duration of your offer
- what contingencies to include
Your agent then will present your offer to the seller’s agent (or sometimes to the seller themselves).
Counteroffers & Negotiations
The sellers will likely respond to a reasonable offer by either accepting it outright or presenting a counteroffer. When a counteroffer comes back, it’s then time to negotiate.
A counteroffer may include a different price or some combination of various conditions requested by the seller. Lean heavily on your agent’s negotiation skills to get the fairest and best deal for you. Like your original offer, a counteroffer also will have its own deadline for your response.
Inspect the Home
After negotiations and signing a final purchase agreement, it’s time for your due diligence period.
In most cases you will hire a licensed home inspector. They will thoroughly evaluate the house and provide a detailed report of its condition.
If any (usually major) items need to be repaired or replaced, you’ll again negotiate the cost with the seller. Also, in the case of buying land, hiring a surveyor is common.
Complete Closing & Take Possession
After you are satisfied with your inspections and any repairs have been taken care of, it’s time to start the closing process.
Closing consists of numerous final steps to complete the purchase. Both you and the seller have responsibilities during closing. As the buyer, you’ll work with your agent, your lender, the title company and the closing agent to complete the transaction.
On the actual closing date, after all the documents have been signed and money has been transferred, you’ll get the keys and take possession of your new home. Congratulations!