A home is one of the most exciting purchases a person will make in their life.
With that excitement, though, also comes a lot of trepidation and concern. After all, buying a home is often the most expensive purchase a person will make.
Even if you have owned a home in the past, buying a home can be a scary endeavor. There are a lot of things you must weigh as you decide which home would be the best for you and your family. It, unfortunately, isn’t as simple as viewing a home for sale online and clicking “purchase.”
Here are five things you should consider before you buy a house in Michigan.
1. Who’s Going to Guide You Through the Process?
The internet makes searching for homes for sale extremely easy. It’s also easier than ever to research other aspects of neighborhoods such as crime and the quality of schools.
Because of this, you might think of buying a house on your own, without anyone’s help. But, there’s still a lot of value a good real estate agent can provide you.
Keep in mind that, as a buyer, you will not be responsible for paying your real estate agent. In most cases, the buyer’s agent gets their commission when they are part of a deal that closes.
The 6% total commission is split between the buyer’s and seller’s real estate agents. And that money comes out of the seller’s proceeds from the sale.
A good real estate agent will help you get appointments to walk through homes you like. They will provide insight into the homes that might not be included on an MLS listing. They’ll be able to give you opinions on neighborhoods or on parts of the home that you may not notice.
Just make sure you pick an experienced real estate agent who’s familiar with the area in which you’re searching for a home.
2. How Are You Going to Pay for It?
Most people will finance the cost of their home through a mortgage. This loan will allow you to pay off your home’s total sales price over as many as 30 years — as opposed to paying cash for it at closing.
You’ll have a lot of choices in mortgage types. Each type has pros and cons. They also have rules that dictate what you need to qualify, and whether the home you’re looking to purchase would qualify.
Settling on the right mortgage is almost as important as finding the right home to buy. Work with a mortgage broker that can educate you on all the loan products their company offers. Have them walk you through the different options, and present the pros and cons of each.
If you don’t have a mortgage broker, your real estate agent can probably refer you to one with a lot of experience.
Once you’ve found a broker and settled on a mortgage type, make sure to get a pre-approval. Having this in hand before searching for homes will make the home-buying process a lot easier and quicker.
3. What Other Costs Do You Have to Factor?
When you’re building your housing budget, there are more items to consider in addition to your mortgage principal and interest. You’ll also need to factor in property taxes, utilities such as electric and gas, and insurance.
In addition, you may have to pay a Homeowners Association fee. If your home is located in a neighborhood that has an HOA, you’ll likely pay an ongoing fee that will cover items such as trash collection and general upkeep of the neighborhood. It may also include a neighborhood pool or other amenities.
Finally, consider how much money you’ll have to pay at closing. How much of a down payment you’ll be required to make will depend on your mortgage type. What you’ll have to pay in closing costs will also be determined in part by your mortgage and in part by negotiations with the seller.
4. Make Sure the Home Checks Out
After a seller accepts your offer, but before you close on the home, make sure to get the home fully checked out. You should have a full home inspection conducted by a reputable inspector.
The inspector will be looking for things such as structural integrity and other potential issues. You should also have specialty inspections for pests such as termites and other destructive insects. If your home is on a well water and/or septic system, you’ll want a specialist to inspect them as well.
Sometimes, these inspections can uncover major issues that could make what looks like your dream home a nightmare in the end.
5. Is Your Home Protected?
Finally, make sure that you protect your home before you purchase it. The most important part of doing this is obtaining home insurance that covers your home, your property and your possessions in case of an emergency.
Your mortgage company may dictate what home insurance coverage you need to get, but research the details and options for those coverages with an insurance agent. Your agent can also let you know if state law would require you to get additional coverages such as flood insurance.
Work with a Trusted Agent at Signature Insurance
Having a trusted insurance partner when you’re buying a home is just as important as having a trusted real estate agent and mortgage broker. Experienced insurance agents can walk you through all your options for home insurance, helping you wade through what can sometimes be a complicated process.
The agents at Signature Insurance have years of experience working with all types of homeowners in Michigan. We can guide you through all your options for home insurance. We help you understand everything available to you, everything you’ll be required to obtain, and how to do so in the most cost-effective way possible.
Contact us today for a free home insurance quote. Signature Insurance can help you get peace of mind as you purchase your dream home.