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Home Buying Guide

10 Steps to Buying...

Steve's "10 Steps to Buying" is a basic outline of the steps that you will take from your initial home search right through to the closing. Keep in mind that this is just a basic overview and there are many variables that can change how the process will work.

Buying a home can be a very complex process and being one of the biggest (if not the biggest) investments you'll ever make be sure to protect your interests and investment by working with a professional, experienced, full-time Realtor® like Steve Hatfield. His assistance, guidance and professional advice will prove to be invaluable to you.

So, when you are ready to buy a home in southeast Michigan communities of Dearborn, Dearborn Heights, Livonia, Canton, Westland, Garden City, Plymouth, Redford, Farmington Hills, Novi, Allen Park, Taylor, Southgate, etc., be sure to contact Steve Hatfield for a FREE, no obligation home buyer consultation.

1 Find the BEST agent to represent you
2 Working with your agent
3 Determine your price range
4 Finding the perfect home
5 Making an offer to purchase
6 The home inspection
7 Your mortgage application
8 Necessities of your transaction
9 Just before closing
10 Your closing day has arrived!
Find the BEST agent to represent you
Selecting a qualified agent that you feel comfortable working with is a very important 1st step to finding your dream home. The agent you select to work with throughout your home buying process is going to be your guide and advisor. You will most likely spend a great deal of time working with your agent and will also depend on them for their professional advice. Therefore it is important to make your selection carefully.

Some important considerations in selecting your agent are:
  1. Does the agent work full-time selling real estate? (only work with a full-time agent).

  2. How long has the agent been actively selling real estate full time? Michigan law only requires a 40 hour class to get a real estate license. Make sure your agent is a seasoned professional!

  3. While it is important that an agent sells a reasonable amount of real estate each year, don't be too quick to work with an agent simply because they always claim to be "#1" or sell 10's of millions of dollars of real estate each year. While some may be good agents, others may be so busy that you will become just another number to them and ultimately you may not receive the service you deserve.

  4. Does the agent possess an ABR (Accredited Buyer Representative) and/or a CRS (Certified Residential Specialist) designation? Working with an agent who holds an ABR or CRS (like Steve Hatfield) is always in your best interest.

  5. Is the agent knowledgeable about the area and communities you are looking to purchase in?

  6. Does the agent have a system in place to keep you updated on a daily and/or regular basis as new home listings become available?

  7. You deserve to receive service that is prompt in regards to showing you homes, answering questions, etc. In order to meet these needs does the agent have a partner or licensed assistant that can help you with whatever you need in the event that the primary agent is unavailable?

  8. Do you like to communicate via email? While more and more agents are getting email addresses, many of them do not take the time to check their email on a regular basis. If email is a method of communication you like to use, ask the agent how many times a day they check their email.

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Working with your agent
  1. Your agent should belong to the local multiple listing service and be able to make available to you, all the homes that are for sale in your price range - regardless of which company or agent has the property listed. This not only means that they will have the ability to tell you about homes listed with other real estate companies or agents, but can also show and sell them to you.

  2. If you see a home that is on the market or advertised in the paper, etc. and it is listed with another company or is one that your agent has not told you about, take down the company name and telephone number along with the address of the property. Then contact your agent and have them get all the information for you. If your agent is looking for new listings for you on a regular basis but did not provide information about the home you found, chances are that the home you saw is either sold or out of your price range.

  3. For sale by owners - Never call a for sale by owner yourself. If you are working with a buyer's agent they are the ones that are looking out for your best interest. Take down the address and phone number and call your agent. They can get all the details of the home for you. In many cases they may still be able to represent you but you must allow your agent to investigate the property and options first.

  4. New construction homes - Never investigate or view new construction homes yourself. In most cases, if you even speak to the builder yourself (without your agent being present) they will not allow you to be represented by your agent if you decide to purchase one of their properties. So, if you drive by any new homes being constructed, simply take down the builder name and phone number and call your agent to have them make all the inquiries.

  5. If at all possible, you should try to drive by the homes provided to you by your agent - especially the first list of homes that they give you. Some homes may sound terrific on paper but when you drive by you may find that many of them are not attractive to you at all. If a "hot" home hits the market and your agent feels that time is of the essence and it is better to simply set a showing appointment without your driving by, you should trust their judgment and do so.

  6. Make arrangements with your agent as to how you should receive new home listings. The home listing inventory is constantly changing with homes being sold and new listings becoming available. Your agent should be checking for the availability of new home listings on a regular basis. Make arrangements with your agent so that they may easily tell you about these new home listings by fax, phone, email, etc. Remember, other buyers are out there too and you don't want to miss a home that might have been "the perfect one!"

  7. Be ready to be flexible with your schedule for the purpose of looking at homes. It's worth missing that movie or bowling night to look at a home that sounds of interest, tomorrow can sometimes be too late so you don't want to wait!

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Determine your price range
Before you begin house hunting it is very important to first determine the price range in which you will be looking. You should contact a mortgage lender or local bank that can meet with you to evaluate your financial situation and determine the ideal price range for you along with providing a detailed outline of the costs involved in your home purchase. At this time the lender will also be able to discuss and advise you as to what mortgage programs are available for you to choose from (i.e.; Conventional, FHA, fixed rate, adjustable rate, etc.).

During this time period, it is an excellent idea to get "pre-approved" for a mortgage. This is different than a pre-qualification. With a pre-approval, the bank or mortgage company actually does a credit check and sends out verifications to obtain a mortgage pre-approval just as they would do if you had already found a home. Since you will have to follow through with the approval process at some point, getting it out of the way in the beginning will save you time, stress and ultimately, it will have its advantages. For example, when you make an offer on a home, your offer will carry more weight with the seller and listing agent because you are able to show them that you are "credit worthy" and there is not the risk of you being denied for the loan. There are also other advantages in obtaining a pre-approved mortgage status which may end up working in your favor.

If you don't know where to go to obtain a mortgage or have questions about the process and benefits of a pre-approved mortgage, be sure to ask your real estate agent. If they are an experienced agent, then they should be able to direct you to one or more reputable lenders that can assist you.

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Finding the perfect home
At this point you should have already spoken with a lender and at the very least gotten pre-qualified for a mortgage or if you are really prepared, you have already started your pre-approval process. So the next step is to begin looking for your dream home!

You will want to meet with your agent to discuss your home purchase price range and obtain home listings that are in the areas you have designated. Communication with your agent is very important so don't be shy about expressing your home preferences. Expressing your home specifications in detail will help your agent to more effectively and efficiently find what you are looking for. Remember though, while your ultimate dream home might be that brand new house with a Jacuzzi tub, 3 car garage and large lot, your budget may demand a bit less in a house. Your agent should only present home listings to you in the price range you have designated so you may or may not be able to find some of the extras that you would really like to have.

Another thing to remember is that you should be loyal to your agent. Your agent will be putting a great deal of time and effort into your home search and purchase process. Real estate agents work on commission and if they feel that you are working with other agents or may buy a home that is being sold by owner, they may not take the time to tell you about that great new listing that just came up and might have been "the perfect home" for you. On the other hand, if the agent knows you are loyal to them, they will be more likely to put forth their greatest effort into your home buying process. Purchasing a home is a large investment so having a real estate agent that is truly putting forth the effort required and being on your side is critical to reaching your ultimate goal. Definitely a win-win situation for all!

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Making an offer to purchase
Once you have found a home you would like to purchase you will need to write an offer to purchase. This is where the assistance of your Buyer's Agent will be invaluable to you.

The first step will be to go to your agent's office to review and sign the necessary purchase documents, disclosures and addendum/amendments (In some states / areas this procedure may vary so consult your agent). Make sure to bring your checkbook so that you will be able to provide your agent with an earnest money deposit - sometimes called a "good faith deposit."

Deposit amounts / procedures vary from area to area so it is best to consult with your Realtor® regarding the amount of your earnest money deposit. Remember that by putting up this deposit you are showing the seller and listing agent that you are serious about your offer and purchase. Your earnest money deposit will be credited towards your total costs at closing unless you default on the contract in which case you may jeopardize the disposition of these funds. Again these procedures may vary and different situations may demand different outcomes to the scenario described above.

If you are purchasing a property in Michigan, the law allows the agent to prepare all the paperwork necessary for your offer to purchase. At this time the agent should review the paperwork with you and you should make sure that you are satisfied with the terms, conditions, and price being offered. After you have review your offer to purchase (and related documents) you will need to sign them in order to make the offer valid.

If you have not already done so, make sure that your agent has a certificate or other written documentation from your lender/bank outlining your credit worthiness and ability to purchase along with a contact person's name and phone number. The agent will need to provide this information along with your offer to the listing agent and possibly to the seller.

The next step is for your agent to contact the listing agent of the property to make arrangements for the presentation of your offer to purchase. There are many variables that may affect how the presentation is made and your agent will be able to inform you of how it will be taken care of.

After the presentation of your offer, the seller may elect to either reject your offer, make a counteroffer or accept your offer. Again, due to the many variables which may come into play, your agent will able to instruct and advise you through this process.

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The home inspection
When you find the home that you would like to purchase, you will most likely want to include a contingency in your offer to purchase outlining the details of your option to have a private home inspection.

When you make arrangements for a private inspection you will want to hire a professional, bonded private inspection company. The cost of the inspection is paid by the buyer and generally will run between $300 - $500 depending on the size and features of the home.

The benefits of a private home inspection are two-fold:
  1. You will learn all about the home you are buying - how it works, any upcoming maintenance that may be needed to be done (caulking, painting, etc.). This information can be invaluable in keeping the home free from potential problems that could develop at a later date.

  2. If the home has any "major" flaws or problems the clause in your offer to purchase should allow you to renegotiate with the seller or withdraw your offer without penalty.
Remember that there are no "perfect" houses out there. Each home will have its own list of maintenance items such as caulking, painting, etc. that will most likely need to be done. The purpose for your private home inspection is to avoid buying a home which would require you to invest a large sum of money from the onset to correct major defect(s) and/or flaw(s) with the home.

Tip: For more information on the Home Inspection process be sure to check out the Home Inspection Guide on this web site.

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Your mortgage application
If you have not already formally applied for your mortgage, you will need to do so within the time frame outlined on your offer to purchase. The lender may collect fees from you at this time that may include a credit report, appraisal and/or processing fee. These fees are generally called your "up front" fees.

If you had previously made application for your mortgage before you found your dream home you will most likely still need to meet with your lender at this time to formalize the details of your mortgage application. Again, the lender may wish to collect certain "up front" fees at this time.

Also at this time, you will need to make some decisions about certain items. One of these items may be whether you wish to pay points (1 point usually equals 1% of the mortgage amount and can be used to buy down your interest rate). Another item will be whether you wish to "float" or "lock" your interest rate. This means that you may opt to wait to lock in your interest rate (float) or lock it in at the current interest rate. Each situation is different and your lender will advise you as to the options that will need to be decided upon.

Here are some of the items your lender may need at time of application. Again these may vary so you should consult with your lender and inquire as to their requirements.
  1. Social Security cards & drivers licenses

  2. Residence addresses for the past 2 - 5 years

  3. Your landlord's name and address

  4. Names and addresses of each employer (past 2 - 5 years)

  5. Your most recent pay stubs

  6. Two years signed tax returns & W2's

  7. Names, addresses, account numbers, and balances of all checking, savings, credit cards, and installment loans

  8. Two most recent bank statements on all accounts

  9. Information on any stocks or bonds you own

  10. Details of all real estate owned

  11. Copy of fully executed purchase agreement and addendums, copy of your earnest money deposit check and the MLS listing sheet for the home you are purchasing

  12. Divorce decree & child support agreements (if applicable)

  13. Check for mortgage application fee and credit report (check with your lender as to what fees you will need to pay for in advance)

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Necessities of your transaction
There are several other things that may need to be done before your lender gives final approval to your mortgage:

Title Search - The tile of a house shows who currently has liens on the house/property. It should be stated in the purchase agreement that the seller will provide you with clear title (title without any liens against it).

Mortgage Title Insurance - Your lender will require this for their own protection. This is an insurance policy that covers the lender in case of any unknown problems with the title even though the title company stated it was clear.

Owner's Title Insurance - This coverage is generally provided by the seller and covers the buyer in the event that the title has been found not to be clear of liens after the closing of your transaction.

Private Mortgage Insurance - This is something that most lenders usually require if your down payment is generally less than 20% of the purchase price. It is a protection for the lender in case you default on the loan.

Homeowner's Insurance - Also referred to as hazard insurance, this is an insurance policy that covers the cost of repairing or rebuilding your home in the event of a natural disaster. Your homeowners policy will also cover you in the event you suffer a loss due to theft. This is something that you will shop around for on your own and make decisions of the degree of coverage and deductible you wish to carry.

Some of the items above are taken care of by your Realtor® and/or mortgage lender.

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Just before closing
When your mortgage is approved, your lender will send you a letter of commitment. If all other items have been completed (i.e.; title search, any required/necessary repairs, inspections, etc.), unless the provisions of your offer to purchase state otherwise, you should be ready to close. If a closing date hasn't already been specified, the listing agent will confirm a closing date and time with the lender, title company, and your agent.

Once a closing date and time has been set, if you had previously made an arrangement in your purchase documents to have a walk-through inspection of the property, now is the time to schedule it. Again, unless previous arrangements have been made, your walk-though inspection should generally be scheduled for the day before or the day of closing.

If you are taking possession of the home at closing, the seller should make arrangements to have the various utility services taken out of their name and the buyer should make arrangements to have utility services put into their name(s). Your agent will advise you as to the best way to coordinate this with the seller.

If you have not already done so, you should also finalize your arrangements for homeowners (hazard) insurance and make arrangements with your insurance agent to pay for and obatin a copy of your policy and paid receipt showing that the policy has been paid for. Lenders will require that you provide a paid receipt showing that the first year of your homeowners insurance policy has been paid in full before or at closing.

Anywhere from 1-3 days prior to closing you should obtain your final closing figures / expenses from your lender and /or real estate agent. Many lenders and title/escrow companies will require that you bring a certified or cashiers check for the total amount due at closing. Your real estate agent should be able to advise you regarding this matter. Also, it is a good idea to bring your checkbook to closing just in case any small changes are made at the last minute.

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Your closing day has arrived!
Make sure to bring the necessary funds for your closing, photo identification (i.e.; drivers license), your homeowners insurance and paid receipt, along with any other documents/items requested by your lender and/or real estate agent.

After signing numerous documents and taking care of final payments, you will become the proud owner of your own home!

The goal of a truly qualified, professional real estate agent is to guide you through each step of your home buying process so as to make your transaction a memorable and rewarding experience. For this reason and many others, it is is very important that you select the agent you work with very carefully!

For professional assistance with your home purchase in the Metro Detroit Michigan communities of Dearborn, Dearborn Heights, Livonia, Canton, Plymouth, Garden City, Westland, Redford, Farmington Hills, Novi and many downriver communities including Allen Park and Taylor, be sure to contact Steve Hatfield. You'll be amazed at the level of service you'll receive and the professional advice that you will benefit from!

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NOTE: The information contained in this section is a basic, general outline of the home buying process. There may be other factors involved and/or additional steps required to complete your transaction. All dollar figures are estimates and may vary.

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  Steve Hatfield
REALTOR® ABR, CRS, e-PRO Certified
CENTURY 21 Curran & Christie
25636 Ford Road
Dearborn Heights, MI 48127
Office: (313) 274-7200
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Licensed Realtor® Since 1987 (#6501221773)
realtor Accredited Buyer Representative Certified Residential Specialist e-PRO

Steve Hatfield, Realtor® provides professional real estate / home buying services to buyers and sellers in Dearborn Michigan, Dearborn Heights Michigan, the Wayne County MI (Southeast Michigan) communities of Livonia, Canton, Redford, Westland, Garden City, Plymouth, Northville and the Oakland County cities of Farmington / Farmington Hills and Novi Michigan.

Equal Housing OpportunityIn accordance with the law, the properties, real estate services and homes for sale featured on this web site are offered without respect to race, religion, color, creed, national origin, sex, physical limitations / disabilities or familiar status.

REALTOR® is a registered collective membership trademark that identifies a real estate agent / professional who is a member of the NATIONAL ASSOCIATION OF REALTORS® and subscribes to its strict code of ethics.

Century 21 Real Estate Corporation © and sm trademark and servicemark of Century 21 Real Estate Corporation. Equal Housing Opportunity. Each office Independently Owned and Operated.

Copyright © 1996 - Steve Hatfield
Graphics and content may not be reproduced or copied in any way with out written permission from Steve Hatfield.