Buyer's guide · 8 min read
Buying a home in Michigan, step by step
From your first budget number to the day you get the keys. Here's what happens, in order, and what to watch for at each step.
- 1
Set your budget and get pre-approved
Before you tour homes, talk to a lender. A pre-approval checks your income, debts, assets and credit, and tells you how much you can borrow. Sellers take your offer more seriously when it comes with one.
Think in monthly payments, not just price: principal and interest, property taxes, homeowners insurance, and mortgage insurance if your down payment is under 20%. Add HOA dues for a condo.
Michigan tip: Michigan property taxes reset when a home sells. The year after you buy, the taxable value "uncaps" and is based on the current market, so your bill can be noticeably higher than what the seller pays today. Ask your lender to estimate taxes on the purchase price, not the seller's current bill.
- 2
Pick your agent and sign a buyer agreement
A buyer's agent finds homes, sets up showings, runs the numbers on what homes actually sell for, writes your offer and negotiates for you. Since August 2024, you sign a written agreement with your agent before touring homes. It spells out what they'll do and how they're paid.
Ask how they're compensated, how long the agreement lasts and how to end it. Their pay is negotiable, and sellers sometimes agree to cover part or all of it.
- 3
Shop for homes
Make a short list of must-haves (bedrooms, school district, commute) and nice-to-haves. Tour in person, and look at the neighborhood at different times of day.
Your agent can pull recent sales of similar homes so you know what a fair price looks like before you fall in love with one.
- 4
Make an offer
Your agent writes a purchase agreement with your price, earnest money deposit (often 1% to 3%), financing type, inspection period, closing date and anything you want included, like appliances.
In Michigan the seller must give you a Seller Disclosure Statement covering known problems. Homes built before 1978 also come with a lead-based paint disclosure. Read both before your inspection.
Michigan tip: In a competitive market, a strong offer isn't only about price. A clean pre-approval, a flexible closing date and a reasonable inspection window all help.
- 5
Inspections and appraisal
Once your offer is accepted, schedule a home inspection right away. Inspection periods are often 7 to 10 days. Consider add-ons like radon (common in Michigan), sewer scope, well and septic for rural homes, and a pest inspection.
If the inspector finds problems, you can ask the seller to repair them, give a credit, lower the price, or you can walk away if the contract allows it. Your lender orders an appraisal to confirm the home is worth what you're paying.
- 6
Final loan approval
The lender's underwriter verifies everything. Send documents quickly, and don't open new credit cards, finance a car or change jobs before closing.
At least 3 business days before closing you'll get a Closing Disclosure with your final loan terms and cash to close. Compare it to your Loan Estimate and ask about anything that changed.
Michigan tip: Wire fraud is real. Always call your title company at a number you already know to confirm wiring instructions. Never trust instructions that arrive only by email.
- 7
Final walk-through and closing
Walk through the home a day or two before closing to confirm repairs were done and nothing has changed. In Michigan, closings are usually handled by a title company. You sign the loan papers, bring a cashier's check or wire, and get the keys.
After you move in, file a Principal Residence Exemption (Michigan Form 2368) with your city or township so you get the lower homestead tax rate. Filing by June 1 or November 1 makes it count for that year's summer or winter tax bill.
What buyers usually pay
| Down payment | 0% to 20% or more, depending on the loan (see our loan guide) |
|---|---|
| Earnest money | Often 1% to 3%, credited toward your down payment at closing |
| Inspections | A few hundred dollars and up, depending on add-ons |
| Closing costs | Lender fees, appraisal, lender's title insurance, recording fees, prepaid taxes and insurance |
| Moving and setup | Movers, utilities deposits, any immediate repairs |
This guide is general information, not legal, tax or financial advice. Rules and figures change; confirm details with your agent, lender, title company or attorney. Move Michigan · movemichigan.co