How to Buy a House in Michigan: Step by Step

I break it into a clear sequence so nothing catches you off guard. First, get your financing in order and ideally get fully underwritten, not just pre-qualified. Second, choose an agent and sign a written buyer-agency agreement, which is now required before touring. Third, set a realistic budget around a comfortable monthly payment. Fourth, house hunt with a focused search. Fifth, write a competitive offer with the right earnest money and contingencies. Sixth, complete your inspection. Seventh, the lender orders the appraisal. Eighth, you reach final loan approval, often called clear to close. Ninth, you close and get the keys. Along the West Michigan lakeshore, plan on roughly 60 to 90 days from the day we start showing homes to closing, assuming financing moves smoothly.

Get pre-approved at a minimum, and in today's market I push my buyers toward a fully underwritten approval whenever the lender offers it. A standard pre-approval involves a credit pull, an income conversation, and an automated system approval, but your file may not have been reviewed by a human underwriter yet. With an underwritten pre-approval, an actual underwriter has already verified your income, assets, and credit before you ever make an offer, so you have essentially cleared most of the loan hurdles in advance. On the West Michigan lakeshore, where a good home priced right can still draw multiple offers, that distinction matters. When a seller sees an underwritten buyer, they know the deal is vetted and likely to close quickly. Most pre-approval letters are valid 30 to 90 days, so timing it close to your search makes sense.

Yes. Following the National Association of Realtors settlement, as of August 17, 2024 an agent working with a buyer must enter into a written agreement before touring a home, including in-person and live virtual tours. That rule is in full effect in Michigan in 2026. The agreement must conspicuously disclose the amount or rate of compensation your agent will earn, and that figure is negotiable, not set by law. What the rule really requires is that the conversation happen and be documented up front. It does not force you to pay your agent out of pocket. In many West Michigan transactions the seller's side still contributes toward the buyer-agent compensation, but how that works is now spelled out clearly in writing. I walk every buyer through the agreement line by line before anyone signs.

I always start from a comfortable monthly payment, not the maximum loan a lender will approve. A common guideline is to keep your total housing payment, including taxes and insurance, around 28 percent of your gross monthly income, though the right number depends on your full financial picture. Across Allegan, Muskegon, and Ottawa counties the median sale price recently sat around $355,000, while Muskegon, with a median closer to $250,000, stands out as the most affordable lakeshore market with real inventory. Your down payment shapes the rest. FHA allows as little as 3.5 percent down, conventional first-time programs go as low as 3 percent, and eligible buyers can use VA or USDA with no money down. Budget for closing costs too, which for buyers typically run about 2 to 5 percent of the price. I am a tax and legal layperson, so for tax-sensitive planning I will point you to a professional.

Inventory on the lakeshore has loosened recently, with active listings up year over year, so buyers have more breathing room than during the peak frenzy, but this still is not a traditional buyer's market. Well-priced homes in desirable spots move quickly. A strong offer starts with a clean price backed by a solid lender letter and a sensible closing timeline. In tighter situations I sometimes use tools like an escalation clause, which names your starting price, your increment, and a firm cap you are genuinely willing to pay. Some buyers add appraisal-gap coverage, agreeing to pay a set amount above the appraised value in cash. I am cautious with that and with waiving inspection rights, because both shift real risk onto you. Because I am a licensed appraiser, I can help you gauge whether a stretch price is supportable before you commit to it.

Earnest money is a good-faith deposit that shows the seller you are serious. In Michigan it commonly runs around 1 to 2 percent of the price, with flat amounts of roughly $1,000 to $5,000 typical on entry-level and mid-priced homes, adjusted for how competitive the situation is. It is normally held in escrow by the title company, not by the seller or either agent, and it is credited toward your costs at closing. Contingencies are the protections written into your purchase agreement. The main ones are the inspection contingency, often a 5 to 10 day window in West Michigan contracts, the financing contingency, and the appraisal contingency. If a contingency is not met and you cancel within its terms, your earnest money is generally refundable. Waiving a contingency can make an offer look stronger but exposes you to real cost, so we weigh each one carefully.

Yes, I recommend an inspection on nearly every purchase. A standard Michigan home inspection generally runs a few hundred dollars and takes a couple of hours, with the inspector evaluating the roof, foundation, electrical, plumbing, HVAC, and major systems. For older homes in lakeshore towns I often suggest layering on a radon test, a sewer scope where there is an older clay lateral, and lead-paint awareness for anything built before 1978. Homes near the water can also warrant attention to moisture, crawl spaces, and well and septic systems. Because I have both a licensed-appraiser and a title and abstracting background, I can usually tell you ahead of time which findings are genuine negotiation leverage and which are normal wear for a home of that age. The inspection period is your window to negotiate repairs, ask for a credit, or walk away with your deposit intact.

Once you are under contract and your loan is in underwriting, your lender orders an appraisal to confirm the home is worth what you agreed to pay, since the property secures your loan. The appraisal itself usually takes one to two weeks in a normal market and can stretch longer when appraisers are busy. If the value comes in at or above your price, your loan moves ahead smoothly. Historically only a minority of appraisals come in low, so most buyers never face this. If it does come in low, the lender will only lend against the appraised amount, which creates an appraisal gap. Your options are to renegotiate the price with the seller, cover the difference in cash, or in some cases request a reconsideration of value if the comps were weak. As a licensed appraiser, I can read the report critically and advise on the strongest path.

After the appraisal is reviewed and your file clears underwriting, the lender issues final approval, often called clear to close. It means the underwriter has confirmed you meet every requirement and the loan is approved to fund. Between contract and this point, the underwriter is verifying your income, assets, credit, and the appraisal, and they may ask for updated documents. My biggest piece of advice during this stretch is to keep your finances boringly stable. Do not change jobs, open new credit cards, finance a vehicle, or make large unexplained deposits, because any of those can stall or jeopardize approval. At least three business days before closing you will receive your Closing Disclosure showing final numbers, a federal requirement that gives you time to review them. I keep a shared timeline with my buyers so you always know which document or signature is needed that week and never feel like the process is happening to you.

Closing in Michigan is typically handled at a title company, where you sign the final loan and ownership documents, bring your remaining funds by wire or cashier's check, and receive the keys. Buyer closing costs generally run about 2 to 5 percent of the purchase price and include items like your loan origination fee, lender's title insurance, recording fees, and prepaid taxes and insurance. By custom the seller usually pays the owner's title insurance policy that protects you and the state transfer tax, though terms can be negotiated. Coming from a title and abstracting background, I read the title commitment and settlement statement closely so surprises do not show up at the table. One Michigan reminder: if the home is your primary residence, file the principal residence exemption to remove the local school operating millage from your tax bill. For tax and legal questions, I will always point you to a qualified professional.