What’s going on everyone, it’s Andrew McManamon, a licensed real estate professional in the great state of Michigan. I wanted to do something a little different and go over buying my new house from start to finish. Stick around, because I am not leaving anything out of this one, and I’ll include a little messy home tour at the end.
Just a little backstory, My girlfriend Elena and I always had a dream to have a home on a lake. It didn’t matter if the home was big, small, or a cardboard box. It just needed to be on a lake. Being a Realtor myself I was on top of every listing that was coming soon and hitting the market, so when we liked something we scheduled a showing asap, so we didn’t miss an opportunity, especially in my market in southeast Michigan, affordable lake houses are very hard to come by.
We found a house that we absolutely loved, so we began to hurry up and get pre-approved since it’s very important to know about how much you can afford before you even consider looking at a house. Shout out to Bonnie Miller with Lynk Financial for helping the process go seamlessly. We gave Bonnie our W2’s, 1099’s, pay stubs going back 2 or so years, bank statements and other financial account information that could help strengthen our approval. We then received a pre-approval letter which we would include with our offer letting the seller know that we can afford the asking price.
We scheduled a showing, looked at the home and found it needed all new floors and the floorplan was not very convenient, meaning they got a little carried away with dormers and for those of you that don’t know what they are, they are windows that are protruding from the roof and have their own little roof on them. They look like this. The dormers added a lot of angles and height issues to the upstairs rooms that wouldn’t be good for a 6’3” fella like myself and on top of that, the home wasn’t even waterfront.
It had a little piece of property across the street with a dock covered by trees that lead out to the lake. The trees and other people’s homes covered the whole view so you couldn’t even see water. That's why it’s important to always see a home in person before you sell yourself on the pretty and heavily filtered property photos or description. We ended up putting an offer in on the home anyway, and we actually got it accepted, but at the same time we found another home right on the water that was so much better, so we ended up rescinding the offer before signatures happened to avoid any issues.
The home just hit the market at 11pm the night before, so I pre-wrote our offer and went to an open house for the second home the same day we got the first house’s offer accepted, and the seller happened to be the real estate agent selling the home which was absolutely perfect. Elena and I built so much rapport with this agent during the open house that she spent all her time talking with us instead of anyone else that passed through the door. We wanted to build that emotional connection by telling the agent how perfect the house was for us and it would be the best place to plant our roots while having the luxury of fishing in the summer and playing ice hockey in the winter. We spent probably 45 minutes to an hour at this open house, whereas most people will spend 10-15 minutes at most quickly moving through each room. Another lesson to learn from this is, instead of trying to avoid the real estate agent at an open house because you think they are just going to try and sell you, take the time to build strong rapport, you never realize how far emotions can actually get you in the home buying process.
After the open house, I clicked send on our offer to be the first one in, as the agent mentioned how much she hated dealing with bidding wars, I figured we’d have a good chance of acceptance that way. I also included a buyer letter stating how nice it was to hear her insight about the home, lake, neighborhood, and to remind her that we were the ones that spoke to her for so long during the open house. I called the agent to tell her we sent over an offer, and ended up having to leave a voicemail.
Then I emailed her later that night and got no response, and lemme tell yah, even being a real estate professional who is a part of the process every single day, there was still a lot of nervousness tacked on and the assumptions of the worst when we didn’t get a response back in a timely manner. I got a call later that night saying she received multiple offers and that she would be looking them over. 24 hours later, we got the call that our offer had been accepted.
I am always anxious to get that call for my clients, but it felt much heavier now that I was the one in their shoes. After acceptance, we submitted an earnest money deposit to let the seller know that we are serious about purchasing the home. I also would begin ordering title work for the home after getting an accepted offer. They will receive all the signed documents to begin their process. In the simplest terms possible, The title company reviews title, issues insurance policies, facilitates closings, and files and records paperwork. Shortly after, we got our home inspection scheduled a few days later.
Shout out to Points North Home Inspections and Action Home Inspections inc. for doing a full home inspection and well and septic inspection. Jake Baker with Points North home Inspections actually bought Elena and I two camping chairs as a gift for the new home. He must’ve known that the couch would take 1-2 months to get! It’s important to do all your due diligence and to ensure you’re not overlooking any catastrophic issues with the home that could cost you a lot of money. When the listing agent and seller says something “works” that doesn’t mean you should nod it off and move on. Their definition of working and yours could be very different. As a new home buyer, you expect everything to work as it should. As a veteran homeowner who has been living in the home for 15+ years, their definition could consist of a lot of duct tape.
After a few back and forth conversations and agreements to cover certain repairs and maintenance items, we were satisfied with the inspection and were ready to proceed. Our mortgage lender scheduled the home appraisal, and continued us through the formal mortgage application. Everything was conveniently digital and whenever there were questions, Bonnie was there to answer them.
It’s not that we didn’t know the answers, it’s the fact that some questions could be answered a couple different ways so we wanted to make sure we marked the correct response to avoid any future issues, and of course this application is extremely personal to the individual, that not every response is the same.
The appraisal ended up coming in $23,000 over the listing price and $12,000 over our offer price. In our scenario, We offered $11,000 over asking price knowing that comparable home sales in the area supported our high offer price. In this situation, the lender would finance up to the amount it was appraised for, so we wouldn’t have to front $12,000 out of pocket. If it appraised for $15,000 less than our offer price (let’s just say) we would need to discuss with the seller whether we’d front them 100% of the cash, meet in the middle, or the seller would decrease the listing price to that amount. Having an appraisal come in high like that, avoids the discussion altogether.
After the appraisal came back, the mortgage lender had a few conditional approval items to take care of. For example, they will verify your employment, look at your income, credit report, etc. After all that is satisfied, the lender will work on getting your final numbers for closing and coordinate with the title company to do the same. After we received the final numbers and closing disclosures, we took the time to review all the documents and make sure all the figures were correct, along with some start and end dates.
We then coordinated a closing date with the sellers (date, time, and location) and wired the funds over to the title company a day before closing. When your closing costs are less than $50,000 you can technically just receive a check in the amount and give it to the title company, but a lot of people will simply receive wire instructions and go to their bank to send the funds. We then had our closing, signed all the documents and received the keys at closing.
At closing you receive a Property Transfer Affidavit and Principal Residence Exemption Affidavit (your state may be different) that you’ll want to take to your local assessor's office to have them stamp and make a copy within 45 days following the day of closing for transfer of ownership and tax purposes or you’ll have to pay a fee. So be sure you do that sooner rather than later.
That was our home buyer experience in a nutshell. The process may seem like it could take a day, but it’s called a process for a reason. The inspection period could take 5-10 days, the appraisal could take 1-2 weeks to get scheduled and completed in full and the conditional approvals for buyers could take an extensive amount of time depending on what the lender is asking for. It’s important to take one step at a time, and to always make sure you have the right people by your side who have your best interests in mind.
This is a HUGE financial decision, as a real estate professional or not the process can get extremely stressful especially when it comes to deadlines. Be patient, and understand that no question is a stupid one. Title companies, mortgage lenders, home inspectors and real estate professionals have made a career out of this process so you don’t have to, and no professional in this industry should look at your questions any other way. So with that being said, don’t hesitate for a second to ask me a question anytime.
Without further ado, here’s a little home tour:
Andrew McManamon is a Michigan REALTOR® with Signature Sotheby’s International Realty and provides real estate services to Buyers, Sellers and Investors throughout SE Michigan including Livingston County, Oakland County, Washtenaw County, Genesee County & beyond. Andrew has become one of the rising stars of Michigan real estate agents. Prior to his real estate career Andrew was responsible for managing a senior living facility in Brighton, Michigan as a dining supervisor and an activities assistant. Andrew’s passion to help people is unlike any other, and he continues to strive to be best resource he can be. Andrew graduated from Cleary University in Howell, Michigan with a double major and currently resides in White Lake, Michigan.