Buying a Michigan Home? Roles for Your Real Estate Agent and Attorney

When buying a home in Michigan, what tasks are best handled by an attorney, and what tasks does the real estate agent ordinarily handle?

In Michigan, most all home purchasers use the services of a real estate agent. Some also use an attorney. This article outlines what a real estate agent and an attorney will do for you throughout the process of buying your new Michigan home.

Why Use a Real Estate Agent to Buy a Home in Michigan?

A big part of the agent's job is simply to locate homes that are good prospects for you. A real estate agent has access to the multiple listing service (MLS) used to list properties for sale in Michigan. There are different regions of the MLS throughout Michigan, so it is important to hire a real estate agent who works in the area where you would like to buy a home.

Your real estate agent will ask you what qualities you are looking for in a home as well as your budget. The agent will send you lists of available properties that you might want to tour.

Although you can visit open houses (which usually happen on Sundays) unaccompanied, to visit a house during the rest of the week, you’ll normally need an agent along. Houses for sale in Michigan will normally have a lockbox located on the front door or gate with a key inside, with which to access the home. Real estate agents in Michigan will give the lockbox code only to another real estate agent. Your real estate agent will thus join you on all home tours to give you access to the home and to answer any questions you have about the value and features of the home.

Once you find a home on which you want to make an offer, your real estate agent will research how much the home is worth. Your real estate agent will present a list of comparable homes to you near the home you are considering buying, which are either also listed for sale or have recently sold. This comparable market analysis will help you decide how much to offer on the home.

How Much Does It Cost to Hire a Real Estate Agent?

As a home buyer, you will not have to pay your real estate agent. The seller will pay his or her real estate agent a commission out of the proceeds of the sale, and that agent should split the commission with your agent. In Michigan, the real estate agent for the purchaser, and the real estate agent for the seller (also known as the listing agent) normally equally split a 6% commission paid by the seller.

This payment method is not required by Michigan law, but is common practice, so be sure to ask your real estate agent about these details before you sign a contract to use the agent’s services. Common practice can be changed by a written agreement.

Who Helps Me Make a Written Offer on a House?

Typically, a standard purchase agreement form is used to make an offer on a home in Michigan. There will be blank spaces on the form where your real estate agent will fill in terms such as the method of purchase (for example, by cash or mortgage and the percentage of each), the purchase price, the period for inspection, and the closing date. The terms and conditions in this standard purchase agreement form are what mortgage companies expect in order to approve a sale.

There may be occasions when parts of the standard form language need to be changed. If so, these changes need to be made by a Michigan-licensed attorney. A real estate agent is not allowed to draft a contract, and a purchase agreement is considered a “contract” once it is signed by both the purchaser and the seller.

For example, if the purchase agreement method of payment is to use a land contract, an attorney needs to write this agreement. Or, if the purchaser requires a home warranty or that all repairs needed on the home be performed at the expense of the seller, an attorney needs to change the standard form language to add these requirements.

Why Use an Attorney to Buy a Home in Michigan?

Many Michigan attorneys specialize in real estate law and can be very helpful to someone buying a home in Michigan. Your attorney will advise you on your rights and the home seller’s rights. For example, an attorney will be able to tell you whether you can back out of the purchase of the home after you find defects in the home you are unwilling to have repaired.

An attorney can review all of the closing documents for the purchase of your new home; something your real estate agent will not do. Your attorney will request an “attorney’s package” of the closing documents. This attorney’s package contains many documents you would not otherwise see before closing with a title company.

The attorney will review the deed transferring legal title to the home from the seller to you for accuracy and legal requirements. The settlement statement listing all of the accounting for the sale will also be reviewed, and the attorney will double check all of the calculations regarding property taxes, transfer taxes, recording fees, commission, document fees, down payment amount, and mortgage values.

Your Michigan Attorney’s Role With the Title Insurance Company

Your attorney will also review your title insurance policy. Title insurance is required in Michigan for all home purchases using a mortgage. The only communication your real estate agent will have with your title insurance company will be to coordinate the closing date of the sale. An attorney can be valuable at this phase of buying a home in Michigan.

The attorney will discuss the effective date of the policy with you as well as any exceptions to the policy. An exception is an interest in the property or a condition that the title insurance agent found that affects the title to the property and that the title insurance agency is not willing to insure.

Examples of exceptions include easements or other third-party rights to use a portion of the property. Your attorney can obtain copies of all documents related to each exception and review them with you to determine whether each is something worth negotiating with the title insurance company or the seller, or is just something to be aware of as the new home owner.

How Much Does It Cost to Hire a Michigan Real Estate Attorney?

A Michigan real estate attorney may charge you a one-time flat fee that covers all of the services listed in this article and more, or may charge an hourly rate. The hourly rate can be different for different attorneys. This is something you would want to ask about when interviewing an attorney to advise you on the purchase of your new home in Michigan.

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