First time
home buyer's
guide
Every step from the first conversation to the day you get keys. Offer, inspection, appraisal, closing, and the quick math on what you can actually afford.
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jayshahrealestate.com
Buyer Guide · 2026
Buying your first home in Metro Detroit
A plain walk through what actually happens, from the first conversation to the day you get the keys.
I am a residential agent with New Era Real Estate in Troy, and I work across Metro Detroit and the city of Detroit. I grew up in Novi and lived in Detroit from 2018 to 2023. Before I got my license in 2023 I worked as a title searcher, so I spent a few years reading the paperwork behind these deals before I ever wrote one.
A lot of my buyers are first-timers, and the same questions come up every time, usually right when things start moving fast. Read this once now and it will make much more sense when you are in the middle of it.
What you can afford
There are two numbers here and they are not the same. One is what a lender will approve you for. The other is what you are comfortable paying every month for the next several years. Start with the second one.
Lenders work off your gross monthly income, meaning before taxes. A common target is a housing payment at or under 28 percent of that, and all of your monthly debt payments including housing at or under 36 to 43 percent. Those are guidelines, not hard walls, and different loan programs stretch them.
Your payment has four parts
A condo or a home in an association adds an HOA fee on top of all four, and lenders count that fee against you the same way they count a car payment.
Quick math by income
| Gross annual income | Per month | Housing budget at 28% | Rough max price | 5% down payment |
|---|---|---|---|---|
| $60,000 | $5,000 | $1,400 | $155,000 | $7,750 |
| $85,000 | $7,083 | $1,980 | $225,000 | $11,250 |
| $110,000 | $9,167 | $2,565 | $295,000 | $14,750 |
| $150,000 | $12,500 | $3,500 | $410,000 | $20,500 |
Illustration only, not a quote. Assumes 5 percent down, a 30 year fixed loan at 6.75 percent, property taxes at 2 percent of price per year, $1,400 a year for insurance, mortgage insurance at 0.5 percent of the loan, and no other monthly debt. Change any one of those and the number moves. Taxes in particular swing hard by address. A lender pre-approval is the real number, and it is free.
Monthly debt eats buying power faster than a small down payment does. Every $300 a month in car payments, student loans, and credit card minimums takes roughly $35,000 off the top of your price range. Clearing one small loan before you apply can move your number more than saving another $5,000.
Quick math on the payment
Rates move, so here is the math across a range instead of pinned to one number. Find the column closest to what your lender quoted you and work from there. All of this is principal and interest only, on a 30 year fixed loan. Taxes, insurance, mortgage insurance and any association dues go on top.
Monthly principal and interest per $100,000 borrowed
| Rate | Per $100,000 |
|---|---|
| 6.0% | $600 |
| 6.5% | $632 |
| 7.0% | $665 |
Here is how to use that table. Say you are buying a $265,000 home and putting 5 percent down. Your down payment is $13,250, so you are borrowing $251,750, which rounds to about 2.5 hundred-thousands. At 6.5 percent that is 2.5 times $632, or roughly $1,580 a month in principal and interest.
That $1,580 is not your payment yet. On that same house, property taxes at 2 percent of price come to about $442 a month, homeowner's insurance around $117, and mortgage insurance on a 5 percent down conventional loan roughly $105. Add it up and you are at about $2,244 a month. The loan itself is only about 70 percent of what leaves your account.
Run it the other direction if you have a monthly number in mind. If $2,000 a month is your ceiling, subtract roughly $600 for taxes, insurance and mortgage insurance, which leaves about $1,400 for principal and interest. From the table, $1,400 at 6.5 percent supports somewhere near $220,000 of loan, so with 5 percent down you are shopping around $230,000. Taxes swing this the hardest, so the number moves by city and by address.
What a given payment can borrow
| Principal & interest per month | At 6.0% | At 6.5% | At 7.0% |
|---|---|---|---|
| $1,000 | $166,800 | $158,200 | $150,300 |
| $1,250 | $208,500 | $197,800 | $187,900 |
| $1,500 | $250,200 | $237,300 | $225,500 |
| $1,750 | $291,900 | $276,900 | $263,000 |
| $2,000 | $333,600 | $316,400 | $300,600 |
| $2,500 | $417,000 | $395,500 | $375,800 |
Down payment in real dollars
| Purchase price | 3% conventional | 3.5% FHA | 5% | 10% | 20% |
|---|---|---|---|---|---|
| $150,000 | $4,500 | $5,250 | $7,500 | $15,000 | $30,000 |
| $200,000 | $6,000 | $7,000 | $10,000 | $20,000 | $40,000 |
| $250,000 | $7,500 | $8,750 | $12,500 | $25,000 | $50,000 |
| $300,000 | $9,000 | $10,500 | $15,000 | $30,000 | $60,000 |
| $350,000 | $10,500 | $12,250 | $17,500 | $35,000 | $70,000 |
| $400,000 | $12,000 | $14,000 | $20,000 | $40,000 | $80,000 |
Arithmetic illustrations only, not quotes, and they exclude taxes, insurance, mortgage insurance and association dues. Your lender's numbers are the real ones, and a licensed loan officer is the person to get them from.
There is a calculator on my site that does all of this for you. Put in a purchase price, a down payment and a rate, and it gives you the monthly payment with a property tax estimate built in, so you are not working off the rough figures on this page.
jayshahrealestate.com/calculatorYou do not need 20 percent down, and waiting until you have it is how people stay renters for another four years. Conventional loans go as low as 3 percent for qualified first time buyers, FHA sits at 3.5 percent, and VA and USDA can go to zero if you qualify. Under 20 percent you pay mortgage insurance, which on a conventional loan comes off once you have built enough equity.
Do not spend every dollar you have on the down payment either. Closing costs are separate and real, and you want a cushion left over for moving, for whatever you want to change right away, and for the first thing that breaks.
Get pre-approved before you look
I know it feels backwards. You want to see houses, not upload pay stubs. Do it anyway. An offer without a pre-approval letter attached is not treated as a real offer, and shopping without one means looking at houses that may not be yours to buy.
Pre-qualified is not pre-approved
Pre-qualified means you told a lender some numbers and they did quick math. It is worth very little and listing agents know it. Pre-approved means they ran a much more thorough check, reviewed your actual documents, and put their name on a letter. Many lenders can do this with a soft credit check, which does not affect your credit score. That is the one you need.
What a lender is really looking at
Have these ready
Choose a lender, not just a rate
Once you are pre-approved, freeze your financial life until the keys are in your hand. Do not open a credit card. Do not finance or lease a car. Do not change jobs. Do not make a large deposit you cannot document. Do not pay off a collection account without asking your lender first, because it can move your score the wrong way.
Lenders re-pull credit and re-verify employment right before funding. Any one of these can kill your loan the week of closing, after you have already paid for an inspection and an appraisal.
Cash you need at closing
Your cash comes in three buckets: the down payment, the closing costs, and the prepaid items the lender collects up front to start your escrow account. The down payment is the one everybody plans for. The other two are where first-time buyers get caught short.
Plan on closing costs and prepaids running roughly 2 to 4 percent of the purchase price on top of your down payment. Your lender is required to give you a written Loan Estimate early on with real numbers for your loan.
| Item | Typical range | When you pay |
|---|---|---|
| Earnest money deposit | $1,000 to $5,000 | Right after the offer is accepted. Credited back to you at closing. |
| Home inspection | $400 to $600 | Out of pocket, day of inspection |
| Sewer line camera scope, optional | $150 to $350 | Out of pocket, during inspection |
| Appraisal | $550 to $750 | Charged by the lender, often up front |
| Lender origination and underwriting | 0 to 1% of the loan | At closing |
| Lender title policy, settlement fee, recording | $900 to $1,700 | At closing |
| First year homeowner's insurance | $1,200 to $2,000 | Prepaid at closing |
| Escrow setup for taxes and insurance | 2 to 6 months of each | At closing |
| Prepaid interest and prorated taxes | Varies by closing date | At closing |
These ranges are typical for this market and are estimates only, not quotes. For accurate numbers on your loan and your insurance premium, talk to a licensed loan officer and a licensed insurance agent. I am happy to connect you with one of each if you would like.
Two things that work in your favor in Michigan
The seller customarily pays the state and county transfer tax and the owner's title insurance policy. That is a meaningful cost you are usually not carrying.
You can also ask the seller to pay part of your closing costs in the offer. That is called a seller concession. How much room you have depends on how much competition the house has. On a home that has been sitting, this is often easier to get than a price cut.
How the process works
Eight steps, start to keys. Everything else in this guide is a closer look at one of them.
What you want, which areas, what you want to spend, and when you need to be in. If you do not have a pre-approval yet I will point you to a lender. No cost, no commitment, and it tells us what we are actually shopping for.
I set up a search that pushes new listings to you as they hit the market. You will also find things on your own on Zillow, Redfin, and social media. Send them all over. Some of what you find online is already sold, already under contract, or was never really for sale. I will tell you which is which and pull the real listing history.
Usually three to six in a run so you have something to compare against. Text me the addresses and I will get us in, often same day or next day. The first tour is where your list of must-haves gets honest.
Ideally you have a pre-approval before we start touring, and at the latest you get one right after that first showing session. It is the one step that turns you from someone who is looking into someone who can buy.
It is free, it usually takes a day or two, and it does three things for you. It tells you your real number, so you stop guessing and you never fall for a house you cannot get. It locks in what your monthly payment would actually look like, which is the number that matters more than the price. And it means the moment we walk into the right house, we can write the offer that night instead of scrambling for paperwork while somebody else writes theirs.
I have seen buyers spend weeks touring $300,000 homes and then find out they qualify for $250,000. Every one of those showings was time spent on houses they were never going to get. Knowing your real number first is what keeps that from happening to you.
If you are buying with cash you do not need a pre-approval. You need proof of funds instead, which can be as simple as a recent bank statement showing the money is there.
It also changes how the other side sees you. Almost no seller in this market will look at an offer without a pre-approval attached, and listing agents read it before they read your price. Two buyers can offer the same money and the one with a solid pre-approval wins, because the seller believes that deal will actually close.
It tells me something too. Getting pre-approved shows me you are serious about buying a home, and that lets me work differently for you. I will chase down off-market leads, get us into homes on short notice, and move on something the day it hits, because I know we are ready to actually write.
Ask me and I will connect you with a lender I trust. One phone call, no cost, no obligation to use them, and no commitment to buy anything. Worst case you find out you are ready sooner than you thought.
We go over the price, the terms, and what the listing history tells us before we send it. Then we wait on the seller. Accepted, countered, or rejected.
What I generally write is a 5 to 7 day inspection contingency, plus an appraisal contingency. The inspection contingency gives us 5 to 7 days to inspect the home and negotiate or walk away. The appraisal contingency covers us if we are using a mortgage and the bank says the property is worth less than what we are purchasing it for, in which case we are allowed to walk away from the deal. Most of the time the seller lowers the price to what the bank says.
If they accept, the agreement comes back to you signed by the seller, and you sign it a second time. That second signature is called bottom lining it. Once the seller receives that bottom lined document, we are in contract.
Submitting an offer does not bind you to anything until seller receives the bottom line offer.
Usually we put in around 1 percent of the property price as earnest money. That money comes back to you and goes toward either your closing costs or your down payment on the home. It is there to show the seller you are serious about buying this home.
If you leave the deal for a reason that is not one of the contingencies declared in the contract, the seller gets to keep that earnest money. If you leave during the inspection or appraisal contingency, you walk away from the deal with your money.
Once both sides sign, we book the inspection immediately. We typically write a 5 to 7 day window, so there is no time to sit on it.
I ideally recommend to get the inspection scheduled within the first few days of the inspection period. You will have hired an inspector and you're welcome to bring any trusted friends or family along too. This is the time where you can negotiate and find out any issues to property.
Your lender orders it and we wait for the number to come back. This is the quietest stretch of the deal and usually the longest.
After the appraisal, most of the work is done. Underwriting finishes, we walk the house one more time, you sign at the title company, and you get the keys. On a mortgage, accepted offer to keys is usually 30 to 45 days.
The first few steps are as slow or as fast as you want. Once an offer is accepted, everything compresses. Inspection, appraisal, underwriting and closing all happen inside roughly the same 30 to 45 days, and every one of them has a hard deadline attached. Answer your phone during that stretch and send documents the same day they are asked for, and the rest of it tends to take care of itself.
The search and the showings
I am in the MLS directly, so I see listings and status changes as they happen rather than whenever a public site catches up. I go find properties that fit what you told me and send them over.
You look too. Zillow, Redfin, a sign in a yard, driving a neighborhood on a Saturday, something a friend mentions. Send me anything, even when you are not sure about it. I will pull the full record, tell you what is actually going on with the listing, and work on getting us in. The buyers who land the right house fastest are the ones who send me the most.
What to actually look at on a showing
Photos are shot to sell. Twenty focused minutes in the house tells you more than fifty pictures.
Text me these after a showing
Writing the offer
An offer is a full set of terms, not just a number. Sometimes a term matters more to the seller than the price does, and that is where we can win a house without overpaying for it.
The listing agent may call for highest and best, which means every buyer gets one more shot by a deadline. Decide your real ceiling before that call comes, not during it. Losing a house you can afford is survivable. Winning one you cannot is not.
The Seller's Disclosure
Michigan requires sellers of most residential property to give you a written Seller's Disclosure Statement covering known conditions and defects. Read all of it. Two things to know. Certain transfers are exempt, including foreclosures and some estate sales. And when the seller never lived in the house, which is common with flips, the disclosure tells you close to nothing. Less disclosure means the inspection carries more weight.
Strengthening an offer without just paying more
In a competitive situation somebody will suggest waiving your inspection to win. Occasionally that is a calculated risk worth taking on a newer home with a lot of information available. Often it is how a first time buyer inherits a $30,000 problem in year one. I will give you my honest read either way, and I am not going to talk you into it to close a deal.
The inspection
We usually write a 5 to 7 day inspection window. The clock starts the moment both sides have signed, so we book the inspector the same day. You hire the inspector and you pay them directly, which is exactly why they work for you and not for anybody else in the deal.
Go to the inspection if you can. Two to three hours, follow the inspector around, ask questions. You will learn more about the house in that window than in every showing combined, and you will learn where the water shutoff is.
The report is not pass or fail. It will run 40 pages or more and it will flag things on a brand new house too, because that is the inspector's job. Sort what comes back into three piles: safety and structure, big systems near the end of their life, and cosmetic or routine maintenance. The first two are worth negotiating over. The third is homeownership.
What a standard inspection covers
What it does not cover, and what to add
Inside the five to seven days
What to pay attention to in older Metro Detroit homes
A lot of the housing stock here was built between 1910 and 1960, and that means a specific set of things show up over and over. Age alone is not a problem. Deferred maintenance is.
Start with water and the roof. Ask how old the roof is and how many layers are on it. In the basement, look for staining along the walls, efflorescence, active seepage, a sump pump that runs constantly, and grading outside that slopes toward the house instead of away from it. Most basement water problems in this market are gutter and grading problems wearing a scarier costume, but not all of them.
Then the mechanicals and their age. Furnaces and water heaters have a useful life, roughly 15 to 20 years for a furnace and 10 to 15 for a water heater. Neither one being old is a dealbreaker, but two systems both due at once is a real number you should be planning for.
Electrical and plumbing are where older homes cost real money. Watch for fuse boxes, knob and tube wiring, ungrounded outlets, and low amp service. Some insurance carriers will not write a policy on knob and tube at all, so loop your insurance agent in early if the inspector finds it. On the plumbing side, galvanized supply lines and a lead water service line are both common in the city and both worth pricing out.
Scope the sewer line. A standard inspection does not include it. On an older home with mature trees, a camera scope runs a couple hundred dollars and it is one of the cheapest ways to avoid a five figure surprise from a collapsed or root filled clay line. Ask for it.
Also expect the paperwork side of old houses. Homes built before 1978 may have lead paint, and you will get a disclosure about it. Asbestos wrap on old ductwork and pipes is common and is usually managed rather than removed. Finished basements, additions, and converted attics are worth asking about permits on, because unpermitted work becomes your problem the day you own it.
Vacant homes get their own list. Frozen and burst pipes, missing copper, a stripped furnace, and utilities that have been off long enough that nothing can be tested. If a house has been sitting empty, make sure the inspector can actually run the systems, and get the utilities turned on before the inspection if that is what it takes.
You have three moves: proceed as is, ask the seller for repairs or a credit, or terminate and get your earnest money back as long as you are inside the window. Asking for a credit instead of repairs is often better, because then the work gets done your way by your contractor.
Get your repair quotes during the inspection window, not after it closes. Once that window passes, your leverage is gone.
What to watch for
Every inspection report comes back with dozens of items on it, and the first read is alarming for everybody. That is the inspector doing their job, not a verdict on the house. The useful move is sorting what came back by what it actually costs.
Do not panic over these
Missing GFCI outlets, a loose handrail, a stuck window, dirty ducts, a missing dryer vent cover, minor settlement cracks, a working appliance that is simply old, a leaky hose bib. These are line items and cheap fixes. Chasing every one of them is how buyers annoy a seller into refusing the things that actually matter.
Pay extra attention on a rehab
Detroit and the surrounding suburbs have a lot of flips, and the work ranges from excellent to alarming. A beautiful kitchen tells you nothing about what is behind the drywall. Ask whether permits were pulled and inspections passed on the electrical, plumbing and mechanical work. Unpermitted work hidden behind new finishes is the most expensive kind of pretty.
Ask for money, not repairs
A seller with one foot out the door hires the cheapest contractor who answers the phone, and you inherit that work. Take the credit and hire your own person on your own timeline.
Not whether anything is wrong with this house, because something is always wrong with every house, including new construction. The question is whether the things that are wrong are things you can live with, afford to fix, or get the seller to pay for. That is the whole decision, and it is the one we work through together once the report is in.
The appraisal
Once the inspection is settled, your lender orders the appraisal. An independent appraiser visits the home, looks at recent comparable sales, and puts a value on it. They are not working for you and not working for the seller. The lender needs to know the house is worth what they are lending against, because if the loan goes bad the house is the collateral.
Ordered, completed, and returned usually takes one to two weeks. Then we find out which of three things happened.
This is the good outcome. You are buying the house for less than an independent appraiser says it is worth, and that difference is equity you own on day one. Nothing about your loan or your price changes. The seller does not get to raise the price because it appraised high.
The most common result, and a non event. Nothing changes, the file moves to underwriting, and we keep going toward closing.
The lender will only lend against the appraised value, so there is a gap to solve. You have options and we pick one together.
This stretch feels slow because there is nothing for you to do but respond to the lender. Send every document they ask for the day they ask for it. Almost every delayed closing I have seen traces back to a document sitting in somebody's inbox.
What a gap looks like
Say you are buying at $300,000 and it appraises at $285,000. The lender will only lend against $285,000, so there is a $15,000 gap between what the house is worth on paper and what you agreed to pay. That gap has to get resolved before anyone closes. In practice most low appraisals end one of two ways: the seller lowers the price to what the appraiser said, or the two sides land somewhere in the middle, with the seller coming down some and you coming up some.
Can we dispute it
Sometimes. We can submit better comparable sales the appraiser may have missed and request a reconsideration of value. Be realistic. It works occasionally, not usually, and it costs time on the contract clock either way.
Heavily renovated Detroit homes can appraise short, because comparable sales on the block have not caught up to the finish level inside the house. Worth knowing going in, and it is part of how we decide what to offer.
Closing
After the appraisal, most of the deal is behind you. Underwriting clears its final conditions, the title company confirms clean title and prepares the paperwork, and we set a date.
While that is happening
Who pays what
Do not blow up your own loan
Your file gets re-verified right before closing. Between the offer and the keys, do not change jobs, do not open a new credit card or finance a car, do not make large deposits you cannot document, and do not buy furniture or appliances on credit. Wait until after you close. This is the single most common self-inflicted problem in the process.
The last week
You get a Closing Disclosure at least three business days before closing. It lists your final cash to close and every fee. Read it against the Loan Estimate you got at the start and tell me about anything that moved. Three business days is a legal minimum, not a courtesy, so you have time to ask.
The final walkthrough happens the day of or the day before. We are checking that the house is in the same condition it was in, that any agreed repairs actually got done, that everything that was supposed to stay is still there, and that the furnace, water heater, and outlets all run. If something is wrong, we deal with it before you sign, not after.
Michigan closings happen at a title company. You will sign a stack of documents, most of which you have already seen. Bring a government photo ID. Your funds get wired ahead of time, and a cashier's check for smaller amounts if the title company allows it.
Wire fraud in real estate is real and it is common. Before you send anything, call the title company to verbally confirm the wire instructions, using a phone number you looked up yourself rather than one in an email. Never trust changed wire instructions that arrive by email, even if the email looks exactly right. A wire that goes to the wrong account is usually gone.
Bring to the table
Do these your first week
Then you get the keys, and I will tell you where the water shutoff is one more time.
House, condo, or co-op
What you are legally buying is different in each of these, and that changes your monthly cost, your financing, and how easily you can sell it later.
Single family
You own the land and the structure on it. Roof, furnace, lawn, snow, and every repair is yours. It is the most freedom, the most maintenance, the easiest to finance, and the easiest to resell. Some subdivisions still have an HOA with dues and rules even though the homes are detached, so always ask.
Condo
You own the inside of your unit. The association owns the building, the roof, and the grounds, and you pay a monthly fee toward maintaining them. That fee is not optional and it is not fixed. It can rise, and the association can levy a special assessment for a big project like a roof or a parking deck.
Read the documents during your inspection window, not after. The master deed and bylaws tell you what you own and what the rules are. The budget and reserve balance tell you whether the association can pay for what is coming. The last year of meeting minutes tells you what they are arguing about. Also check the fee history, any pending special assessments, rental caps, and pet and parking rules.
Co-op
You are buying shares in a corporation that owns the building, and those shares give you the right to occupy a unit. You do not get a deed to real estate. Financing is a share loan rather than a mortgage, and very few lenders around here write them. The board has to approve you, which takes time and paperwork, and they can say no. Co-ops are rare in Metro Detroit but they exist, and the low price tag on one is usually explained by all of the above. If you are looking at one, tell me early.
HOA on a single family home
Common across newer Oakland and Macomb subdivisions. Dues are lower than a condo, but the rules are real: exterior colors, fences, sheds, boats and trailers, landscaping standards. Get the bylaws and the current dues in writing, and confirm there is no outstanding assessment before you commit.
With a condo, the lender approves the building as well as you. You can be perfectly qualified and still get declined because of the association. The usual reasons are too many units being rented instead of owner occupied, reserves that are too thin, pending litigation involving the association, one owner or entity holding too many units, or an association that simply will not return the lender's questionnaire.
FHA loans have their own list of approved condo projects, which is narrower. Tell your lender it is a condo on the first phone call so the building review starts early instead of surfacing three weeks in.
| Single family | Condo | Co-op | House + HOA | |
|---|---|---|---|---|
| What you own | Structure and land | Unit interior | Corporation shares | Structure and land |
| Financing | Easiest | Project must qualify | Hardest, few lenders | Easiest |
| Monthly extra | None | Dues, often sizeable | Sizable maintenance fee | Dues, usually modest |
| Exterior upkeep | All yours | Association | Corporation | Yours, with rules |
| Resale | Broadest buyer pool | Good if warrantable | Slowest, board approves | Broad |
MICHIGAN PROPERTY TAXES
Taxes are the part of the payment that first-time buyers underestimate the most, and in Detroit they can vary enormously between two houses on the same block. This section is worth five minutes.
Your bill is not based on what you paid
Michigan taxes are calculated on taxable value, which is roughly half of what the assessor considers the home's market value, multiplied by the local millage rate. The tax figure you see on a listing is the current owner's bill under their circumstances. It is a starting point for research, not a prediction of your bill.
Uncapping is the big one
While one owner keeps a home, its taxable value can only rise by a small capped amount each year. When the property sells, that cap comes off. The year after you buy, taxable value resets to half of the home's market value. On a house that has been in the same family for twenty years, that reset can raise the bill significantly. Ask what the taxes will be after uncapping, not what they are today, and build your monthly budget around that number.
File your Principal Residence Exemption
If the home is your primary residence, you file a Principal Residence Exemption with the local assessor and it exempts you from a chunk of the school operating millage. It is a form, it is free, it saves real money every single year, and there is a filing deadline. Do not skip it. I will remind you, and so will the title company, but it is on you to file it.
Neighborhood Enterprise Zones
Detroit has designated Neighborhood Enterprise Zone districts where a qualifying home can carry a certificate that substantially lowers the property tax bill, sometimes for years. New construction, rehabbed homes, and certain existing homes in those districts can qualify. This is a large part of why two nearly identical houses on the same street can have very different tax bills. Whether a specific address has a certificate, and whether it carries over to you, is worth confirming with the City of Detroit before we write the offer rather than after. For owner occupants who qualify, an NEZ Homestead abatement cuts the City of Detroit and Wayne County operating millage roughly in half, and it comes with a requirement to put at least $500 into the home within two years. It is not automatic and it does not simply follow the house to you. You apply, and you need the deed in your name, a Property Transfer Affidavit, and your Principal Residence Exemption on file.
Homestead versus non-homestead
If the house you are buying was a rental or a flip, it is currently non-homestead and taxed at the higher rate. Filing your Principal Residence Exemption after closing is what moves it. Miss the filing deadline and you carry the higher rate for the year.
MSHDA, the Michigan assistance program
The Michigan State Housing Development Authority runs the MI Home Loan, which pairs with a down payment assistance loan of up to $10,000 toward down payment and closing costs. Broad strokes: a minimum credit score around 640, household income limits that vary by family size and location, a required homebuyer education course, and first time buyer status in most of the state, though repeat buyers can qualify in targeted areas. Not every lender participates, so ask on the first phone call. Terms and limits change, so confirm current details with a participating lender.
Ask this before you offer
What is the current taxable value and assessed value? Is it homestead or non-homestead right now? Is the property in an NEZ? Are there any unpaid taxes, water bills, or special assessments attached to it? Title work catches most of this, but I would rather know before we are under contract than after.
The calculator on my site estimates property taxes from the price you purchase at, which is a much better starting point than the seller's current bill.
jayshahrealestate.com/calculatorIt does not account for NEZ abatements or any other special tax program, so if a property has one, the real bill will come in lower than the estimate. For an exact number on a specific address, ask me and we will pull it.
A $300 a month difference in property taxes is about $50,000 of buying power. That is not a rounding error, it is a different house. Before you fall in love with an address, we pull the actual tax picture for it.
Timeline at a glance
Counting from the day the offer is accepted. Every deal drifts a little, but this is the shape of it on a typical financed purchase.
| Day | What happens |
|---|---|
| Day 0 | Offer accepted and signed by both sides. Every clock in the contract starts now. |
| Day 1 to 3 | Earnest money delivered to the title company. Inspection booked. Full loan application in with your lender. |
| Day 2 to 7 | Inspection happens, plus a sewer scope or specialist if we ordered one. Repair quotes come in while the window is still open. |
| Day 5 to 10 | Inspection response negotiated and resolved. Condo documents reviewed if it is a condo. |
| Day 8 to 14 | Appraisal ordered and the appraiser visits the home. |
| Day 15 to 25 | Appraisal comes back. Underwriting works the file. Title work and survey ordered. Insurance quoted and bound. |
| Day 25 to 35 | Final conditions cleared, then clear to close from the lender. |
| Day 30 to 45 | Closing Disclosure at least three business days out. Final walkthrough. Funds wired. Sign at the title company. Keys. |
Words you will hear
Mistakes and a checklist
The ten I see most
Before you shop
While you are looking
Once you are under contract
Get pre-approved first. Everything downstream depends on it, and it is the fastest way to go from thinking about buying to actually being able to.
Budget on the payment you are comfortable with, not the one you qualify for, and remember Michigan taxes uncap after you buy. The seller's tax bill is not your tax bill.
Ask questions that feel too basic. You are supposed to not know this. I do this every day and you are doing it for the first time, so there is no such thing as a dumb question here. The buyers who ask the most end up in the best position.
The first step is a conversation
Call or text me and tell me what you are looking for. If you are six months out from buying, that is not too early, that is the best time to start. We can figure out the number, get you in front of a lender, and start looking at homes so you know what your money actually buys here.
Troy, MI 48083
This guide is general information about the home buying process and is not legal, tax, or lending advice. All dollar figures are illustrative examples, not quotes or offers of credit. Property taxes, program rules, and filing deadlines change, so confirm anything specific to an address or a loan with the appropriate lender, assessor, or municipality. Equal Housing Opportunity.