Things to Know About Buying a House in Detroit
This is a guest blog post from Ioana Preda at Gilson Home Group.
If you Google, “buying a house in Detroit,” an overwhelming number of search results mention “buying a house for $500 in Detroit.” I’m here to tell you that buying a house in Detroit for $500 is simply a myth and not the current reality of the Detroit housing market. While this might seem like bad news, there are a lot of positives!
As of a decade ago, Detroit was not a place people wanted to, or even considered, living in. However, Detroit is one of the best places to live in Michigan. The city is full of spirit, and there has been an overwhelming number of people want to be part of Detroit’s renaissance over the past few years. Residents from metro Detroit are flocking to the city, and transplants from other big cities—New York and Portland—are making the move, too. Many nationally renowned companies and startups have made the decision to move their headquarters to Detroit and are also incentivizing employees to live within the city limits.
Supply and demand go hand-in-hand, which is why home values are going up. If you’re hoping to buy a home in Detroit, here are a few things you need to know:
- Yes, it is actually possible to get a mortgage in Detroit!
Once upon a time, it was hard to get a mortgage on a home in Detroit because lenders simply would not finance the homes. But those times are long gone. People are purchasing homes in Detroit and getting mortgages thanks to lenders—like Ross Mortgage—who are committed to understanding how the market is continuously shifting. They’re aware of the growth in certain neighborhoods and can help customers who want to buy a house in Detroit.
When buying a house in Detroit, it’s important to arm yourself with a local real estate agent and mortgage lender. These key players know the market and are committed to the growth of Detroit. Ross Mortgage is devoted to helping their customers identify the best financing options as they look to make the move to Detroit.
- Patience is key.
Although lenders are processing mortgages for homes in Detroit, homebuyers must be patient during the home buying process. Buying a house in Detroit can often take a bit longer than purchasing a home in the suburbs due to previous tax foreclosures. Closing usually takes 30-45 days, but can take an additional one to two months when buying a house in Detroit. It might seem like a long time, but well worth the wait!
- Do your research.
A picture says 1,000 words, but it doesn’t tell the whole story. In today’s digital world, researching your favorite neighborhoods online is an easy task. Find out what you want, don’t want, like and dislike in multiple Detroit neighborhoods before you meet with your real estate agent.
If you’re dead-set on a specific neighborhood but the houses are out of your price range, consider looking a few blocks outside of your dream neighborhood. You’ll still be on the border of your favorite neighborhood, plus the one you choose to live in will likely be the next one on the rise.
I recently asked one of my customers, Clement L.—who also worked with the lenders at Ross Mortgage—what advice he’d give to someone buying a house in Detroit, and he said, “I think Detroit can be a great investment, but you have to be prepared and to know the area before you buy anything. I would advise people to take some time to get to know the city and the neighborhoods before you make this big purchase.”
- Research repairs.
When purchasing in Detroit, it’s highly likely you’ll be purchasing a diamond in the rough. But that diamond in the rough is going to shine fabulously after some repairs.
Most homebuyers know that the cost of rehabilitating a house can be very expensive, but there are cost-effective mortgage options, like the FHA 203(k) loan, that allows homebuyers to finance their home purchase and home improvements in one mortgage loan. With the FHA 203(k) loan and a vision, you can turn any fixer upper into your dream home.
When asked what the most challenging part about buying a house in Detroit was, Clement said, “Many houses need repairs, which can become really expensive. It was always difficult when we saw houses to try to estimate the cost of repair.”
Although repairs can be pricey, Clement still thinks purchasing in Detroit is wise, and has financial benefit. “I think Detroit can be a great investment, and your value will continue to rise.”
Are you looking to buy a house in Detroit? Send us a message so we can help you get you started on your journey to homeownership!
Ioana (pronounced “Wanna”) has been part of the real estate industry for the past 16 years as a realtor, investor, landlord and property manager – both on the East Coast, Midwest, as well as abroad. Her passion is Detroit! Navigating a complex and evolving market, nothing thrills her more than to see the city revitalized by helping homeowners bring homes back to life and their original glory. In addition to her background in mathematics and computer science, Ioana also holds the Accredited Buyer Representative Certification (ABR) and is in the process of completing her Graduate Realtor Institute Certification (GRI). Born and raised in Europe, she lived in various metropolises and has a deep understanding of varied cultural customs and traditions along with fluency in the Romanian and Portuguese languages.
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