Marcellus Wiley out here in LA said ten days ago, on air, that two reliable sources told him JH had already signed the contract.
Well, that's completely false unless Harbaugh signed without his agent knowing anything about it.
I know someone VERY close to Harbaugh's agent, David Dunn. Michigan is definitely in play but Harbaugh is going to see what offer(s) he receives from the Raiders, or any other NFL team.
The caveat in the whole situation is the Niners. They may not let Harbaugh go to Oakland because they don't want him leading a resurgent Raider team, and all the media hype that goes with it, especially when they are in the same media market.
Harbaugh's first choice is likely Oakland with Michigan the fallback option.
The thing I don't understand is, if SF refuses to release him to another NFL team, thus trying to force him to college and Michigan, why couldn't Harbaugh just threaten to honor his contract and say he'll work next season in SF? Every party involved does not want that to happen. He could essentially force the Niners hand.
In other words, there are a lot of moving parts here. If I was betting, I'd still bet that he ends up in Oakland though.