REED CITY — The real estate market is always changing, but whether it’s in favor of buyers or sellers, future homeowners can never be too prepared to start their search. To help their community members become better home buyers, Crossroads Realty of Michigan is hosting a home buying and mortgage workshop at the Reed City Area Chamber of Commerce on Saturday, Feb. 26, at 1 p.m.
During the workshop’s two-hour duration, several realtors and a local lender will go over the home buying process and inform attendees on what should be prepared ahead of time in terms of documentation. They’ll also share the variety of available loan options, breaking down the requirements for each one.
“Most people don’t know what’s required, why we need them, and when we need them,” said Crossroads Realty Owner and Broker Gary B. Bailey Sr. “We’ve partnered with a lender to go over that and hopefully help them and people that have issues with credit and things like that.”
For people who have less than perfect credit, Bailey said the workshop will also include some tips on how to boost their score, so if they aren’t in the position to start the buying process now, they could still do so down the road.
First time buyers are brand new to the process and in need of guidance, but Bailey said the workshop is really for anyone. People often search for a home before they start looking for a loan, which he said is “putting the cart before the horse.” Knowing which program a client qualifies for is how brokers match them with a certain type of home, making loan application an important first step.
“You know, FHA and conventional will do pretty much any home, but a rural development loan, that has to have either a stick build or modular home, and they have to have certain conditions met as far as the quality of the homes,” Bailey said. “So we need to know those things up front. Not just because we want to know your business, but it’s to help us do our job.”
For the moment, the northern Michigan real estate market is facing a shortage of inventory, and it’s much more profitable for sellers. Crossroads Realty is part of the West Central Association of Realtors, which is a part of an even larger conglomerate made up of 12 different associations. On average, these groups see about 6,000 listings at a time, but Bailey said there’s currently only 2,000 listings.
When the market has shifted in this way, he said buyers need to be prepared with their offer to have a chance at locking down a home.
“If you don’t know what you’re doing, and you’re not qualified, and you’re not ready to do what you need to do, you’re probably not going to get that house,” Bailey said. “And that’s an awful feeling.”
After discussing the process of securing a home, Bailey said they’ll be changing gears to talk about mortgage management. Acceptable debt to income ratio changes based on the client’s loan, but he said in any case, it can’t be more than 42%. Making other large purchases during the same they’re buying a home can lower their chances of being able to obtain and manage a mortgage.
“We’re trying to educate them to understand that when we tell them these things, we’re not trying to be mean,” Bailey said. “We’re not telling them ‘hey, you can’t buy higher.’ We’re just telling you that at this point in time, because that will throw your debt to income ratio out of whack.”
Saturday’s workshop is the first to be hosted by Crossroads Realty. Bailey said other groups have done them in the past, but they’re hoping to make theirs stand out by including a variety of experts. One lender they’ve paired up with has an on-staff credit assessor who will be able to help attendees see exactly where they’re at with their credit and what loans they could possibly apply for.
Although this week’s topic is loans, each future workshop will focus on a different aspect of homeownership.
“We’re not just going to focus just on lending, either,” he said. “We’re going to try to do some of these with the inspection process and all the other avenues that they have to follow to get a home.”
With the market the way it is, Bailey said other real estate groups are focused on gathering listings and putting together deals, but his intention is to educate people on the cusp of ownership.
“They can be a homeowner too, because rents are so crazy,” he said. “I mean, you go get a two-bedroom house or three-bedroom house, and you’re paying 14, $1,500 a month where you can actually buy a home, and hopefully it’ll help some of that.”
Event details for the home buying and mortgage workshop can be found on the workshop Facebook page.