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The Quick Guide To First Time Home Ownership

There are few things more exciting than having your own. Your own car; your own money;  your own house. While it may be less true today than in past decades, home ownership is still one of the best ways to attain wealth in the United States. This extends to owning property in general, whether you’re living in it or renting it out. The housing crisis of the early 2000’s brings this into question. Keep in mind that the housing crisis where people lost their homes and triggered the great recession was a result of human greed. Remove that from the equation and home ownership is where most of the middle class derives a large percentage of its wealth. Another big slice of the pie comes from retirement savings. As a reminder, being wealthy is different from being rich. Wealth is what’s left after you pay what you owe.

Home Ownership By The Numbers

Unfortunately, the wealth statistics for black women is bleak. In 2007 the median wealth of single white male was $43,800, $41,500 for a single white woman, and $120 for a single black woman according to The Wealth Gap for Women of Color report published by Center for Global Policy Solutions. When it comes to home ownership, the statistics have not favored African Americans in general. During the housing boom between 2005-2007 the net worth of black first-time homebuyers decreased by $17k while that of white first-time home buyers increased by $24k. The subprime mortgage crisis accounts for some of that as it impacted Africans more so than whites. But homes in majorly black neighborhoods didn’t increase in value as much as those in majorly white neighborhoods. However, in 2015 single black women, and women in general, tended to buy homes at a higher rate than single black or white men. The twist is for millennials. Becuase millennials have more school debt, lower paying jobs, and higher unemployment than previous generations they are renting longer.

Tips For Buying Your First Home

So you’re ready to buy your first home? Whether you are single or married, what follows are simple tips to entering the world of home ownership. Buying a home can be intimidating. And it feels very different from renting. If something goes wrong, there is no landlord to call.

Determine your budget. Before you look at a house or location, review your finances. Decide what you can afford for a down payment and per month. Do not let a real estate agent tell you otherwise. This was the crux of the housing crisis. People buying homes they couldn’t afford. In many cases your mortgage payment will be less than what you pay in rent. But keep in mind there are other monthly expenses. You will also need to determine how much you can afford in utilities, for insurance and to set aside for unexpected repairs, maintenance, and upkeep. Check your credit score as well. If it’s below 675 you will likely have a very hard time getting a loan. These days providers want 700 or above. The rule of thumb is housing should be about 25-27% of your income.

Get organized. Make a list of wants, needs and nice-to-haves for your new home. Make your life easier by collecting all of the documentation you will need ahead of time. This is typically tax forms, pay stubs, previous addresses, and proof of income/employment.

Investigate multiple financing options. If you are relocating with a company, chances are they have established relationships with mortgage providers. Start there, but don’t be afraid to branch out on your own. While it’s super convenient to just go with their list, keep in mind the relationship is in your company’s best interest not necessarily yours. The plus of using this relationship is black people traditionally have had a harder time getting a mortgage at a good rate. In this case, the company is essentially vouching for you. Researching multiple financing options will ensure you get the best interest rate possible. The only watch out is every time someone checks your credit report it counts against you and may potentially lower your score. Luckily, many mortgage providers will forgive the momentary dip since they are the cause. Once you make a decision, or at least narrow down to two or three options, ask for a pre-approval letter. Many agents and home sellers won’t even work with you unless they know you can get a loan. You can also wait to get a pre-approval letter until you find a home you want to make an offer on and include it as part of the offer.

The location is everything. Whether you are moving to another city or state for work or staying in your city but opting for a home, research your areas of interest thoroughly. You want to buy in an area that is projected to increase in value. You want to be sure that the area is  not too far from or too close to its peak value. If you have school-aged children being near good schools is of paramount importance. Appreciation is the reason why home ownership is a big part of wealth-building. A home that doesn’t increase in value will leave you net zero when you go to sell it, or worse, net negative.

Pick somewhere you can live and grow. Once you have narrowed down several possible locations, begin to filter your list. You want to live somewhere that supports your lifestyle. If you’re a city person and like to walk to places don’t live in the middle of nowhere. Do you have a growing family? Find a place with green space and children the same age. Have dogs? Be sure to live in a dog-friendly environment.

Thoroughly research the home and neighborhood. Of course have the home inspected but don’t rely solely on that report. Visit the neighborhood at different times of day to get a sense of the activity. Visit the home a couple of times before making an offer. Do a search on the address and surrounding area to see if anything of note happened there. Sellers don’t always disclose what they should. My neighborhood was completely flooded in 2010, yet the seller of the house next mine didn’t disclose that information. The new owner discovered black mold growing inside the walls. Do your due diligence.

Best Practices For Single Black Women

Statistics say that as a black woman you are likely single and buying your first home. Despite the strides made by women, especially women of color, we are still treated differently when it comes to buying a home.

Choose the right real estate agent. I once didn’t go with a real estate because she spent so much time trying to determine if I was black during our first phone call. She was black, that was why I called in the first place. My concern was that she was going to pigeon hole me based on my race, even though we were both black women. She asked me about this before she asked me about what I was interested in seeing during my visit. Pick someone who sees you as a complete person versus a stereotype. You might miss the perfect house for you. When you’re a couple, people tend to be more open-minded because they have two people to please.

Be confident and informed but not crazy. Some folks may try to pull a fast one on you. Be well-researched and firm. Let your “no” be your no. If you appear squeamish or unsure sellers may back away from you. When I sold my first house I backed away from a single woman buyer. Not only was her offer ridiculously low, she wanted most of my furniture as part of the deal. But that wasn’t where she lost me. During the offer process her agent disclosed to mine that she was engaged and buying the house solo in advance of the wedding. First, she was overly confident. This was at the very beginning of the housing crisis and put way too much stock in the whole “buyer’s market” rhetoric. Second, her offer became offensive in asking for my furniture yet not including a separate monetary offer for it. As if she was doing me a favor. Third, she provided way too much information. Even if her offer had been legitimate I wouldn’t have wanted to risk the sale falling through because she broke up with her fiancee. The big question in my mind was, why are you buying solo if you’re getting married? Moral of the story, keep your personal business your personal business. It lost her a beautiful house in a great neighborhood that has since appreciated 75% in value since 2008. I knew nothing about the people who bought the house, other than they offered above ask and left my door open during one of their visits. Frankly, had this not been during the start of the housing crisis I would have kept the house and rented it out.

Be respectful. Keep in mind that people have put much care, time and resources into the home. They want to know it’s going to be in good hands. Flash back to the people who bought my home. They requested way too many visits (about five) and after they left the door to the garage open (as in ajar) I called my agent to say they were no longer welcome until their final walkthrough. My dog ended up in the garage and when I opened the garage door guess who came running out. Moral of the story, it’s not your home yet, behave as the guest you are.

Negotiate. Women tend to negotiate way less than men in general. Because of this many sellers/agents will expect that you won’t negotiate. Everything about buying a house is negotiable. If you chose your real estate agent wisely, they will make sure you negotiate. Unless the agent is also the seller’s agent. That gets sticky. Negotiate the price of the home, repairs, etc. This is a substantial purchase, make sure every aspect works for you.

Be prepared for inevitable stereotyping. Just be mentally and emotionally prepared to fend off stereotypes. You are not required to disclose your marital status or if you have children to the seller/agent. It’s good information for your agent to have, but be sure you request they hold all information in confidence. Have a witty response ready and keep it moving.

Enjoy the process. Home ownership can be awesome. And if you follow these tips and best practices you will end up with a home you absolutely love. As Oprah says, your home should rise up to meet you. If you found this post helpful, and we hope you did, share with your friends, families and followers.  Follow us on TwitterFacebook, and Pinterest. We know you’re looking for more great content like this. Drop us your email and we’ll make sure you continue to receive original and informative content for health and wealth creation for divine black women.

Nile Harris
Nile Harris, the Chief Chick, is a word weaver and dream believer with 2o years of experience in healthcare and finance. This aspiring motivational speaker, TED presenter and LinkedIn Influencer is committed to valuing people, driving healthcare access and innovation, and weaving words that move people to action. Her views are her own.
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