For decades the American dream has been to own a home. For Black Americans, this dream is one that has often been out of reach. With more people of color entering the housing market each day, it is important to arm yourselves with information. A lot of complexities come with homeownership, and for Black Americans, there are additional complexities that non-POC do not have to consider. For many, starting the process of buying a home can be so overwhelming.
In fact, as much as 50% of Black Americans note that it is difficult to even find agents and sellers to take them seriously due to their skin color. With so many hurdles to contend with, it is not surprising that the rate of Black home ownership remains at an all-time low. If you are in the beginning stages of looking for a home, or if you are closer to making a purchase, we have 5 things you should keep in mind. Not only will our tips help you navigate the home ownership journey, but they will also help you to make better decisions that will have a positive effect on your future.
Find and Hire a Reliable Licensed Real Estate Agent
Real estate agents act on your behalf to help get in into the home of your dreams. Too many Black Americans forego an agent because of the perceived increase in cost. Additionally, a lot of non-POC realtors won’t have their interests at heart when taking them on as clients. Keep in mind that the buyer never pays the commission of the real-estate agent, the commission comes from the sale of the home. That means that the seller will be the one to pay both their agent AND your agent at closing. Many sellers will try to convince you to drop your agent and use theirs, but they won’t be protecting your interest. Take your time to find a local agent familiar with the area in which you want to purchase your home. Make every effort to find a POC agent or at least one who is an ally. A good agent will work to get you the best deal and the best home to meet your needs.
Consider The Home You Purchase With The Future In Mind
It is easy to look for a home that will meet your needs today. However, buying a home is a long-term investment that will stay with you well into the future. Consider what your family will look like 5 or 10 years down the line when consider which home you would like to buy. Do you plan to stay in your current position at work? Are you thinking about having children or expanding your family further? If you are older and purchasing a home, will the layout and location fit your needs as you age? Planning for the future when choosing a home will help you save money and ensure you get the most out of your home over the years.
Consider Demographics Carefully
As much as race should not come into play when buying a home, there is actually no way around it. Due to the way the housing market has been set up, POC and Black Americans will always get the short end of the stick. Think about the type of people in the area where you want to live. Are you looking for a mostly Black community or are you interested in a healthy mix? Home values also depend on the racial mixture in an area. It is important to keep in mind that properties in predominantly Black areas will appreciate much slower than those in all-white neighborhoods, regardless of affluence. While everyone wants to live in the home of their dreams, it can be hard to maintain a dream if the area is not as welcoming as you expect it to be. That is not to say that you should avoid certain places, but just know how far and how much you are willing to fight for what you want.
Pay Attention To Your Finances
New homeowners often make the mistake of choosing a home that is well outside of their budget. While you may be approved for a high loan amount, only you know what you can actually afford. Buying a home is an investment in your future. If you have to spend all of your time paying for your purchase, however, you won’t have any time to enjoy the fruits of your labor. Think about any existing debt you have, your plans for the next 5 years, and what you can comfortably afford without having to stress over the mortgage payment each month. Always plan for inflation or times to be tight when making your budget. That way, you will always be able to make your payments and enjoy your new home. As a general rule, your mortgage payment should never be more than a 3rd of your annual combined income in order to remain in the realm of affordability.
Master the Art of Contract Negotiation
Buying a home does involve contacts. A reliable real estate agent will help you navigate contracts and help you negotiate to your advantage. Regardless of how good they are, it is important that you maintain an active role as well. Many contracts involved in the purchase of a home are standard, but keep in mind that you always have room to negotiate. You can demand more time to review the home inspection report, ask for lead or radon testing, or even get your own appraisal. In many cases, you can even make your contract dependent upon your mortgage company approving your application for a specific loan amount.
Fulfilling The American Dream Through Home Ownership
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Image Sources:
https://www.blackenterprise.com/economy-does-not-boost-black-homeownership/
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https://policyinstitute.iu.edu/research-analysis/research-findings/black-homeownership.html
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https://www.zillow.com/research/black-homeownership-rate-2020-26526/
