‘Have a Plan B’: Realtors of color offer advice on how to navigate the homebuying process

The path to homeownership is different for everyone. But it can be more challenging when you’re the first in your family to buy a house, if you make minimum wage or if you have a felony conviction. Plus, obstacles in the housing market can be unpredictable.

Sahan Journal spoke to three real estate agents of color about common questions and challenges in the homebuying process: Adriana Martinez, president of the Twin Cities chapter of the National Association of Hispanic Real Estate Professionals; Tre Adams, a managing partner of the Signature Group, a Minneapolis-based agency dedicated to helping families build generational wealth through real estate; and Nalee Vue, whose agency Superb in the Urbs is dedicated to closing the racial homeownership gap in the state.

The interview was edited for length and clarity.

What are the biggest lessons your clients learned last year?

Vue: Last year, the interest rates changed so much. A lot of Hmong homebuyers were not prepared for that. I saw a lot of homebuyers regret not putting in an offer when it was affordable. The greatest lesson was to buy when the rates are affordable and they can still afford it, instead of waiting for the housing market to go down or crash.

Martinez: We know normal interest rates are about 7 to 8 percent. However, during the pandemic, the rates were really, really low. Many of my clients were expecting to see lower interest rates last year. But as Realtors, we don’t foresee the interest rates this year being severely low.

What trends do you anticipate this year?

Vue: We have about two months worth of [housing] inventory right now in the Twin Cities. As the inventory increases there will be more options, but there also eventually will be more buyers coming back into the market. Therefore, they may be facing multiple offers.

What are common misconceptions about homebuying among communities of color?

Vue: “If I’m self-employed, then I can’t buy a house.” Well, if they have two years’ worth of tax returns for their business, it’s possible to buy a house. The second misconception: “I’m on Social Security, I don’t know if I can buy a house.” This person can co-borrow with a family member who is working to actually increase the income to buy a house. Three, “I don’t have enough cash to buy a house. I have to put down 10 to 20 percent.” That’s a major misconception that holds many people back from building generational wealth.

What are the unique needs of first-time homebuyers?

Adams: A lot of the stuff that we teach, these clients were not taught growing up. Their parents weren’t taught how to buy houses, and their parents weren’t taught how to buy houses. It’s the generational curses that people face, especially with Black people.

Martinez: Certainly it’s more challenging. Inventory is low. But it’s not impossible if you follow all of the guidelines from your lender that has approved your loan. Your realtor should also be there to guide you.

Adams: We just have a realistic conversation with our clients and get them to understand that ... this first house is just a stepping stone. More than likely, it’s not going to be your forever home. And I always explain my experience when I bought my first house at 29 in 2014 and what that has done for me. ... The prices of houses [go] up.

What kinds of compromises should buyers be open to when deciding whether to buy a home?

Vue: Multigenerational families, especially in the Hmong community, the main things they’re looking for is affordability, location, size of the house and land because they want enough parking for cultural events. They also want to know if someone has passed in the house because of traditional beliefs. It’s also important that there’s a bedroom on the first floor for the grandparents.

Martinez: I advise my clients to see what is most important for them and see if they can really live in that house. If they cannot really live in that house, because they really don’t like the house, then we just move on and go and see the next one. But I recommend my clients to be open minded because the budget is limited.

Martinez: It’s important that the client has regular income that can be verified by a lender. If you can, start looking at houses online and thinking about the kinds of houses you like. Also, start saving for a down payment. Talk to your lender who can help guide you on financial planning and figuring out the best loan.

Vue: I definitely recommend consulting with a lender and Realtor first. A Realtor helps give you a roadmap on how you’re going to buy a home and connects you to resources. A lender looks into your credit and helps you find what’s helping and hurting your credit. Also, a lender can help you know what’s realistically affordable. When a client knows all these things, they’re better prepared and equipped to understand their debt, how much to save and to afford monthly payments.

About the partnership

This story comes to you from Sahan Journal, a nonprofit newsroom dedicated to covering Minnesota’s immigrants and communities of color. Sign up for a free newsletter to receive Sahan’s stories in your inbox.