The future of homeownership is Hispanic. This is not an exaggeration. More than half of home ownership growth in the U.S. over the past decade has come from the Latino population, and that trend is expected to continue.
A study by the Urban Institute forecasts Latino buyers will account for 70% of home ownership growth from 2020-2040. In fact, the Urban Institute suggests that Latinos will be the only ethnic or racial group that will experience a higher home ownership rate over the next couple of decades.
This presents an opportunity for real estate professionals. However, according to agents Sarah Thwaites and Rodolfo Trujillo, who specialize in serving Hispanic homebuyers, this segment of the buying population has different needs than other buyers.
Sarah, a top producing agent with Synergy Realty LLC in Dallas and a board member of her local chapter of the National Association of Hispanic Real Estate Professionals, describes working with first-time Hispanic homebuyers as “a completely different ballgame.”
Rodolfo, with RE/MAX Advantage Plus in Minneapolis, adds that you need to be prepared to invest a lot of time with first-time Hispanic buyers.
Since they often are the first in their family to purchase a home and for many English is their second language, they don’t approach the process like many other first-time buyers who begin their search online and contact an agent after receiving a mortgage pre-approval. Often Hispanic buyers reach out to an agent without knowing what their budget is and how much house they can afford.
Rodolfo says this means agents must be prepared to do a lot of hand-holding throughout the entire process, beginning with referring them to a loan officer to get pre-approved for a mortgage.
Both Sarah and Rodolfo say they typically begin with an in-person meeting where they explain the entire process, including what is needed, each step in their transaction and their responsibilities along the way.
Rodolfo’s team conducts first-time homebuyer seminars once a month to help inform potential buyers of the process and what’s needed.
Rising home prices and interest rates combined with limited housing inventory have all but assured that all buyers in today’s market will need to make compromises. It’s important to set expectations at the onset and determine upfront what your buyer is willing to compromise on and what they are not. Since family is extremely important to Hispanics, they may choose to prioritize living close to relatives over an additional bedroom or large backyard.
Like all first-time homebuyers, coming up with the down payment is often the biggest hurdle for Hispanic buyers, especially as prices and interest rates continue to increase.
Sarah says one of the best ways she can serve her clients is by staying current on grant and loan assistance down payment programs available to first-time buyers. There are more than 2,000 of these programs nationwide, many of which are administered by state, county, and city governments. Many programs require that you be a first-time home buyer, with a decent credit score and a low to moderate income. Banks also offer grants, which are funds that do not require repayments, that can be used to help reduce the upfront costs of buying a home. The amount of the grants and loans vary by state, but Sarah says a program in Dallas recently offered as much as $17,000.
Another challenge is that listing descriptions and transaction paperwork, such as contracts and appraisals, are often in English, which isn’t always a first language for many Hispanic families. Rodolfo says it helps to have an Hispanic speaking agent who can translate important information. Tools such as DO AudioTours™, which are recordable in any language allow a buyer to view a property’s listing photos while the agent provides a detailed description of the home.
Homeownership is the American dream, and that couldn’t be more true for families who immigrate from another country. For agents, knowing that you’ve played a role in helping someone find their dream home makes the effort that much more worthwhile.