After touring about 30 homes and submitting a bunch of offers, Sterling Heights resident Michael Mazur was prepared for another rejection.
Instead, the call he received from his agent brought news he had been waiting months to hear: His offer had been accepted.
Mazur was standing next to his mother when the call came. Expecting another disappointment, he put the conversation on speakerphone. Before his agent could even finish delivering the news, his mother was already jumping up and down with excitement.
“It was one of those days where the stars aligned,” said Mazur, who recently purchased his first home in Sterling Heights.
For many Americans, homeownership remains a major life goal. But in today’s housing market, first-time buyers face higher mortgage rates, rising home prices and fierce competition for desirable homes.
June is National Homeownership Month, an annual observance that highlights the benefits of homeownership and encourages prospective buyers to learn more about the purchasing process. According to the National Association of Realtors, the month also raises awareness about making homeownership more attainable and its role in helping families build long-term wealth and stability.
Jeanette Schneider, president of RE/MAX of Southeastern Michigan, said many first-time buyers are intimidated by the financial commitment of purchasing a home.
“There’s a lot of emotion that goes into making this purchase,” Schneider said. “The fear of the financial commitment, the concern about whether you have enough money to do this, we’ve all been there.”
One of the biggest misconceptions Schneider encounters is the belief that buyers need a 20% down payment.
While that may have been common decades ago, today’s buyers often have more options. Schneider said many loan programs allow qualified buyers to purchase a home with as little as 3% to 5% down, while state and federal assistance programs may provide additional help.
In Michigan, programs offered through the Michigan State Housing Development Authority can provide down-payment assistance to qualifying buyers.
Before beginning a home search, Schneider recommends that prospective buyers understand their finances, including their credit score, debt obligations and monthly budget.
Most lenders prefer housing costs, including mortgage payments, taxes and insurance to remain around 28% of a buyer’s income.
“The higher your credit score, the better terms you’re generally going to receive,” Schneider said. “You may find spending six months improving your credit score could do more for you financially than trying to save additional money for a down payment during that same period.”
For Mazur, the road to homeownership took years.
After law school, Mazur focused on paying off student debt while building his career. During the COVID-19 pandemic, he moved back in with his parents in Sterling Heights to accelerate the process.
Once his debt was eliminated, he began saving for a home.
“With interest rates being what they are and the state of the world being what it is, there was a lot of doubt,” Mazur said. “It’s a big financial commitment.”
Still, he knew homeownership was important to him.
“It’s one of those rites of passage,” he said. “Go to school, get a good job, eventually get a place of your own and make it something you want.”
For Mazur, the effort was worth it.
Although he has not yet moved into the home because the sellers are completing their relocation, he is already looking forward to hosting family gatherings and spending time with his young niece at his new home that’s just a few streets away from where he grew up.
A lot more room and less than rent
Mazur’s experience isn’t unique.
Marlon Phillips, 36, recently purchased his first home in Detroit’s Morningside neighborhood after years of renting.
“I’ve always wanted a home in Detroit,” Phillips said. “I’ve been living here for about 12 years and it was time to commit to being in the city long term.”
Phillips said rising rents helped motivate his decision.
“With the way rent prices are now, if you find a reasonable home, you’re paying less than rent with a lot more space,” he said. “It’s about time I grew into something a bit bigger and gave myself a yard so I can do some gardening and things like that.”
His search wasn’t without setbacks. Last year, Phillips had an offer accepted on another home, only to discover significant issues during the inspection, including leaks in the roof and basement. He ultimately walked away from the purchase and resumed his search.
This spring, with the help of Realtor Bud Kawa of Match Realty, Phillips found a three-bedroom home that checked nearly every box on his list.
The home offered many of the features Phillips had been searching for, including a remodeled kitchen and bathroom, hardwood floors and neighborhood character that felt like a good fit.
The first thing Phillips did after getting the keys was pull up a section of carpet upstairs to see whether hardwood flooring was hidden underneath.
“It was there,” he said with a laugh. “It needs some work, but it’s there.”
For Phillips, homeownership represents more than simply having a place to live.
“It’s nice knowing what you’re in for,” he said. “The decisions that are made on your house are your decisions.”
He also hopes his experience encourages others who may think buying a home is beyond their reach.
“Everybody says you need 20% down and tens of thousands of dollars saved,” Phillips said. “But you don’t necessarily need that. There are opportunities out there if you talk to the right people and learn what’s available.”
A 3-month search and an open mind
Working with Real Estate One Associate Broker and Branch Manager Rich Rubba, Mazur spent about three months searching for a home. Unlike many buyers who focus on one specific style, Rubba said Mazur remained flexible.
“Michael was willing to look at and consider all home styles,” Rubba said. “He wasn’t set on a ranch or colonial. He was open to looking at tri-levels and quad-levels as well.”
That flexibility proved valuable in a competitive market, where Mazur submitted multiple offers before finally securing a home.
To strengthen Mazur’s successful offer, Rubba helped structure terms that appealed to the sellers, including favorable occupancy arrangements after closing.
“We used some strategies when crafting the terms of the offer,” Rubba said. “We tightened the time frames for inspections, mortgage approval and closing, and we also gave the sellers favorable occupancy terms after closing.”
The arrangement worked well because the sellers needed additional time before relocating out of the country.
About down payments and mortgage rates
The experience reinforced another lesson Rubba often shares with first-time buyers.
“There is a common misconception among buyers that they need 20% of the purchase price saved for a down payment,” he said. “In Michael’s case, he was approved for a conventional mortgage with only 5% down.”
Mazur’s experience reinforces one of the key messages Schneider hopes prospective buyers understand: Homeownership may be more attainable than they realize.
Schneider said buyers should not allow current mortgage rates to discourage them if they are financially prepared.
“If you’ve saved the money and can comfortably afford the payment, don’t wait for rates to come down,” she said. “Home values continue to rise, and at some point, if rates improve, you can refinance.”
Other costs to keep in mind
She also encourages buyers to remember that the costs of homeownership extend beyond the mortgage payment. Property taxes, homeowners insurance, maintenance and repairs should all be factored into a long-term budget.
For first-time buyers, the most important step may simply be seeking guidance from professionals early in the process.
“I try to let buyers know what to expect every step of the way,” Bud Kawa of Match Realty said. “When people know what’s coming next, it makes the process a lot less intimidating. We can save them a lot of time and provide useful, accurate information so they can make an informed decision.”
For Phillips, homeownership represents freedom and stability.
“The decisions that are made on your house are your decisions,” he said.
For Mazur, the journey was worth every setback.
“Buying a house was one of the happiest days of my 30s,” he said.
Brendel Clark writes about real estate and other topics for the Detroit Free Press. Contact her at bclark@freepress.com.
This article originally appeared on Detroit Free Press: What first-time buyers need to know before purchasing a home
Reporting by Brendel Clark , Detroit Free Press / Detroit Free Press
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By Brendel Clark , Detroit Free Press | USA TODAY Network
