We spoke with Mary Leo, executive director at PathStone, who has more than 10 years of experience in Housing and Urban Development (HUD) certified home counseling. Mary gives us her perspective on how COVID-19 has impacted first-time homebuyers from a housing counselor perspective.
What is the role of a housing counselor in the homebuying process?
PathStone is a large human services organization that has been around for 50 years and is headquartered in Rochester—we’re in seven states and Puerto Rico. We divide our services into two main arms: housing services and direct services. Under housing services is where my position/role falls. I oversee all of our housing counseling activity and resources, with the largest being Housing and Urban Development. We are a HUD certified housing counseling agency, so we meet with people individually and in workshop settings to discuss their housing needs and goals. One of our most popular programs is the first-time homebuyer program. Prospective buyers come to us for guidance and education.
Prospective homebuyers often seek us out, as we’re sometimes able to offer grants and down payment assistance. We also provide counseling and information about budget, credit, best practices when shopping for your first home, and how to work with Realtors and attorneys.
PathStone services are free and available for those looking for support navigating this process. We’re here to give non-biased information and education—we’ll go over your budget and talk about affordability. We help quarterback the situation for first-time homebuyers by getting everybody on the same page with their Realtor and their financial institution, and leading everyone through the timeline of when things need to happen. We want to make sure everybody is aware of what needs to happen so you can have every advantage getting into your first home.
As housing counselors, we’re not financially motivated by someone buying a home. Our staff just wants our clients to understand the process, have access to all possible resources and options, and be educated consumers when they’re navigating this process. That being said, we do want people to be aware of some of the possible risks or considerations if they’re going to keep their housing search going during this time, participate in virtual showings, and move forward despite some of the barriers the shutdown poses.
Since COVID-19 hit, how have things changed? What common questions or feedback are you receiving from first-time homebuyers about the process?
First-time homebuyers are still as eager and excited as they’ve ever been. Spring is always our busiest time of year, and we anticipated that the pandemic and corresponding shutdown would affect people’s excitement, but it didn’t slow anybody down. Our first-time homebuyers are feeling the same level of pressure as our first-time homebuyers did last year, as inventory remains low in our area. Rochester is still a very hot market and all the normal obstacles first-time homebuyers were facing were just kind of compounded with some of the limitations the shutdown and pandemic posed. There were some new hurdles around showings and delays in closings as Realtors and attorneys were getting up to speed on what they could and couldn’t do to keep people safe. But excitement and desire to close were not affected. Our audience is still very engaged and eager to get involved in our program.
What counsel does your team provide throughout the critical stages of the homebuying process? (e.g., preparing, searching, financing, and closing)
The first thing we want people to know is that we’re still here and operating. If you’re looking to go over your budget, people are looking at a different set of finances now than they were pre-COVID. Therefore, we want to touch base to make sure your budget is still aligned with your goals. If you’ve had to make some changes to your budget or take on new debts, we can help review your credit and make sure you’re doing all of the right things that are going to put you in the best position possible to be competitive in this market. If you’re out shopping and are ready to make an offer, there are a few key things we’re advising folks to consider for virtual showings.
If you go through a virtual showing and decide to make an offer, you can add a contingency that includes a physical viewing within 48 hours of the offer being accepted. It’s still important for homebuyers to physically see and tour a home, even if you have to socially distance or take extra safety precautions. This is a very important step, especially for first-time homebuyers—you need to know what you’re getting and have an idea of what the physical needs of your home are. For buyers who are taking the time to make the biggest financial decision of their life, you should definitely get as much information as possible and always get a home inspection.
Given the current state of the market, what other advice or counsel are you providing to clients at this time?
What we always tell buyers, especially during this time, is that it’s OK to be patient, as it’s an extremely emotional process. For many people, it’s a life-defining goal to become a homeowner and can be a beautiful and exciting time. But there’s a lot on the line and you want to make sure you do it right.
It’s OK if you feel like you’ve seen 50 houses and have been outbid many times, and it’s OK to take a timeout or wait it out a couple of weeks and realign—it’s never going to hurt you to develop more savings or pay down debt a little bit further, as it will make you more competitive. In reality, nobody has a crystal ball to say what the outlook of our economy and real estate market is going to be. We’re still at a height of low inventory and high-priced homes. If you’re at all concerned about the outlook of your income or you’re unsure what your near-term future holds, it’s a good time to take a break, reassess and investigate all options.
Also, many times we find that first-time homebuyers get connected with the first lender, bank or broker that they meet without obtaining a full picture of all their mortgage options. That’s what our team is here to do. If the road you’ve been going down doesn’t seem to be working and you keep hitting roadblocks, maybe it’s time to meet with somebody who can roll out a couple of different options you haven’t investigated yet, provide you with alternatives, and help you get back out there when you have more tools in your toolkit.
Do you provide resources and options for different financial lenders and Realtors?
Yes, we do. HUD requires us to make referrals, and at our agency, we have a long list of referral options. We’re constantly communicating with banks and Realtors to stay up to date on what’s new and available. It’s a full-time job to stay informed on what’s out there, and a first-time homebuyer is dealing with their own jobs, their own families, pressures of the market and more, so they don’t always have time to do all that research. We’re staying on top of what’s out there and will lay options out for you based on your situation so you know how to get started and who’s out there in the community for you to call.
What advantages are there to being a first-time homebuyer?
Listing agents are looking for the quickest, fastest close, and for first-time homebuyers, that’s not always to their advantage. However, there are advantages to being a first-time homebuyer.
A lot of times, you’re not trying to sell another property, so you don’t have to worry about being contingent on that. Also, when you’re working with a housing counselor through the process or have grants lined up, there’s a higher chance you know your financing is going to go through because you’ve been vetted so many times.
I believe sometimes listing agents overlook first-time homebuyers because they see them as being a complicated close, but really they’re strong offers because they have so many professionals helping guide them and ensure they have the financial support that can make the deals happen, even if it just takes a few days longer.
Are there any common pitfalls or mistakes first-time homebuyers should avoid throughout the process?
Many times, people are online shopping or even getting a Realtor before they have their ducks in a row. We advise that if you’re even possibly considering buying a house, start to look at your income and your finances and get right with your budget before you venture out into a competitive market where you feel pressure to be at a price point you later find out is not going to work for you. Get information about the homebuying process and determine your budget before you go out looking—people are getting outbid and you need to be firm on what’s going to work for you because you’ll be making this payment for the next 30 years. A split-second decision or in-the-moment pressure can linger as a lifelong stressor and we don’t want to see anyone in that position.
Realtors are giving good advice on how to be competitive in this environment, as well. Their job is to get you the house you say you want, but they’re not going to be there after closing to help fix things if you didn’t get a home inspection. Avoid getting caught up in the excitement and the competitiveness of the market —know where you are at financially, what you need and what you have to make an offer, and stay focused. Don’t feel unduly pressured into something you’re not ready for or completely comfortable with.
Don’t be afraid to ask too many questions or feel like you can’t “shop around” to get a couple different opinions. You don’t have to use the first Realtor you meet, and even if you have a family connection in the industry, don’t feel pressured to work with them. You also don’t have to use the bank you’re currently banking with. It’s a good idea to understand different mortgage options, as not every mortgage product is a one size fits all.
Also, depending on what you’re looking for, the type of mortgage you’re making an offer with can make a huge difference in your success. The bottom line is, if you feel like you’re only being offered one thing and you want to know more about what’s out there or what you can change about your financial profile to get access to other options, that’s what a HUD certified counselor does. We lay out all the possibilities and then you select what’s going to line up best with you and your family.
What other advice would you give to first-time homebuyers?
Have a team that you’re comfortable with, seek out help that’s available and be patient. This process can take a long time, so you want to make sure you do it right, and we’re here to be helpful along the way.
About Mary
Mary Leo, Executive Director, The Housing Council at PathStone
Mary Leo is the Executive Director of The Housing Council at PathStone, the largest HUD approved Housing Counseling agency in the Greater Rochester Area. Her organizations provides First-time Homebuyer services, Foreclosure Prevention services, Landlord and Tenant education, eviction prevention services as well as Reverse Mortgage Counseling, Leo joined The Housing Council in 2009 beginning her career as a counselor in foreclosure prevention and reverse mortgages. She has experience in foreclosure prevention, homeownership and financial education, program compliance, grant writing, and strategic planning. Leo is an engaged member of the United Way Emerging Leaders having chaired the Engagement Committee. She is also part of the Greater Rochester Chamber of Commerce Women’s Council and the Rochester Monroe Anti-Poverty Initiative’s public policy working group and housing sub-committee.
