The licensed real estate professional and former State Board of Education member breaks down credit scores, hidden costs, and building generational wealth through strategic home buying
Tiffany D. Tilley is a licensed real estate professional with a decade of experience helping clients navigate the home buying process. An author, advocate, and former Michigan State Board of Education member, Tilley holds an MBA from the University of Detroit Mercy and has received leadership training across multiple countries.
Beyond her real estate work, she is the author of the Know Thyself book series and has secured approximately $20 million in resources for Southeastern Michigan communities. Here, she shares essential guidance for first-time homebuyers, from understanding timelines to building equity.
Tell us about your background and what qualifies you to give professional advice
I am a licensed real estate professional. I’ve been licensed for a decade now. I have an MBA from the University of Detroit Mercy, where I’ve studied here in Michigan, but I’ve also studied abroad in multiple countries. I love real estate. I grew up loving real estate, so I’ve had a passion for it since I was about 10 years old.
What should a first-time homebuyer timeline look like from the first meeting with a real estate professional to closing on a home
It just depends on where that first-time homebuyer is. Everybody’s different, and first-time homebuyers can be a little overwhelmed because buying a home is a huge responsibility. The first thing you want to do is contact a realtor. You want to have a professional realtor to represent you. I know people who try to do it on their own, and they end up calling me because they got themselves into a really bad deal, and you can lose a lot of money or lose that property.
You want to make sure you contact a professional realtor, and then you want that realtor, if you have not located a lender, to help you connect with the lender as well. Before you start going to look at homes, you could look at homes on the internet all day. You could look at Zillow, you could look at Realtor.com and different platforms, but before you go out with your realtor, you want to make sure that you get pre-approved with a mortgage lender.
That pre-approval will let you know where you are. For one, it lets you know that you are qualified and ready to purchase your home, but it also lets you know how much buying power you have. Can you go buy a $100,000 house, or can you go buy a $300,000 house? You won’t know until you’re pre-approved.
How can a real estate professional help buyers find a home that matches their concerns about communities, neighborhoods, school quality, budgets, and commute time
When you talk to your realtor, your realtor will ask you sets of questions. Make sure that you’re open and honest, that you do have concerns, that you do want to be in certain neighborhoods. I’ve had clients tell me that I want to be in the suburbs. I don’t care if I’m in a shack. I just want to be in the suburbs so that I can be in a good school district. Their main concern is school district, not house.
They know they need a home for their family, but they don’t care about the bells and whistles. They care about the school district. What your concerns are, what your priorities are, they’re very important, and your realtor needs to know that.
One of the things that you also want to look at is that you’re moving into a strong neighborhood. A strong neighborhood will help you to gain equity faster in your home. Equity is important because we want to wealth build. For us, our community, we don’t have enough conversations about wealth building and generational wealth building. A lot of that starts with your home. Your home that you choose is so important.
What credit score do buyers actually need, and how can they improve their credit before they start seriously looking at homes
You will want to check with your lender. Right now, the mortgage rates in Michigan are about 6%, and they’re going to vary from state to state. Your mortgage lender will let you know, and you want to shop your lenders because different lenders are going to have different rates and different qualifications.
One mortgage lender that you might talk with may go down as low as 580 for your credit score, where another lender will want you to be at 620. It is important to shop around and make sure that you’re finding a lender that can meet your needs.
Can you walk us through the first-time homebuyer programs that people should know about, whether federal, state, or local
There are different programs. A lot of that will come in with the mortgage company, depending on the mortgage company that you choose. Make sure you ask that question as well, because there are first-time homebuyer grants. There used to be very popular grants where they would give you money, and this would be you don’t have to pay it back. It would just be grants.
Now a lot of them are in the form of loans, so you can get a loan to help you with that down payment, and they will put that on the end of your mortgage. You still will have to pay it back when you sell your home, but that does give you a cushion up front, so you want to ask your lender about those.
What are the hidden costs of homeownership that most first-time buyers don’t budget for
Depending on what you qualify for will depend on your down payment, so that’s a cost that you need to be aware of. For instance, if you qualify for a FHA loan, your down payment could be 3, 3.5%. If you qualify for conventional, you can have a 5% down loan. You’ll also have closing costs, so you want to make sure that you are aware of closing costs. Even though the taxes have been paid on the home, because you’re buying it in the middle of the year or whatever time frame, you’re going to inherit some of those taxes. You want to make sure that you budget for that.
You want to make sure that you’re going through a title company. Your realtor will help you, if you don’t have a title company in mind, will help you find a good title company. They will make sure that there are no back taxes that you don’t know about, that there are no water bills that you don’t know about.
They’ll make sure that everything is handled and taken care of, and more importantly, they’ll make sure that there are no liens on the title of the home. You want to make sure that you go through a title company and that your home that you’re buying is clear and free. That is how a lot of people get into trouble.
A lot of people think that they can go around having one, and it’s like trying to diagnose yourself instead of going to the doctor. We can Google and we can look at our symptoms and everything, but the doctor is the one that’s going to do the real diagnosis, that has the equipment, that has the experience, and that’s going to give you the proper medication so that you can heal faster and adequately. We don’t want to take chances.
There’s opportunities as well for seller financing, and a lot of people are afraid of seller financing because they’ve heard of horrific stories. The thing is, with seller financing, you still need a realtor. You still need a good realtor who can walk you through everything and make sure that your deal is properly done so that you’re safe.
What’s your strategy for helping buyers win in this competitive market without overpaying
Right now, in Michigan, we’re in a seller’s market, and that means that the seller has more negotiating power right now. We’re also going into a winter market, so winter markets are slower. Don’t let that scare you out of the market, because it is slower, that gives you a little more room to negotiate with sellers, even though it’s a seller’s market. There are more sellers than there are buyers right now, so that still gives buyers opportunity.
The time for sellers is really spring and summer. That is when the market is hot. Not a lot of people want to move in the wintertime, especially up north, if you’re in a northern state. Those things are going to always affect the market. Those things are cyclical.
What happens if a buyer’s financial situation changes during that six to 18 months timeline while trying to get a house
If your situation changes, it’s okay. It’s going to take you a little more time. You’re going to want to continue to work on your credit. You want to find there are some organizations, companies that can help you work on your credit. You can also do research online. Make sure you are using different tools to keep up to date, look at Credit Karma. You want to make sure you know where you are with your credit.
You want to make sure that if there’s anything on your credit, you’re working to get those things off. Credit Karma is a great tool for that, but again, there are great organizations, companies that can help you with that too. Some of them are even low to no cost, so you want to do your research.
You also want to make sure you continue to save. Continue to save, continue to save, continue to save, and invest so that you can make sure that you have all of your down payment money, your closing costs, and any emergency money.
Beyond the transaction, is there any ongoing support or advice for clients after they close on their home
Making sure that you know that you’re prepared with your credit, that you’re prepared with your savings, that you understand your budget. Those are the best things that can help you plan. Continue even after you purchase your home, because one of the main things that people are afraid of are any big budget items that they might encounter.
Your furnace goes out, right? You need a new roof. You want to make sure that you have your home assessed before you buy it, but those things are still going to come sooner or later. You want to make sure that you’re setting money aside so that you can tackle those big budget items.
For your washer, your dryer, your refrigerator, different items in your home, your utility company actually has insurance plans. That’s a low budget way that you can help yourself, save some money, make those payments every month, $30, $35 every month, depending on the plan. They have different prices, but they’ll come out, and they’ll repair your appliances for you.
For people that are interested in reaching out to you with more questions or to get a home, how can they reach you
I’m on all of the social platforms, Tiffany Tilley. I’m also at [email protected].