Market analysts expect home sales to fall by 35% for 2020. This would mean that the total home sales for the year would be around 4 million, a number that hasn’t been this low since 1991. These may sound like bad things, but as a buyer, this makes it a market prime for you to make a purchase.
Buying a home in today’s climate means that you can creatively take advantage of a less competitive market. With fewer buyers, you have more negotiating power.
Read this guide and learn what to expect when buying a home during COVID-19.
Understand and Prepare for COVID-19 Changes
With COVID-19 changing the way Americans live their lives, you should expect it to change the way we buy and sell real estate. As we face an uncertain future, fewer homes are getting listed, and mortgage rates have been slashed.
Historically, these factors have created the perfect environment for a competitive spring housing market. But the spread of COVID-19 has made everything a bit unpredictable. The impact you’ll experience will significantly depend on the housing market that you’re buying in.
Expect to have more of the process be done virtually. This will include everything from the walkthrough to the signing of documents. To follow shelter at home and social distancing guidelines, realtors are doing more and more online.
Several major cities across the country are seeing a drop in available homes, interested buyers, and home prices. It’s a home buyers market, and you have an unusual amount of leverage for a springtime real estate market.
Start the Process Early
Both first-time homebuyers and experienced homeowners need to start the process early. Check your credit score and credit report. Fix any mistakes and work to improve your credit. You’ll also want to pay off any current loans or credit card debt.
This is important so that you can secure a home loan with the current historically low-interest rates. It will also help you get approved for a higher loan and lower monthly payments. This can help you have more room in your budget for ownership costs like maintenance, repairs, and homeowners insurance.
It can also help to get preapproved by your lender. You can do this by determining an affordable mortgage payment and down payment. Then apply for pre-approval and get a preapproval letter outlining how much you can expect to be able to borrow.
This will make the home buying process go smoother because you won’t have to wait for loan approval after finding your dream home and making an offer.
Get the Right Real Estate Agent
While you can buy a home without an agent, in a COVID-19 world, this will be extremely difficult. An agent can act as the go-between for you and the seller. This makes it significantly more important that you choose the right agent.
You should start looking for someone who has experience in the local real estate market. They should also be able to listen to your needs and deliver home options that are at the right purchase price and meet your family’s needs.
Look for an agent that will advocate for your best interests. This could mean making sure a thorough home inspection is done. Or it could be asking the seller to pay property taxes and closing costs.
Look for a real estate agent that takes the necessary precautions to ensure the seller, themselves, and you all stay safe. This could mean doing things virtually or maintaining proper social distancing. An agent that cares about you and your best interests won’t do anything that can make you uncomfortable or be potentially dangerous.
Video and Virtual Tours
Gone are the days of open house hopping on a Sunday. This day used to be prime real estate hunting time. With COVID-19 in full swing, physical open houses are a thing of the past.
Now, if you want to see a home, you’ll need to do a virtual tour. Real estate agents are offering both live and static video tours of available homes. This lets you virtually walk through the home.
You may also be able to tour a vacant home in person, but ask the agent to stay six feet away from you. Then another option is for the agent to be present but remain in their car. They can sanitize and unlock the door for you.
You can begin a Facetime or Zoom video call with them, and the agent will guide you through the home by video conference.
Depending on the state you live in, there could be requirements that cause a delay in your home purchase. For example, Massachusetts requires all sellers to obtain a smoke detector certificate. That requirement has been deferred during COVID-19 under certain circumstances.
You should also expect to see a COVID-19 addendum added to your contract. These special terms will allow for the extension of the close of escrow date if any of the following are true.
- Lack of inspectors or appraisers
- A party’s inability to travel to sign documents
- A party is subject to a mandatory quarantine
- Closings of or delays in related government and business services
- A party’s loss of income due to COVID-19 circumstances and the return of the earnest money deposit
Prepare for Your New Home Purchase
Buying a home during COVID-19 may seem like a nerve-wracking experience. But it doesn’t have to be. With a little preparation and adjustment, you can successfully navigate the new process and enjoy homeownership.
Remember to have some patience, expect delays, and prepare for altered processes.
We can help you take the stress out of buying a home by helping you find the right lender for your home purchase.