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COVID 19- Buying a Home

Is it possible to buy a home right now?

There are several things you can do right now to keep your home search moving forward.

In our area people are practicing social distancing and following public health orders to stay at home and self-quarantine. While each day brings new and challenging situations, our number one priority is to keep our clients, our community and our team safe. We are constantly looking for ways to adapt and serve safely.

Real estate is an essential business. While our offices are temporarily closed to the public, we are supported with a wide range of technology tools so that we are able to continue to serve you.

 

Can I tour a house without leaving my home?

We have gotten creative in adopting tools and technology that allow prospective buyers to tour homes virtually. Where a seller is unable to let anyone into their home due to COVID-19-related health concerns or restrictions, we are finding solution by working with the seller and listing agent. We have experience working with remote/ relocating clients and are used to accommodating requests for a video tour.

Here are ways we can help you get a better sense of a property that interests you:

  • 3D Tours:  Some homes have 3D home tours / or Matterport tours. We can send you these and Zillow actually has a “3D Home” label in the upper-left corner of listing photos on listings.
  • Live video walkthroughs: We can help facilitate a live tour of a home through FaceTime, or similar platforms. This is easier with currently vacant homes.
  • Pre-recorded video tours: We can plan to do a pre-recorded video tour of the home and then share it with you. Make sure you tell us exactly what you’re looking for in a home so that we know what details to focus on during the tour. We can also capture some of the surrounding neighborhood as well to give you a better sense of the area. Again, this is easier with currently vacant homes.

Am I missing out if I don’t buy now?

The best time to buy depends on your personal circumstances. Trying to time the market for the best deal is something even professional investors haven’t figured out!

According to economists, the current environment poses both opportunities and challenges.

Opportunities are out there: 

  • Mortgage interest rates are very low, which has the potential to significantly boost your buying power.
  • At this exact moment, with many people pulling back and staying home, there could be less competition for the still-limited pool of homes for sale.
  • Sellers may be more flexible on pricing and/or timing in order to close a sale, especially if letting their home stay on the market will cost them or delay their own plans.

Still, the challenges can be daunting:

  • Inventory is already low and with many would-be sellers holding off on listing their homes right now – that could make it harder to find the right home.
  • Mortgage interest rates are low, but volatile, and lenders have been slammed with a flood of refinance applications.
  • It may be difficult to complete the sale on time if connected businesses (appraisals, inspections title services) are closed due to the pandemic.
  • If the crisis persists and social-distancing and other behaviors last through the bulk of the year, home prices may fall somewhat in response to the lack of demand from buyers. It could make sense for some buyers to adopt a “wait to see” approach.

Should I be Investing?

Some areas are seeing the drop off in competition for real estate investment opportunities as a golden opportunity to lock down a deal. This might be the perfect storm for investors: competition has slowed down, sellers are nervous, interest rates are low and opportunities could be increasing.

If you have the time and willingness to face the current challenges, now could present some interesting opportunities. If you’re risk-averse or don’t feel ready, you’re likely to be more comfortable waiting until the situation is more clear. We are re-evaluating challenges and opportunities for our clients daily, as the situation unfolds.

 What can I do now to be ready to buy?

Buying a home right now might be challenging, however there are steps you can take so you are ready to act when the time feels right for you.

1. Find your price range

A home is more than just a place to live — it is also an investment and a major financial commitment. So, before you buy, make sure that you know exactly how much you can afford. It’s imperative to take a close look at your finances and establish your housing budget before you start looking for homes. In fact, you shouldn’t even apply for pre-approval until you have a solid understanding of home affordability. Otherwise, you may be tempted to borrow as much as the bank will allow, putting a strain on your finances for decades to come.

  • This guide from lendedu.com will help you ensure you’re making smart choices when it comes to the size of your mortgage loan: https://lendedu.com/blog/how-much-house-can-i-afford/
  • Zillow’s Affordability Calculator (https://www.zillow.com/mortgage-calculator/house-affordability/) can also help you determine what you can realistically afford.

 2. Keep saving

If possible, continue setting money aside for your down payment. The amount can vary from as much as 20% of the purchase price with conventional loans or as low as 3% if you qualify for an FHA or VA loan. Keep in mind you will need funds to cover closing costs, moving and other expenses.

 3. Monitor your credit

Your credit score can impact the interest rate you qualify for. You can request a free copy of your credit report from any of the three major credit reporting agencies. Review it carefully and check for discrepancies. Work on improving your score (by paying down credit card debt, for example), and avoid taking out large loans during this time.

4. Gather info 

Look at homes online using our website search tool, or have us set up a customized search for you to see what’s available in your price range. Think about your must-haves and nice-to-haves so you can focus your search when you’re ready to take the next step. This is also a good time to build your real estate team who can provide helpful neighborhood and market information. Look up and vet attorneys, inspectors, etc…

 5. Identify Needed Documents

A pre-approval letter is usually valid for 60 to 90 days. It is a good time to gather the documents you’ll need to get pre-approved or apply for your mortgage. These include: tax returns, W2s, pay stubs and bank statements. Lenders may also want to see “proof of funds” of your down payment.