Friday, May 1, 2020

To Buy or Not to Buy? A COVID-19 Take on Home Buying

A COVID-19 Take on Home Buying

Simple, everyday things have suddenly become a hundred times more difficult throughout all of this pandemic craziness. Buying food? Make sure you wear a mask, gloves, and stay at least six feet away from everyone else when you’re out in public. Work? Hope you have a good internet connection and the psychological fortitude to drown out distractions (I am amazed my husband gets anything done some days with the girls and me singing along to songs or doing silly dances!). Those are just the easy things too.

What about the hard stuff, like say, for example, buying a home? Yes, believe it or not, there are some people who are navigating an even crazier-than-usual housing market.

Before COVID-19 hit the world, things were looking up for homebuyers in the United States. Three out of four prospective buyers reported feeling optimistic about the market, with sellers feeling confident about selling a home in a market that isn’t oversaturated. However--and as you’ve undoubtedly noticed--things have changed, but not necessarily for the worse.

Of course optimism among buyers dipped considerably, however many prospective buyers also reported that the pandemic did little to affect their home-buying plans. Due to social distancing measures, uncertainty over the constantly-evolving market, and other reasons, some sellers are pulling their houses off the markets. 

No matter where you fall in the debate, it’s essential to keep a few things in mind if you are looking to buy or sell a home during these uncertain times. So I am sharing a few helpful suggestions from experts in the industry.

A COVID-19 Take on Home Buying
(Photo by Steven Ungermann on Unsplash)

Interest? No Problem--Almost

For a phrase that generally comes from bored people, ‘no interest’ takes on a delightful new meaning when it comes to adjusting mortgage rates. A silver lining in the recent, abrupt recession is the Federal Reserve’s decision to implement two, emergency interest rate cuts, bringing the national average rate to somewhere around 3.8%. That is an incredibly low rate! Another plus is the fact that this rate has remained steady throughout the outbreak, although it can be hard to determine what direction this rate will go once things start getting back to normal. However, there’s a bit of catch: many banks are now much more cautious with their housing loans, requiring lenders to have a credit score of over 700 and put down a 20% down payment on the house.

In terms of this, consider your priorities before making any hard and fast decisions. If you’re hoping to capitalize on a low, steady interest rate, consult with your bank about a fixed-rate mortgage, which could maximize the advantages of these interest rate cuts. However, if a 20% down payment is too steep to justify, then think about waiting until the pandemic subsides and pay attention to evolving mortgage lending policies at your local bank. You may also want to consider refinancing if this rate is substantially lower than your current one. There is a possibility you could save hundreds each month or pay off your mortgage faster! 

A COVID-19 Take on Home Buying

DIAY: Do It All Yourself

This aspect of buying and selling a home during a pandemic may be a bit of a deterrent to some, or completely daunting to others mainly because it requires much more work than usual. As many businesses have closed or changed their regular hours of operation as a result of the outbreak, you will find it difficult to get a hold of movers, cleaners, landscapers, electricians, and plumbers who can help clean your home up to marketable condition. This predicament gives you two options: wait until the pandemic is over to proceed or do as much of the work as you can. Again, give another thought to your priorities, as they will determine which direction you’ll take. If you have the time and ability, then doing it yourself may not be so bad and could save you some cash in the long run. 

Let’s Get Digital

Something else to consider: with the embrace of social distancing, digital communication will become the norm. Should you decide to go through with buying or selling a house, most showings and negotiations will be over the phone. Nearly everything will be shut down in bigger cities, and different states have different social distancing protocols, so if you’re anxious to move forward, check the CDC’s website for updates on your state.

Social distancing has not only shifted the means with which we communicate with each other but has also impacted the way we usually do things. “Drive-by” appraisals have gained traction recently, keeping in line with the new regulations and also giving prospective home buyers an idea of the area in which they might be living. Some argue that these appraisals aren’t as effective as standard ones, if for no other reason than the fact that you don’t get to tour the inside of the house. But visiting the neighborhood, or the immediate space beyond your home may be just as valuable. You can change parts of the home, but you can't change the location after all. 

Conducting most business via video chat doesn’t just have implications for necessary human contact, but logistics and formalities as well. For example, how does a notary work when you’re recommended to keep a 6 ft. radius of distance between you and everyone else? These are the little things you don’t even think about. Some services, like eOriginal, have been providing electronic signature technology service since 2018, and have become even more in-demand since the beginning of the pandemic.

It is an interesting time to be doing much of anything right now, but buying or selling a house may top the list. With so much turmoil surrounding the near future, it’s hard to say for sure whether doing either is a safe bet right now. Furthermore, most experts agree that it’s still too early to determine the long-term effects of this pandemic on the market, giving most people pause about making any concrete decisions. Despite a low supply and high demand, shifting federal regulations can change things at the snap of a finger. Fortunately, there are many websites dedicated to staying current with available homes in your area. Head over to Property Guru’s website today to check out their property for sale and get your moving process underway. And good luck! 

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