Have you been wondering if you can still buy a home in this Corona Virus | Covid-19 environment?
Well the answer is yes. But you are right to wonder. Things are not the same. And they do keep changing.
Ok. I call my Realtor to see a home. What's Different?
Let's face facts. Physically looking at a home can put your health, the Realtor's health and Seller's health at risk. Anyone can be contagious but not showing symptoms.
The Realtor will request verbal or written Confirmation you are not sick and have not traveled recently.
So many seller's are requiring information confirming you are a serious buyer and are not contagious. This can include signing an affidavit stating you are not currently sick and haven't recently traveled. This could have potential legal and financial repercussions if you are sick and the seller gets sick. (Please note I am not an attorney and this is not legal advice).
A Definite Need to Look Now And Not A Couple Weeks For Now
If you are not looking to move in the next 30 - 90 days then you really shouldn't be looking in the current health crisis. And if you are 90 days out then you stil might consider waiting a couple weeks until looking at homes.
A Pre-Approval Letter vs. Pre-Qualification Letter
Home seller's have always wanted their buyer's pre-qualified. But now more are asking for a pre-approval. This means they want the lender to run your credit report and confirm the economic crisis caused by the covid-19 virus hasn't effected your income or employment. Lenders have tighten their standards. You need a higher credit score for the same programs. Don't waste your time and endanger your health without first be absolutely sure you can qualify to buy the home you like.
Alternatives to Physically looking at homes
If any of the above items give you pause then there are still ways to look at homes.
Online Home Shopping
Photos, Virtual Tours & Videos
Realtors are getting professional photos nowadays. So you can see the house in it's best light online. You also will find videos & virtual tours giving you a walk through through the home. The video & virtual tour will hit the highlight of the home but may not show you everything. You definitely won't get a view of each room from every angle.
3D Interactive Tour
So something else to check out are homes with 3D tours.(And if you are thinking of selling your home then you should make sure your Realtor does one for you). With a 3D Tour you can look at every room in a 360 degree setting. So you can see every perspective of each room. You also get a floorplan to move from room to room which helps you understand how the home flows. You are in control of how you view the home and can go back and forth between rooms.
What if you need more details still but don't want to visit the home?
Your Realtor can go the home and shoot a video for you. This will be not as flashy as the marketing material shot by the seller's agent. But you can make sure you see how big the closets are!
Still not good enough?
Then you Realtor can do a Facetime or Live Video Phone Call with you while walking through the home. So you can see the home and ask questions that might pop up. You can also direct your Realtor to give you different views, open cabinets, look inside closets, etc. Facetime is a native app on the iphone. Other ways to get this type of "live virtual tour" is through google hangouts, facebook manager, skype, zoom and gotomeeting.
If you are serious about buying and don't want to visit the home then you definitely want your Realtor to visit the home to pick up things that you can't tell from photos and tours:
- Does the home have a bad smell? ie cigarettes or pets
- Is there traffic or airport noise you didn't expect?
- Is there carpet stains, cracked tile, or ceiling stains that you don't see in the photos or videos?
- What does the neighborhood look like?
While I am not an inspector, I will point out anything that isn't readily obvious or that an inspector will have to look further into.
Please note due to liability the Realtor may not be able to answer questions which are subjective to the Realtor's opinion. But they can capture all sights and sounds in video.
How to Maximize Your Online Showings
- Watch the home tour (photos, videos, etc) on your big screen tv. Just stream it from your computer or phone.
- Watch via your wifi. Don't use data. This can make sure everything is quick and free of blips.
- Record the tour if possible
- Have a pad and paper ready to write down questions as you view the home to make sure you don't miss anything
Should you make an offer without visiting the home?
That is up to you. We have had many people do it. It just depends on your comfort level.
But what if I need to move, I am ready to buy and I want to physically look at homes?
We can do that too. As long as the seller is allowing physical showings. But here is how it is different:
- You will no longer be driven around by your Realtor. You will have to arrive in your own car and follow your Realtor from place to place. If you are from out of town then you will need to rent a car.
- Your children, family, friends, etc won't be allowed in the home. Only you, as the people making the buying decision, are being allowed in by the Sellers.
- Your Realtor will be masked and gloved. And they will be maintaining a 6' distance from you. Or in other cases, not be in the house with you at all.
- You will need to bring your own safety supplies. Your Realtor and Seller barely have enough for themselves.
- You should leave any papers, purses, phones inside your car. This will keep you from placing anything down in the property which could bring a contaminant back to the car with you.
- If possible don't touch any doors, light switches, handles, cabinet pulls or refrigerator without gloves.
- Don't make yourself at home and relax on the couch or breakfast room chairs to take in the property. While this was definitely possible before, now it is just too dangerous for you and the seller.
- Instead of discussing the house inside the home as was normal before the virus. Now have a discussion outside after showing while social distancing or via the telephone or text. Let your agent know your thoughts on the home.
What happens if you like the home?
That's easy. Pretty much everything else can be done online or via email.
- A market analysis and suggested negotiating strategy will be emailed to you for review.
- You can sign your purchase offer via esign on your phone or computer.
- Your inspector will email you a report with pictures and sometimes videos.
- Your lender will take document submission through their online portal.
You don't need to visit the home again until the final walk through. Even then your Realtor can do an online video phone call with you taking you through the home so you don't have to be there.
Anything else that is different with buying a home during the Covid-19 epidemic?
Yes there are two very important differences.
1. Your contract will have a Covid-19 addendum due to possible delays in the closing process. Our addendum has 2 parts:
- Our addendum states that if the Buyer, Seller, Lender or other Service Provider become subject of a covid-19 virus quarantine or closure prior to or at the time of closing which delays the sale then the sale will automatically extended for a period of up to 15 days after such quarantine or closure order is lifted. The maximum delay is 30 days unless mutually agreed to by all parties.
- If Buyer's inability to obtain their loan and close is due to Buyer's loss of income from COVID-19 related issues, then either party may terminate this agreement.
2. You need to protect yourself with some spacing between your moving dates (out & in) to account for any unexpected delays that might pop up.
By this I mean you should end your lease or plan to vacate your current home after the closing date of your purchase. Also be aware that when you go to negotiate with this seller they may also ask for post closing occupancy.
So I don't have to break shelter in place and I can buy a home without leaving my current domicile?
You probably don't have to leave your house. That means you don't see the house in person. That means you don't do a final walk through. Both of those are done via phone video chat. So you do get to see the property live.
The main problem is closing. Some lenders and some closers don't allow online closings. If that is the case, then you will need to either meet with a mobile notary to get your signature notarized or come to the closing table at the closer's office.
If you go to the closer's office then you will be in an office by yourself. No seller. No realtor. They are not allowed to be there. Just the parties who will be signing the document and the closer's notary.
Waiting for real estate prices to drop?
There is no real telling what will happen with prices.I am optimistic for the long term but that could change. It just depends what comes first. The return to a normal economy or the end of the 1 year period of forbearance on mortgages.
Argument for Real Estate prices to not drop or even rise:
- The lack of supply vs. demand for homes. Buyers driving up prices because more buyers then there are homes for sale.
- Forbearance. The government offering a 1 year moratorium on mortgage payments on government type loans (forbearance). No foreclosure wave to drop prices. If prices do dip, Sellers who don't have to sell (not in foreclosure) won't sell.
- Interest Rates. Low interest rates will keep buyers in the market to buy.
Argument for real estate prices to drop:
- Recession. When will the economy come back?
- Unemployment. When will the population have income to pay their mortgage?
What can't be argued with ... low interest rates
Have questions? Want to look at property? Give us a call.