Buying or selling a home during a pandemic?
Here’s what you need to know
While the COVID-19 pandemic has delayed real estate transactions across the country, some still need to buy or sell their homes. It’s critical to understand the pandemic’s impacts on real estate, from simply touring a home to the ability to close transactions. (BPT)
“Realtors® across the country have implemented a range of innovative and secure solutions to comply with social distancing directives while still enabling people to buy and sell homes,” said NAR President Vince Malta, a broker at Malta & Co., Inc., in San Francisco, Calif. “In these difficult times, Realtors® are also more than just service providers. They have engaged community members, committed to building and enhancing the neighborhoods they serve, from checking in on neighbors and friends to offering guidance to their clients.”
What buyers need to know
Home tours will look a little different
Where in-person showings are still offered, potential buyers can expect quicker tours and may be asked to take extra precautions such as removing shoes, using hand sanitizer and avoiding touching anything in the home.
Many sellers have offered virtual tours of their homes through pre-recorded videos or live video streams. In fact, according to a recent NAR survey on the pandemic’s impact on real estate, three in five Realtors® said they are guiding buyers through virtual home tours. Buyers that decide to go on a virtual tour should ask their Realtor® questions about things that are more difficult to experience and understand through videos, such as size (e.g., the height of the ceilings or dimensions of rooms) or materials, including the flooring or countertops.
Interest rates are low
Interest rates are at historic lows; however, that could change given the fluidity and uncertainty surrounding COVID-19. As more people file for unemployment, mortgage lenders may tighten lending standards, subsequently driving rates up. Or delayed demand could push rates further down. Potential buyers can prepare for homeownership by understanding their budget, building a good credit history, and getting prequalified for a mortgage. Some lenders even allow borrowers to lock in interest rates for limited periods of time — with now being a great time because of the low-interest rates.
Don’t expect a discount
Nationally, home prices are holding steady, with the majority of home prices the same or higher from one year ago, according to NAR. At the same time, new home listings are down as sellers delay listing their homes. Serious buyers should submit competitive offers, and their Realtors® will advise them on exactly what that looks like for their respective markets.
The entire industry — from lenders to Realtors® to home inspectors to title companies — is adapting to the sudden and unforeseen transition of operating in a nearly contact-free environment. Those terminating a lease should leave some wiggle room, even an extra month or two, between moving out of a rental and into a new home in case of an unexpected delay. Hiring moving crews may prove challenging, so buyers should give them as much notice ahead of their move as possible.
What sellers need to know
Sellers face potential challenges, too. Keep an eye out for any expected delays either in the transaction process, such as the ability to get paperwork signed or having appraisers or inspectors onsite due to social distancing rules.
At a time when in-person showings may be inadvisable and even prohibited, there are many digital tools available to continue marketing and showing your home. A Realtor® can help coordinate three-dimensional interactive property scans, virtual tours (either pre-recorded or live), on-demand open houses, and virtual staging to showcase your property. If sellers do receive an offer on their home, their Realtor® has the ability to present it to them virtually as well.
Take steps to protect yourself
Buyers have purchased properties “sight unseen” for a variety of reasons long before this pandemic. However, most buyers do not have experience purchasing a property without physically visiting it. Therefore, sellers may want to include language in the purchase agreement that ensures the buyer acknowledges that they are responsible for personal verification, walkthroughs and professional inspections to confirm that the property meets their needs.
Buyers are still searching
Just because fewer buyers are touring homes in person doesn’t mean they’ve stopped searching for homes. Many are stuck at home, so you can bet they’re browsing online more now than ever. Sellers should think twice before they drop their price as nearly three in four Realtors® say sellers have not lowered prices to attract buyers during the pandemic. As potential buyers increasingly browse homes online, having attractive and accurate photos and videos is even more important. Sellers may want to consider using this extra time at home to make updates around their home and take fresh pictures for those starting their search online.
More advice for buyers and sellers
As the situation continues to evolve, NAR encourages buyers and sellers to follow CDC guidelines to protect their health and safety. NAR also developed the infographic below with additional advice on how to get the most value out of working with a Realtor®. For more information and resources on buying or selling a home visit www.houselogic.com, and to find a local Realtor® visit www.realtor.com.