Over the past couple of months, home buyers and sellers throughout the country have been experiencing anxiety and uncertainty due to the COVID-19 outbreak. While the pandemic has certainly affected the real estate industry, there hasn’t been enough hard data available which can give an accurate picture of exactly how local markets have performed during this time.
While demand for homes may have waned, according to the Federal National Mortgage Association’s recent Home Purchase Sentiment Index, more than 50% of all Americans still say it’s a good time to purchase a property.
Although buying a home during the pandemic is certainly possible, it can be challenging as there are new changes in the transaction process that weren’t there just a few months ago.
Here’s what you should expect:
There’s Less Competition
While there are still other buyers looking for homes, you’ll likely face less competition during your search.
Over the past several months, there were significant changes in the dynamics of local markets. Many home sellers are uncertain about the economy and are somewhat nervous about selling their homes, giving buyers more negotiating power which they usually wouldn’t have during this time of year.
Looking at Homes through Virtual Tours
With social distancing orders established throughout the country, you can expect more virtual tours in place of in-person home viewings.
Many listings have built-in video tours, interactive floor plans, and virtual walkthroughs that allow you to view a home through your computer or any mobile device. There are also agents who get their clients on a video call as they’re walking through a home.
In other words, the buying experience today has gone digital. Necessary steps such as negotiating, reviewing contracts, and closing on a home are all still possible, but you have to be more comfortable completing these steps remotely.
You Might Need a Bigger Down Payment
With increasing forbearance requests and a huge amount of foreclosures and delinquencies expected in the near future, lenders need to find ways to protect themselves and the investors they’re selling to. Requesting more money down is one form of protection.
Major lenders like Better Mortgage for example, are now requesting three months’ reserves from borrowers, which means they will need to have a sufficient amount in the bank to cover at least three months of mortgage payments.
You May Need to Go Through Some Parts of the Process by Yourself
In addition to in-person home viewings, social distancing measures also affect other parts of the home buying process, including interacting with home inspectors, signing paperwork, or where you close on your loan.
The number of people during certain parts of the transaction, whether it’s during a walkthrough, an inspection, or a closing, will definitely be more limited. This means that if you were planning to buy a home with your spouse or partner, only one of you will need to be present during the closing, while the other one will simply give power of attorney to complete the process.
Looking for homes in Bridgewater, Warren, Basking Ridge, or other sought-after communities? Get in touch with Pagnotta Homes today at 908.436.7947, or send an email to info(at)pagnottahomes(dotted)com.