6 Tips For Purchasing A Home During COVID-19
Posted by jamella in Market Trends/Tips and Advice on June 18, 2020
1. Shopping Virtually And Safely For Your Home
First and foremost, it is essential that California residents understand they can still buy homes and properties. The real estate industry is currently deemed an essential industry. In order to ensure safe home buying practices, many real estate agents and property owners are offering new viewing trends such as virtual tours in place of open houses. When you narrow down your property searches online, schedule an appointment with your realtor to visit the property in person.
When you attend the in-person walkthrough of the property, you will need to secure yourself by taking social distancing precautions. Although there may be only a few of you in the home at the time, you should still maintain six feet between you and your real estate agent. Also, consider wearing gloves and disposable booties around your shoes for immediate removal when you leave the property. This protects you, the homeowner(s), and your real estate agent during the viewing.
2. Additional Income Verification and Forms
Although income verification has always been a part of the home buying process, the COVID-19 pandemic has put a new focus on current income. Verifying your past income could be easier than explaining your current income. Be prepared for your lender to request current pay stubs from your employers. Additional forms and documentation may be required. Also, they may want a written statement or proof that you are still working and will continue to be essential in your current position. If you have recently become unemployed due to the pandemic, you may want to wait until the California economy resurfaces in Phase 3 and you can supply a substantial income back into your household.
3. Secure Your Mortgage Pre-Approval
Before you begin searching properties, know exactly where you stand. Because the pandemic has caused a bit of uncertainty on the real estate market, having a solid idea of where you are with a pre-approval gives you a solid idea. It is important, however, to maintain some form of conservatism with this pre-approval. For example, you may have a pre-approval up to $500,000 but you may want to keep your budget smaller, between $350,000 and $400,000. This is simply because of potential changes that could come to your income in the future following the COVID-19 outbreak.
4. Avoid Any Major Changes
Any time you buy a home, you should not make major purchases. With the COVID-19 pandemic causing uncertainties everywhere, something like a major furniture purchase could be flagged as a concern for your lender. Unless you are left with no other option, it is essential to save your purchases until after the closing for your home purchase has been completed. How buyers are spending their funds during the pandemic is just as crucial as verifying income. Avoid applying for new credit cards, also. These applications apply hard inquiries to your credit report and could lower your score.
5. Extended Closing Times
Closing times during the COVID-19 pandemic have shown to be longer than previous transactions prior to March. With lenders going through a thorough application review, several additional days may be required to get the final approval. These same lenders are also navigating a mountain of refinancing applications from their current borrowers, limiting their attention to new applicants.
Also, the current homeowners may be experiencing hardships related to the pandemic and need to push closing back a week or two in order to navigate through their own obstacles. This is especially true for sellers who are essential employees and have been working steadily since the start of the pandemic.
6. Home Prices May Be Slashed
Because of the negative trend happening across the California economy, some home prices have come down significantly in order to sell the home. Many of these sellers are not in a position to negotiate for a larger price and need to sell the home immediately. This is beneficial for those who have been looking for the right home but wanted to stay conservative with their budget. As a home buyer, you could find a great price on the home model you are seeking.
Moving Forward With Home Buying
As you navigate the home-buying process amidst the COVID-19 pandemic, consider the current economical state of California and how it will be reopening in the next couple of months. With California currently in Phase 2, many residents are still unable to work and furloughed at home. As the next phase begins, more residents will return to work and begin listing homes for sale. Keep in mind that the home buying process may require additional steps during this time and last a little longer than you expected. The benefits of slashed home prices are worth it when you purchase a great home that has features, location, or both that you desire.
Home-Buying FAQ: https://www.realtor.com/advice/buy/home-buying-faq-purchasing-property-during-coronavirus/
New forms and guidelines for Real Estate Best Practices under COVID-19 https://www.car.org/aboutus/mediacenter/news/covidbestpractices Resilience Roadmap https://covid19.ca.gov/roadmap/
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