Buying or selling a home during a pandemic? Here’s what you need to know
ESCANABA — While the COVID-19 pandemic has delayed real estate transactions for some people, housing markets in many areas of the country are showing a strength and resiliency unimagined when this started. It’s critical to understand the pandemic’s impact on real estate, from simply touring a home to the ability to close transactions.
“Whether you are new to homeownership or have been a homeowner for years, this is an unprecedented time. We want to ensure that during this pandemic, we can provide essential tips from REALTORS? for buyers and sellers so they have a safe and hassle-free experience,” said Christopher Germain, president of the Upper Peninsula REALTORS and REALTOR with Premier Real Estate, Inc in Escanaba.
Below are some important tips on buying and selling a home during the pandemic:
What buyers need to know
Home tours will look a little different – While in-person showings are still offered, potential buyers can expect quicker tours and may be asked to take extra precautions, such as removing shoes, wearing a mask, limiting the number of people that come on a showing, using hand sanitizer and refraining from touching items 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.
Interest rates are low – While the continued social distancing measures change how buyers view potential homes, interest rates are near all-time lows and home prices are holding steady, and in some markets, increasing.
Some mortgage lenders may tighten lending standards, subsequently driving up rates – or delayed demand could push rates down further. 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 time periods.
Don’t expect a discount – “Within the Upper Peninsula REALTORS jurisdiction we went from a median sale price of $130,254 to a median sale price of $150,592. That is a 15.61% increase from this time last year. These numbers can be higher or lower depending on where you are in the Upper Peninsula, but everywhere has seen an increase in average and median sale price.” Germain explained. “Buyers have to come in extremely competitive. A pre-approval or proof of cash funds is vital. We are essentially seeing multiple offers on most properties for sale. Your agent will be able to help guide you on competing in a multiple offer situation, but in most cases, you can expect to pay above asking.”
Expect delays – 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 movers as much notice as possible ahead of their scheduled move. “There are a lot of moving parts to every real estate transaction that takes place.” Germain said. “Any one of these can have a slight delay which will cause a ripple effect down the line to the closing date. Your REALTOR? will be able to help keep this coordinated, but delays can and will happen.”
What sellers need to know
Showing and marketing homes during a time of social distancing may seem difficult, but a new wave of tech tools is helping streamline the remote transaction process, as buyers continue home searches online.
Use tech tools to help market and show your home – Many digital tools are available to help you list your home, continue marketing, and showing your home. All listing paperwork can be signed digitally. 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 receive an offer on their home, their REALTOR? has the ability to present it to them virtually as well.
Take steps to protect yourself – “Sight unseen” purchases are not a new phenomenon, but this pandemic has certainly increased their prevalence. “With companies allowing workers to work remotely, this has increased the amount of out of state buyers we are seeing come into the Upper Peninsula.” Germain expressed. “Many of these buyers are seeing the house for the first time when they are moving in.” Sellers may want to include language in the purchase agreement that ensures buyers acknowledge 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 they may not be touring homes in-person doesn’t mean buyers aren’t continuing their search. As a result, 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 of those improvements.
As the situation continues to evolve, NAR encourages buyers and sellers to follow CDC guidelines to protect their health and safety.