Should I buy a home during a global crisis? or sit on the sidelines?
I realize this post might not appeal to everyone since many people are not sure if they will have a job this week or next, but if you are a buyer who can buy and feel pretty good that your job is secure you might be asking yourself should I buy now during this global crisis? The question is yes and here is why.
Buying Market before COVID 19
Buyers have had a tough time There has been great inventory in the market place, but not enough supply so the big winner in the market for a long time has been the seller. Right now with COVID 19 the demand that was once present is a lot less, and our problem has been in the past not enough supply to satisfy demand and sellers held all the cards. This might not be the case for every single property out there right now.
Seller keep putting homes on the market and instead of seeing just a home with pictures you are seeing agents get videos, Matterport, and photos. Future listings video and Matterport will become part of the marketing.
Tools offered to Buyers and Sellers to keep everyone safe
These tools available are in use because doing the actual open house might not be in the best interest of the buyer or seller. A buyer might not want to visit home until the seller accepts an offer. Agents are having buyers attend virtual open houses with technology like zoom and facetime and if a buyer wants to put an offer in Agents and their buyers are putting into there offer subject to buyer touring the property in person. This means all other terms of offer Buyer and Seller discuss as one would with any offer like price, home inspection, commitment letter, and closing date however they might even put a date that buyer must tour home by so deal keeps moving along.
Housing Market Forecast after Virus
Many buyers are on the fence with much uncertainty in the current landscape, but if you can buy a home this is the time you should take advantage of. Once the virus is on the decline they do expect there will be some bumps in the market, but the real estate sector will bounce back fast and when it does will be stronger then it was in the past giving sellers the climate they have typically been experiencing. Buying now during this worldwide crisis could pay off in several ways in the long run. Less bidding wars, get the terms you want and maybe save money.
Modifications made in wake of COVID 19
Right now many of the roadblocks that could delay a closing are removed. Here are a few that have been removed or modified.
Home Inspections in some cases are still being done if seller/ renter allows it however it only includes exterior of the home.
Smoke Inspections are not being done and fall on the buyer to have inspected once the emergency is lifted. Buyers agents and their attorneys can further protect their buyer if a seller current lives in the home a zoom call or facetime call with all parties on call walking thru the home showing smoke and carbon detectors are in working order and do a holding back $500-$1,000 so in case the home doesn’t pass a smoke inspection due seller not doing something correctly then it doesn’t become an additional cost to the buyer.
Walk Thru and Punch list Items: Modern technology like zoom and facetime allow the seller to bring all parties into the conversation and walk them through the home. The seller can show buyers all punch list items. Walk all parties through in place of physical walk through making sure the home condition of the home is what the seller committed to. Like the smoke inspection, an attorney could request a percentage of funds held back for a certain time period as well.
Mortgage Companies; They have made changes from credit requirements, bank appraisals and more. Stay in touch with your mortgage broker to be kept to date on changes. Changes seem to happen daily. If things change with you such as employment or you needed to use more of your credit then you normally would have talked to them so a solution can be made. Do not wait till they find out or hope they don’t. They will.
Closings are happening. They might not happen at the registry of deeds but they are happening. Your attorney could do the following at closing. They could have just you meet them in there office and they walk you through the documents you sign, but no one else is present. Your attorney could set up a phone call and send you forms ahead of time and walk you through them that way. They could send them electronically and set up a zoom call putting all parties involved in the transaction. Buyers are getting keys the day of closing but being on record might take more than one business day. Gap Insurance would go into effect during that transition.
Assembling a good Team prior to locating a home
A Good Attorney and proactive agent can go a long way in these times. I have always say assemble your team before you locate the home and if you do it right your team will take this very stressful time and make it a little less stressful.
Buyers if I was talking to a seller about listing there home I would be telling them to wait. Fewer buyers in the market and sellers might not get the price they want.
I did a search on April 5th to see how many properties were on the market if you were a buyer looking to spend under $500,000 in Suffolk County
Thirteen Studios on market six have been on the market less than thirty days
Twenty-six one-bedrooms on the market and fourteen have been on the market for less than thirty days.
Forty-two bedrooms on market and seventeen have been on the market less than thirty days
Seventeen three bedrooms on the market and nine have been on the market for less than 30 days. If you’re a buyer who wants to buy a four-bedroom in Suffolk county you still have options but they had been on the market before COVID 19 even started so price might be the issue worth looking at first not current events.
Buy now and smile later what you saved
If I was speaking to a buyer right now I would say to a buyer now is the time to act and if the property has been on market more then 90 days I would say we might be able to be more aggressive on offers then something on less but we should try to negotiate that price since there is less competition and a seller might really need to sell or they might be thinking if they wait till later they might be king but not want people coming into there homes as much. Also, the next offer could be worse than yours.
Buyer Advice vs Seller Advice and worth thought with the why
So if I was talking to a Seller I would say delay putting a home on market you might not get the highest offer with most ideal terms and might need to offer some carrots to close the deal, but if you’re a buyer I would say if you feel your job is secure and can weather this current crisis I would say get your ducks in a row and if you find a home call your agent and tell them please write me an offer for this property today! Last interest rates are extremely low so you can get a lot more house then you have in the past and in some parts of the country, it’s cheaper to buy than rent.