Things You Should Know About Buying A Home During The Pandemic

Posted by: KHTS Articles in News Articles June 1, 2020 - 12:55 pm 0 556 Views

You’ve been saving for a downpayment and building your credit over the last few years to prepare to become a homeowner. Just as you were ready to start the search for your dream home, the coronavirus reared its ugly head and changed everything. Stay at home requests and social distancing regulations have hit the real estate industry (and many others) in a way no one could have planned for.

While necessary, these changes have caused a great deal of financial stress on sellers, buyers, real estate agents, and mortgage companies resulting in many changes in the home buying process from getting approved for a mortgage to visiting potential properties. Though this doesn’t mean that buying a house during the pandemic is impossible, there are some things you’ll want to know.

Property Values Will Likely Decrease

Let’s start with some good news for parties interested in purchasing a home during the pandemic is the projected decline in home prices. Real estate experts believe that prices could drop as much as 15% in 2020. The coronavirus pandemic has cost millions of Americans their jobs (and counting).

This means that there are fewer people on the market capable of affording a house. For homeowners and real estate investors interested in making a sale during the pandemic, this may mean lowering the asking price to make it attractive for home buyers.

Getting a Mortgage is a Lot Harder

As the unemployment toll continues to climb, lenders are backed into a serious corner. Seeing as how job security is very low during the pandemic, the likelihood that a borrower is able to keep up with mortgage payments declines. To reduce their risk, lenders have beefed up their credit requirements, downpayment percentages, and job verification processes.

Many lenders are requiring that applicants have a credit score of 680 or higher, provide at least 20% for the downpayment, and have a job that is essentially pandemic-proof. Depending on where you are financially this may mean putting off your dream of buying a house until you’ve achieved a higher credit score, increased your downpayment, and/or secured an essential and stable job.

On a positive note, there are still programs that offer home loan options for vets, first-time homebuyers, and low-income families with low rates, downpayment assistance, and other incentives. The eligibility requirements are often a lot more lenient than traditional mortgages giving interested parties within these categories an opportunity to own a home.

Virtual Real Estate Tours

Traditionally, when you’re ready to find a property, you set up appointments through your real estate agent to view potential options inside and out. The coronavirus pandemic has thrown a monkey wrench in this process. Sellers are afraid to spread the disease by having buyers enter the home so many are hesitant to show the property.

Some sellers are taking precautions like regularly sanitizing the property and requiring that visitors practice social distancing and wear personal protective equipment. Others have opted to use modern technology to provide potential buyers with a virtual tour of the property. Though not as authentic as an in-person visit, a well-produced video can give buyers an in-depth look at houses.

Paperless Real Estate Transactions

Should you happen to find a property that you’re interested in purchasing, be prepared for a very different experience. Instead of meeting up with the sellers, attorneys, and/or real estate agents, all transactions are being handled digitally. Meetings are being set up via video conferencing software, contracts and all documents are being emailed and electronically signed, and all financial dealings are handled electronically.

As if buying a house wasn’t already difficult enough, the coronavirus spread across the nation and added more complications for the real estate industry. Fortunately, there is still hope for anyone who was looking to purchase a home this year (and are still in a position to do so). While the home-buying process may be a bit more complicated, finding your dream home in the midst of all this madness is still an option.