Is it possible to buy a home right now?
Your Affiliate is in the best position to know local conditions and advise you on restrictions that might affect the buyer’s ability to close.
People across the country are practicing social distancing, or, in some cities, following public health orders to stay at home. That means you might not be able to walk through a home with your agent, and your agent might not be in a position to show homes in person.
Affiliate have gotten creative in adopting tools and technology that allow prospective buyers to take 3D tours of a home or take a video tour with an agent. Home video tours are where the Affiliate walks through the home with a camera, allowing you to watch virtual tours at home.
In addition to changes in how people are viewing homes, in some places, temporary business closures are affecting other key parts of the real estate transaction, namely appraisals, inspections, closing and title services, and moving. Affected businesses are looking for ways to adapt.
Mortgage services are considered essential services, so you can still apply for and secure a loan.
Can I tour a house without leaving my home?
Don’t be shy about asking your Affiliate to help you get a better look at a home, even if you can’t be there. Many have experience working with remote clients and are happy to accommodate requests for a video tour.
There are a few ways Affiliates can help you to get a better sense of a property that interests you:
Pre-recorded video tours
3D Home tours
Live video walkthroughs
Pre-recorded video tours
A pre-recorded video is one of the easiest ways to view a home without going there. Your Affiliate (or someone on their behalf) would record a video of the home, then share it with you. Make sure you tell your Affiliate exactly what you’re looking for in a home so that they know what details to focus on during the tour. Remind them to capture some of the surrounding neighborhood as well to give you a better sense of the area.
3D Home tours
If you own an iPhone 7 or newer you can produce a virtual tour. Then buyers can explore the rooms in the home and see how they connect at their own pace. You can see a sample tour here. If this is of interest to you, talk to your agent and share these instructions with them.
Live video walkthroughs
Many people are accustomed to video chatting these days through FaceTime, Skype or similar platforms. Your agent or builder can help facilitate a tour of a home using a video chat app. Let them know you’re interested, and they can work with you to determine a list of homes that fit your specifications and times you’re available for the video call.
Note: If you’d like to video-tour a home where a seller is unable to let anyone into their home due to COVID-19-related health concerns or restrictions, your Affiliate may be able to find a solution by working with the seller.
What can I do now to be ready to buy?
Buying a home right now might be challenging — touring in person is inadvisable in many cases, and prohibited in many areas due to public health orders. Job or economic uncertainty may also have you thinking twice about buying. But, there are still steps you can take now so you’re ready to act when the time feels right.
1. Find your price range
Little Pink Houses ’s Affordability Calculator can help you determine what you can realistically afford to spend on a new home. Just plug in your income, monthly debt and down payment for an estimate.
2. Keep saving
If possible, continue setting money aside for your down payment. The amount can vary: It can be as much as 20% of the purchase price, but it also can be lower with conventional loans or if you qualify for an FHA or VA loan. You’ll also need funds to cover closing costs, moving and other expenses.
3. Check your credit
Your credit score can impact the interest rate you qualify for. You can request a free copy of your credit report from any of the three major credit reporting agencies. Review it carefully and check for discrepancies. Work on improving your score (by paying down credit card debt, for example), and avoid taking out large loans during this time.
4. Gather info and advice
Look at homes online to see what’s available in your price range. Think about your must-haves and nice-to-haves so you can focus your search when you’re ready to take the next step. This is also a good time to reach out to a local Affiliate who can provide helpful neighborhood and market information.
5. Identify pre-approval materials
A pre-approval letter is usually valid for 60-90 days, so you don’t need it until you’re closer to buying. But make sure you have (or can get) the documents you’ll need, such as tax returns, W2s, pay stubs and bank statements. Lenders may also want to see evidence of your down payment. If you’re getting help from friends or family and the money isn’t in your account, you may need to secure the funds prior to pre-approval or provide documentation showing when the funds will be available.
6. Get pre-approved
If you think you’ll be ready to buy in the next 60-90 days, you can start the pre-approval process. A lender can help you determine how much you can afford and get you pre-approved for a loan.
Am I missing out if I don't buy now?
The best time to buy depends on your personal circumstances.Trying to time the market for the best deal is something even professional investors aren’t very good at.
According to statistics, the current environment poses both opportunities and challenges. The opportunities are not as obvious as the challenges, but they’re out there:
Mortgage interest rates are very low, which has the potential to significantly boost your buying power.
At this exact moment, with many people pulling back and staying home, there could be less competition for the still-limited pool of homes for sale.
Sellers may be more flexible on pricing and/or timing in order to close a sale, especially if letting their home stay on the market will cost them or delay their own plans.
If demand stays strong and the crisis passes relatively quickly — both big “ifs” at this moment — then we can probably expect price growth to accelerate like it was earlier this year. If that’s the case, it might be a good time for some buyers in some markets to get ahead of any growth in home prices.
Still, the challenges are daunting:
Inventory is already low, and it’s unlikely that many would-be sellers will list their homes right now. That could make it harder for you to find the right home.
Mortgage interest rates are low but volatile — and lenders are working through a flood of refinance applications. For would-be buyers who secured financing in early March, this may not be as big an issue. It’ll be a lot tougher if you have not yet started the mortgage process.
It also may be difficult (or impossible) to complete the sale on time if some of the connected businesses, such as appraisals, inspections and title services, are temporarily closed due to public health orders.
If the crisis persists and social-distancing and other behaviors last through the bulk of the year, home prices may fall somewhat in response to the lack of demand from buyers. It could make sense for some buyers to wait to see if the home they’re eyeing today is available at a lower price tomorrow.
If you have the time and willingness to face the current challenges, now could present some interesting opportunities. But you should have a plan to ensure you can back off and/or re-evaluate as the situation unfolds. If you’re risk-averse or don’t feel ready, you’re likely to be more comfortable waiting until the situation is more clear.
For the most up-to-date housing market analysis, data and commentary on how the market is responding to this situation, visit Little Pink Houses Website.