Following is the second of a four-part series for how the real estate industry can weather the quarantine and the COVID-19 crisis as a whole. In this second part of the series, I will outline tips for active homebuyers and for those who were planning to start their home search. In the next installation, I’ll be offering tips for active real estate agents as well as those who planned to become an agent.
TOP 5 REAL ESTATE TIPS FOR ACTIVE BUYERS
No. 1: Keep in close contact with your agent and lender to keep tabs on industry reaction to the pandemic. Make sure they (and you) are following recommended COVID-19 protocols. Be understanding if your agent declines your request to visit properties during this pandemic and respect their personal decisions regarding the health and welfare of themselves and their family.
No. 2: Consider the many pros and cons of physically visiting homes in person at this crucial time in our world’s history. Seriously consider screening homes by requesting online tours in lieu of in person appointments. If you find a home you’d like to see that doesn’t have a tour posted, ask your agent to inquire if the listing agent is willing to encourage their sellers to film a tour on their phones to pass along for your initial screening.
No. 3: Talk with your agent about the pros and cons of making offers on properties you’ve seen virtually but not in person. Get familiar with contingencies that could protect you and amendments addressing the ramifications of purchasing during the COVID-19 crisis.
No. 4: Understand that delays in closing timelines may be inevitable. Talk to your lender about any situations you are facing that may impact your purchase (including any temporary layoffs or change in financial situation). Thoughtfully consider the pros and cons moving forward with your purchase plans in light of world economic changes. Look for the silver lining like historically low interest rates and less buyer competition.
TOP 5 REAL ESTATE TIPS FOR SOON-TO-BE HOMEBUYERS
No. 1: Ask for a recommendation for several local agents then explore them online and contact them. Take note of their initial enthusiasm, professionalism and response time. Ask them to send you sales statistics of homes in your price range, in your favorite neighborhoods, or with your physical criteria. It’s important to get a feel for what your money will buy before you start pounding the pavement.
No. 2: Contact at least two lenders to start building relationships and get on their mailing lists about rates and get tips on how to best improve/maintain your credit. I suggest reaching out to at least two lenders so that you can have multiple quotes and loan products to compare. It’s best to choose the lender you feel has been most responsive and helpful (and whom you trust the most) when you find a home and want to lock in a rate – if the other lender(s) beats their rate, ask them to match it and they probably will. Start gathering information the lender will require for loan processing and ask them to pre-approve you so you’ll know what type of loan to expect.
No. 3: Start making a list of MUST HAVES vs. WISH LISTS so that you have criteria to share with your agent. Ask for recommendations and contact an agent even before you want to explore properties in person. They can best advise you about the process and start sending you listings that match your specifications to give you a feel for the market well before you start touring. If you are buying with a spouse or partner, be sure to get on the same page at the onset of your search so you fully understand and agree on each other’s “make or break” features.
No. 4: Refine your budget to get prepared for the expenses of home ownership starting with costs associated with your purchase. Start saving money to cover the earnest money deposit (typically $1,000) and buyer-paid inspections (which can be $1,000 or more). Even though most buyers roll their actual lender closing costs into the loan, there are many upfront expenses to consider. While contemplating costs, be sure to ask your lender contacts for “good faith estimates” and “truth in lending” statements so that you can compare their fees, total monthly payment projections for your price range and annual percentage rates (which are more important than the actual interest rate they quote).
No. 5: Download some good home searching apps on your phone like Homesnap, and do some generic online real estate purchasing research on sites like nar.realtor so you know what to expect when you start the process and can start keeping tabs on the market. Know your rights as a buyer and educate yourself on the pitfalls of dual agency, which is when buyers work with the seller’s listing agent to help you with the purchase. I wholeheartedly believe dual agency should be illegal as buyers and sellers best interests are not able to be fully protected.
Finally, make sure you review my other articles written for sellers, agents and for homeowners for other suggestions you can implement.