This is what homebuyers need to consider during the crisis
Take your time carefully going through the virtual tour
With government-enforced distancing measures in place, most agents are presenting their homes online. Now, if you are in the market for a home or just browsing listings, you can get a video tour, a 3D interactive walkthrough, a dollhouse view, and more. With more of these resources available to you, but fewer opportunities to do a physical open house, it’s more important than ever to cast a very careful eye through the virtual tours, including planning where your furniture would go and considering what your space needs are and whether they are being met with each prospective house.
Find the right agent to help
In these uncertain times, it has never been more important to find an agent who will be able to apply their expertise and confidently guide you through the enormously complicated process of buying your future home. The right agent will know your preferred neighbourhood inside and out to bring you the best homes, be tech-savvy enough to digitally complete the transaction and ensure the safest conditions for viewing homes.
Do not be shy about asking questions
Since access to homes is now mediated through virtual tours, Zoom conversations and email correspondence, there are fewer opportunities to just ask questions on the fly as you are going through a house. On top of the usual list of questions to ask homeowners, make sure you consider what else the glossy photos may be hiding—ask about underlying structural work done to the house, the warranties of the windows, when the water heater was installed, and other questions relating to the house itself.
Make sure your loan is fully pre-approved
Depending on where you live, the housing market could be speeding up or slowing down. If you’re in a hot area, like some parts of the Australia, you will want to make sure that your finances are fully in the clear before you even reach out to the realtor to schedule a viewing, lest you sit around waiting to sort out your paperwork while another buyer snaps up your dream home.
Always stay on top of the market
In our current economic climate, it is becoming more and more important to stay on top of market events and pressures on the market. Staying informed will ensure that you do not end up overbidding or making an offer before the market takes a downturn or holding out on making an offer assuming that the market will take a downturn (which it may not!).
Always stay in touch with economic news
Even though many parts of Australia are forging ahead on reopening, influences can
always change the scope of this reopening. For example, at the beginning of
the lockdowns in real estate was deemed an “inessential” business; two weeks later,
that label was overturned.
But other influences can change the real estate market and municipalities in general, including ongoing protests and oncoming new waves of the virus.
Have your lawyer handy
Buying and selling a house can be complex during normal times, but when a pandemic is among us, it can be even more complicated. A good real estate lawyer can help you sort out everything from unique emergency regulations related to real estate to notarizing legal documents, to efficiently finalising the transaction through bank transfers and certified cheques in a safe manner. They can also consult on the legalities of backing out of a purchase or renegotiating list prices in a drastically reduced buyer’s market.
Make sure you are serious about a home before visiting
Whether you’re just in the market to buy, or you’re setting up your home to sell as well as looking at new houses to move into, assume that a formal visit to a potential home is a signal that you’re serious about the place. Before setting foot into the place, potential buyers will have not just checked out the virtual tour, but also attended a virtual open house as well as a live video tour via Zoom or other video app led by an agent or the owner to answer any questions. Many agents will also have pre-screened visitors to ensure a good fit before allowing them through the doors.
Make sure the home you are visiting has safety protocols in place
When you are ready to take the next step and physically tour the location, it is important to know what to expect. A proper in-person viewing will currently require visitors to wear masks and gloves, and visitors will not be allowed to touch anything in the house. Visitors may also have to do a quick health check beforehand. If your agent and the owners of the house do not require such rigorous safety standards, it could be a clear warning sign of future carelessness.
Find a house that is move-in ready
A normal market may see potential homebuyers with more leeway when it comes to the condition of the house, especially for those who like to get their hands on a fixer upper. However, during a pandemic, planning large renovations will only add more stress onto an already stressful process. Instead, try to find a place you can comfortably live in for at least six months, or consider DIY options.
Consider how to move
If you have already sold your home and have a specific moving date, you will want to investigate moving services as soon as possible. While moving companies and storage services are still open and available, many companies will have safety protocols in place which could lead to fewer services and reduced available time slots. The packing materials also matter do not use recycled or free moving boxes, keep sanitizers and wipes handy for the movers, and try to get all your packing materials in one trip to avoid exposure outdoors.
Make sure you are secure in your job
It should be a no-brainer, but unfortunately, many industries are experiencing turbulent times right now. Even if you’re taking advantage of low interest rates and have found a home within your budget, and you’ve been able to finance your new home with the sale made from your last home, if you are unable to make monthly mortgage payments in the future, you could leave yourself even more vulnerable when house prices may have rebounded.
Negotiate a COVID clause
Agents and home sellers have started to include a COVID clause in their contracts that help offer some flexibility in timelines. The clause can cover delays (for example, with an inspector or contractor, or if the buyer or seller has to go into quarantine), as well as, in some cases, termination of the contract, say, if the buyer has lost their job before closing.
DIY what you can
Although more cities are reopening and services are more available than they were, many homebuyers and sellers still must DIY what they can. No longer will you be able to find home stagers, contractors or real estate photographers at the drop of a hat. For these tasks, DIYing what you can help the process run as smoothly as possible, on a timeline that works for you.
Find the house that is right for you, not for the market
If you are buying a house during the pandemic, you would best be doing it for yourself. In pre-COVID days, it wasn’t uncommon to see people snapping up properties when the price was right, but now it’s down to you and your needs: Is there a house out there that fits your budget and your lifestyle? If the market continues to fall, will you still be glad you found your dream home? If it is an easy transaction because there are fewer potential buyers, will you be happy rather than suspicious that you got the best price? Being able to envision yourself a year from now and still happy with your decision will help you find the home that is right for you.
Be prepared for fewer options
Just as many people are delaying their house hunt, sellers are also taking their homes off the market, whether it’s to keep a roof over their heads until the end of the lockdowns, or reconsidering their long-term goals as we enter this next phase of economic uncertainty. If you really need to purchase a house, be aware that the options for available homes on the market will be limited.
Make sure your credit rating is pristine
While many house hunters may take advantage of a lowered interest rate, banks and other lenders are tightening their grip when it comes to mortgage loans. People with high credit scores are securing mortgage rates lower than borrowers with medium to low credit scores. Combined with similar findings from past downturns and recession, it is safe to assume that it is going to be harder for people with a lower credit score to secure a mortgage.
Be prepared to carry two properties
If you’re in the middle of selling your home as well as locking down your new home, there’s a small chance that potential new buyers will back out of the sale and that you may end up sitting with your property for longer than predicted. Nobody wants to be caught in this position—and indeed, most people aren’t able to afford it, as they had planned to use the sale of their house to finance the purchase of their new one—but it is a risk that comes with moving house in a volatile market.
If you know you must move soon, this is the time to be extra vigilant when it comes to staying healthy and virus-free. Most moving companies and agents will refuse service to people who are exhibiting symptoms. Make sure you follow standard safety protocols in your everyday life: wear masks when you leave the house, wash your hands properly and frequently, and avoid trips outside whenever possible.
Be aware of what is happening in the market you have chosen
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