Buying a Home? How Covid-19 Has Changed the Game

COVID-19 has changed the real estate market. Understanding the recent changes can help buyers prepare for the transaction, and set reasonable home buying timelines. Here is an overview of changes in the buying process. We conclude with a 6-point checklist for the buyer coming into the market today.

Image of five small blocks of wood shaped into houses and painted red setting on a table.

It’s springtime — always a great season for people who show, sell, and buy homes. Enter 2020, and the harsh and often unpredictable impacts of COVID-19. In the year’s first quarter, business and government offices closed in droves, and millions of U.S. jobs were lost. Lenders have a heightened sense of caution now, as they anticipate changes in borrowers’ work situations, income, debt, and credit performance.

The depth of the trouble was undeniable by March 11, 2020. On that day the World Health Organization (WHO) categorized the virus outbreak as a pandemic. As the novel coronavirus is thought to spread mainly from one person to another, the world’s public health experts urged everyone to stay at least 6 feet apart and avoid gathering in groups. Needless to say, that put a damper on home tours and, in turn, listings. By March, the number of homes listed in the market had dropped substantially.

And this brings us to the people who need to buy or sell a home in the not-too-distant future. What will this new situation mean for the home shopping experience? Here, we dive into the present real estate trends and challenges, and the issues most likely to impact transactions from 2020 on.

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Pandemics, Property Transfer Breakdowns… The Digital Real Estate Industry Is Coming

Image of two people sitting at a desk reviewing a paper legal document between two laptop computers. Captioned: Pandemics, Property Transfer Breakdowns...

The latest impetus to digitalize real estate might just turn out to be the tipping point. Practically overnight, COVID-19 is a defining element of our time. This hideous and deadly virus became a major challenge to the systems that carry us through our everyday transactions.

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First-Time Home Buyer Pro Tips

Image of a person's hand holding a set of house keys on a key chain in front of a door to a house. Captioned: First Time Home Buyers

Thinking of buying your first home? First-time buying is exciting. It’s filled with the dreamy pleasure of beholding perfect kitchens, bedrooms and baths, and the cliff-hanger phone calls about your loan approval. (“We’re nearly there! I just need one more document…”) You’ll peruse home inspection results, negotiate the home price so you can re-do that floor, and, ultimately, you’ll get to “yes” with the seller. By the time you finally sit down at the closing table, you’ll feel intense relief, and one of the biggest thrills of your life. Here are some tips to help make that day a resounding success.

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Buying Real Estate: Are the Generations Really Different?

Image of a father and son holding hands walking along a brick paved path toward a house in the distance.

Are generations different in their approach to buying real estate? The fundamentals of buying real estate arguably haven’t changed, but financial and technological trends have. And with more people seeking houses than houses to be found, home prices have taken an upward path. Despite low mortgage rates, all first-time home buyers face a challenging market.

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New Risks for Property Owners: Economic and Physical Effects of Climate Change

Image of a house with ocean waves splashing under it meant to represent rising sea levels caused by climate changing. Photo by Clint Patterson via Unsplash

This story, alas, is unfolding. Physical signs of a heating world and its shifting weather patterns appear in tropical storms and in sea level rise, in heat waves, droughts, and wildfires. The economic and physical impacts of climate change are making their mark on real estate

Affected cities have already paid heavy costs in repairs and reconstruction, insurance premiums, and loss of trade and tourism. Real estate markets are seeing severe weather events steadily chip away at property values. Public initiatives to mitigate risks will increase taxes, code compliance burdens, and financing costs.

In other words, the risks go well beyond destructive incidents from specific disasters. They include higher capital and maintenance costs related to fire, water, and weather damage on properties over time. To anticipate the risk of climate-related damage, analysts are mapping properties—feeding site-specific data into geophysical, hydrological, and economic models. 

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Preferred Pronouns in Real Estate Deeds

Image of a legal document and pen. Captioned: Preferred Pronouns in Real Estate Deeds

Corey McCann is closing on a condo. Corey has just one more question for the title company agent:

I wonder why, in the definitions in the mortgage agreement for the recorder’s office, I’m called “Corey McCann, a single woman.” Only my name is relevant. I could understand declaring the single status—if there is a firm reason that the record must show, for example, that there is no co-habitant or person who might try to claim an interest in a divorce. But I don’t voluntarily identify myself in public documents or online by gender. I’d rather not do so now.   

The title company agent answers:

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The Transmutation of Real Estate Ownership Between Married Couples in Community Property States

Image of a married couple sitting on a bench looking at a very nice house. Captioned: Transmutation of real estate ownership between married couples.

If you are married and live in a community property state, you and your spouse may not think about whether certain assets are community or separate property. The former is generally all property acquired during the marriage, and the latter consists of property owned by each spouse before they wed. Separate property also includes assets inherited by one spouse or gifted to the individual. Say one spouse inherited a house from their parents, and rent out the dwelling. The rent received by the inheriting spouse is considered separate property.

Perhaps the marital home is actually separate property, as one spouse owned it prior to the marriage. Even though the spouses may share financial responsibility for the house, such as paying the mortgage and taxes together, or other expenses such as insurance and repairs, in reality the home belongs to just one of them. No matter how much the non-owning spouse may contribute to the property’s upkeep, it’s not a marital asset. For fairness’ sake, it may make sense to change the property from separate to community, via a process known as transmutation.

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Conveying Real Estate Through a Power of Attorney

Image of a woman signing a legal document captioned: Power of Attorney for Real Estate

A power of attorney enables an agent (also called the attorney-in-fact) to conduct transactions on another person’s behalf.

The POA document often appears in the world of real estate transactions. A person (called the principal) might require a stand-in to sign financial documents, on account of absence or disability. A limited power of attorney can enable the agent to carry out any and all real estate transactions or even give an agent specific authority to sell one home (“for the sale of 123 Smith Avenue only”), and for a specified price. 

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