{"id":854,"date":"2020-04-20T06:17:15","date_gmt":"2020-04-20T10:17:15","guid":{"rendered":"https:\/\/www.deeds.com\/articles\/?p=854"},"modified":"2024-04-25T23:20:31","modified_gmt":"2024-04-26T03:20:31","slug":"buying-a-home-how-covid-19-has-changed-the-game","status":"publish","type":"post","link":"https:\/\/www.deeds.com\/articles\/buying-a-home-how-covid-19-has-changed-the-game\/","title":{"rendered":"Buying a Home? How Covid-19 Has Changed the Game"},"content":{"rendered":"\n

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.<\/em><\/strong><\/p>\n\n\n\n

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It\u2019s springtime \u2014 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\u2019s first quarter, business and government offices closed in droves, and millions of U.S. jobs were lost. Lenders have a heightened sense of caution<\/a> now, as they anticipate changes in borrowers\u2019 work situations, income, debt, and credit performance.<\/p>\n\n\n\n

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\u2019s 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<\/a>.<\/p>\n\n\n\n

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

Mortgage Rates Are Low, Sellers Are Looking for Buyers \u2014 But Lenders Are Wary.<\/h2>\n\n\n\n

If you planned to refinance, now is a good time. And those who\nhave decided to take advantage of today\u2019s remarkably low interest rates and buy\na home have good reason to act soon. Mortgage companies, fearing that\nrecession-induced job losses will lead to loan defaults, are already raising credit\nscore minimums for buying or refinancing homes. A bottleneck of approval\nbarriers is coming. <\/p>\n\n\n\n

Some realtors are tightening the rules, too \u2014 for example, by reserving physical showings to pre-qualified buyers. Under the Fair Housing Act, realtors may impose these restrictions as long as they request pre-qualification evidence from all potential buyers<\/a><\/em>. Buyers may need time to get pre-qualified, and should anticipate this issue.<\/p>\n\n\n\n

Given that the fundamentals of the\nmarket are still largely intact, we can anticipate a resurgence in sales when\nbusiness lockdowns are lifted and participants regain a sense of safety. Yet\nit\u2019s unlikely that the market will regain the strength and exuberance it\nenjoyed in the years leading up to 2020. Wary lenders, high down payment minimums,\nand strict credit score requirements will put a damper on the bounce-back\nperiod. <\/p>\n\n\n\n

Realtors Have Adopted New Methods of Touring and Selling Homes.<\/h2>\n\n\n\n

Key health-related and financial responses to the pandemic\nfell to individual U.S. states, and the protective measures were not uniformly\napplied. Some states, considering the real estate industry\u2019s critical role to\nthe continuity of key public functions, deemed home selling, mortgage, and deed\nrecording services essential. In Hawaii, Connecticut, Ohio, Indiana, Illinois,\nand Wisconsin, brokerage offices remained open, functioning according to the\nguidelines in state-specific orders. <\/p>\n\n\n\n

But lending processes, home sales, and deed recordings were severely disrupted<\/a> in many areas. And homeowners everywhere hesitated to open their homes to appraisers, staging professionals, and inspectors. <\/p>\n\n\n\n

The National Association of Realtors (NAR) responded with guidance<\/a> and recommendations. Using information from WHO, the U.S. Centers for Disease Control and Prevention (CDC), and the White House, NAR also hammered out a Sample Preparedness Plan for Circumstances Relating to COVID-19<\/a> to realtors.<\/p>\n\n\n\n

How Necessary Is an In-Person Showing? Less So. <\/h3>\n\n\n\n

NAR witnessed buyers dropping out of the national market by mid-March 2020. Stay-at-home orders were the big sticks that offset the carrot of near-zero interest rates<\/a>. Where shelter-in-place orders<\/a> went into effect, agents were required to discontinue in-person real estate activities \u2014 open houses included. <\/p>\n\n\n\n

Some listing services responded to governors\u2019 orders by disabling\ntheir platforms\u2019 listing fields for open houses, while others published government\nwarnings on the dangers of public gatherings. Thus, sellers who did not face\nstate bans still cut back on showings. Where showings were held, realtors had\nbuyers cover their footwear with booties, sanitize their hands, and walk\nthrough homes unguided. Some realtors stopped showing occupied homes. And many\nshifted their work load from brokerage offices to their own homes.<\/p>\n\n\n\n

Throughout April, the NAR guided realtors to limit home\ntours to under ten people, to insist on social distancing, and to ask the\nhomeowners to disinfect their home after tours. Real estate agents were well\ninto an adaption mode by this point. So were the listing services.<\/p>\n\n\n\n