COVID-19 has immensely changed the way people work, live, and travel. Finances are tight for most of us, and those who are lucky enough to have huge savings are holding on to their cash. Those who want to buy or sell homes may have to put their plans aside, at least for the meantime. During normal times, buying or selling a house is a massive decision, which only became magnified because of the pandemic.
Real estate companies that buy and sell homes for a profit had to pause their operations, at least temporarily. Agents are forced to become more flexible and creative when it comes to selling homes, holding virtual open houses and closing sales remotely.
But according to Danielle Hale, chief economist at Realtor.com, it doesn’t mean it’s a bad time to buy an investment property. But she emphasized that “you shouldn’t expect a low price and that you may not have a lot of options to choose from.”
If you’re uncertain whether to hold on to your horses or take the risk, this is what you need to know about buying and selling homes today.
- Mortgage Rates Look Promising
If your decision is dependent on the mortgage rates, the numbers hold promise. According to Christopher Totaro, an agent at Warburg Realty, the median rate for a 30-year fixed-rate mortgage plummeted below three percent for the first time in 50 years. Home loans beyond conforming loan maximums, also called jumbo mortgages, have become a little higher at around 3.25%.
Totaro said that rates have maintained significant lows over the past year, but the concern is how the numbers will progress in the next few months. Mortgage rates have decreased as investors are moving their cash into safer investments.
- There Will Be Stricter Criteria for Mortgages
If you’re hoping to apply for refinancing at the moment as banks are holding back on lending, you will face new challenges getting a mortgage in the middle of the pandemic. This will depend on several factors, including the decreased liquidity in banks while the application for loans far outpaces the supply. The pandemic caused record massive unemployment numbers, which is a deciding factor on the way lenders study risk.
To make a down payment, you can apply for USDA loans, FHA mortgage loans, and VA home loans, which are within reach if you have liquid savings and low credit scores. You need to compare mortgage rates from different vendors, which are easier with the help of a home loan payment calculator if you want to apply for a loan to purchase a home or are looking to refinance.
If you’re leaning towards getting a loan with fixed rates, you might want to check out the advantages of opting for a mortgage with adjustable rates first. There are many online tools you can use to compare rates from several lenders without damaging your credit.
- Buying Property is a Trend Right Now
It’s a buyer’s market at the moment, according to Totaro. More homeowners need to unload. Whether it’s a good idea or not depends on your location and the kind of property that you own. The common question among sellers is, “Should I sell now before things get worse, or do I wait for the following year to put my house in the market?”
Mortgage applications have increased as of July 15. It went up 5.1 percent compared to the previous week on a seasonally adjusted basis. On a basis without adjustments, applications went up 16 percent. The trend is mostly due to the continuous decrease in mortgage rates, according to the survey, although the fact that it is summer, which is peak buying season, can also be a factor.
- The Shopping and Closing Process Will Be Different
Because of social distancing measures, the process of looking at and buying homes has dramatically changed. For instance, in Manhattan, some buyers tour properties sans their agents because only the seller’s agent can be on the premises. Public open houses have become scarce, and showings have become spaced out.
If you want to view a property in the flesh, as they say, you have to go through the whole drill—wear masks and gloves, show a statement of finances, sign documents stating you are clear of COVID-19 symptoms and that you release all liability. As for closing, there’s a limit to the number of people allowed to attend. But there’s an option to opt for digital closings instead.
Because of the pandemic, buying and selling homes is no longer business as usual. Changes have to be adapted to and guidelines needed to be followed to get the best deal for your property.
Meta title: Buying or Selling Homes Amid a Pandemic: Is It the Right Move?
Meta description: Are you looking into buying or selling a home? The pandemic may make you want to shelve your plans, but if you’re seriously weighing your options, here’s what you need to know.
