New Reality of Buying a Home
Posted: May, 11, 2020 | Categories: Buying a Home
Spring is upon us, which normally means a big rise in home buyers checking out new properties, but with the current COVID-19 situation, many home buyers and sellers are worried about making a move.
Others may be feeling the impacts of social distancing, stay-at-home measures, and have come to the realization that you’re not happy in the place where you’re spending most of your time, or perhaps you need to move because of a job change, end of lease, or changes to other life circumstances.
If you’re in the market for a new home, have job stability, and find a home that seems right for you, interest rates are at a historic low, so now’s actually a great time to make your move.
How to buy a new home with COVID-19 restrictions?
Needless to say, the current COVID-19 situation has changed the way people buy and sell new homes, and the situation is changing on a daily basis. Individual states have been left with the task of setting new policies and restrictive measures.
In Colorado, real estate transactions are considered an essential service, per Governor Jared Polis’ stay-at-home order, enacted in March 2020, but there are some stipulations. All essential services must be in compliance with social distance requirements and safety guidelines mandated by local and state officials.
Real estate transactions generally require in-person interactions with lots of paperwork and in-person meetings that makes it difficult for social distancing. COVID-19 has forced a digital revolution in the real estate transaction. Many processes have had to adapt from open houses, showings, appraisals, inspections and meetings at the closing table.
View your new home virtually.
In person showings and open houses are to be avoided in Colorado, as it violates the specific mandates of recently issued executive and public health orders. Needless to say, buying a new home is tricky when you’re not supposed to leave the one you already have.
If you’re in the market for a new home, and willing to do so during this time, expect to embrace digital technology. Virtual 3D tours have become the norm since the outbreak of the pandemic.
Many realtors are getting creative with how they’re showing new homes with virtual tours on Zoom or FaceTime, with the owner or realtor conducting the showing on their iPad. Some properties have online 3D photographs that capture room-by-room details of the new home.
While virtual tours are not the same as physically viewing the home, at least you get an idea of what the inside looks like.
Believe it or not, many are buying new homes without first stepping inside of them. Motivated buyers are willing to take the risk. Of course, if the pictures and/or video doesn’t match reality, you have the option to back out.
Adjusting to social distancing requirements
Real estate appraisals are considered critical services in Colorado to complete real estate transactions. In response to COVID-19, many lenders are more open to exterior-only appraisals, which provides estimates based on neighborhood data analysis and what can be observed from the street.
Other essential services include home inspections and final walkthroughs after you sign a purchase contract. To help protect both the buyer and seller, door knobs are sanitized and potential buyers are asked not to touch anything in the home that’s for sale.
Many documents in the closing process require a notary and that’s normally required to be done in-person. Colorado has adopted a temporary rule to allow Remote Online Notarization (RON). Many title companies are using these remote online notary services and some are offering drive-thru closings to home buyers.
Three factors to take into consideration with the new reality of buying a home.
If you’re in the process of looking for a new home in this new reality of COVID-19, here are three factors to consider.
#1. How long are you going to stay in the new home?
You should plan to live in your first home for at least three to five years, but if you plan on staying in your new home for less than that, look for a property where you can build value.
#2. How much can you realistically spend?
Now’s not the time to extend beyond what you can afford and hope for the best. Don’t overspend.
#3. Is the neighborhood right for you?
Look for a new home in a good school district, as they tend to hold their value better and rise faster when the local market is stronger.
Factors to consider with the new reality of moving from your old home
Given the current COVID-19 situation, pre-moving cleaning and organizing may not happen the way you’d hoped, especially if you were planning on hiring help to clean, paint or pick up donations. Many movers have changed their policies or paused their services.
Ultimately, this means that there is a greater need on your end to plan your move based on the time and resources you have available.
Now’s a great time to buy a new home.
U.S. Mortgage rates are at all-time lows right now on 30-year fixed loans and even lower for those on a 15-year fixed. This means that you can get more house for your money, or pay it off in half the time!
Low interest rates and low inventory would normally set the stage for a highly competitive spring season, but the COVID-19 pandemic has made life and markets anything but normal. Many have suspended the buying process and are being cautious and staying home. This means that as a buyer, your competition has slowed down.
But this window of opportunity won’t stay open forever. There was a housing shortage in Colorado prior to the outbreak, so the temporary impacts on the real estate market will likely rebound once policies on the stay-at-home mandate are lifted.
Questions? Contact us Today.
By Tralon Homes