Everyone knows that the pandemic will be around for the foreseeable future, and the new normal is not a choice. Life goes on, and you have to adapt, whether it is about going back to work or aligning with WFH arrangements for the long haul. You may plan a summer vacation this year, though you will have to choose the destination wisely and take relevant precautions. Moreover, it is also a good time to go ahead with your home buying plans if you had put them on hold in 2020.
But you will have some confusions and apprehensions about buying a house amid the pandemic, and these are absolutely valid. The real estate markets are still uncertain, and there is a lurking fear of an impending economic downturn. But the brighter side to the picture is that mortgage rates are running low right now, and sealing a deal will be a favorable decision at this point. If you are still dicey about going ahead with your home buying spree in the pandemic, here is a comprehensive guide to help.
Study the local real estate landscape thoroughly
Pandemic or no pandemic, no potential buyer can ignore this piece of advice. The best way to get started is by studying the local real estate landscape thoroughly so that you have a fair idea of what to expect when you dive in. The landscape is dynamic, and the pandemic has made it even more complex. There are local parameters to consider, such as the current status of the infections in your area.
States with longer lockdowns and closures have experienced a sharper impact of the pandemic than ones with fewer restrictions. The real estate rates are also affected by these factors. You can gather valuable details of the prevailing demand, supply, and price levels to understand the local conditions before you start house hunting.
Find a real estate agent you can rely on
Just as knowing the current state of the local real estate landscape is crucial, you must also find a real estate agent you can rely on. You cannot expect to drop in for showings or attend open houses in the new normal because the threat of the virus looms large. Most sellers and real estate agents are conducting private tours for potential buyers to ensure safety for everyone. It is best to collaborate with a real estate agent who understands your expectations and budgets and shows you properties that match.
You can avoid unnecessary outings and irrelevant properties by letting your agent do the hard work of matching the deals with your requirements. You can even check the listings on their site to see options online before visiting them. Seasoned realtors have high-quality images and descriptive information in their listings, so you have better chances of shortlisting ideal locations even before being there physically.
Get a mortgage pre-approval
Experts recommend getting a mortgage pre-approval even before you step out for house hunting. It was something they suggested in the pre-pandemic times, and it becomes all the more crucial amid the uncertainties of the current phase. Pre-approval means that you have a lender willing to fund the deal when you are all set. It indicates that the lender has checked your finances and creditworthiness, so mortgage approval wouldn’t be a problem when you want to buy.
Despite the money crunch, the real estate market is still tight, and multiple buyers have to compete for properties. A mortgage pre-approval puts you in a good place because sellers and agents see you as a genuine prospect serious about buying a property. There are chances that you may secure a good deal, just because the seller wants to wrap it up quickly and wants to bargain with a genuine prospect.
Be ready with the down payment
Having a mortgage pre-approval will make you a lot more comfortable about going ahead with the buying journey. But you must also be ready with funds for the down payment because they can have a significant dollar value, despite being a small percentage of the property price. Check your savings to decide whether they will be enough to pay the amount. You may not be in a position to do it right now, but it shouldn’t hinder the buying process. It is not uncommon for buyers to borrow money for a down payment, so you must arrange the funds well in time if you don’t have personal savings.
Factor the borrowing process into your timeline. Look for lenders before you start with the house-hunting process. Discuss loan process and timelines to have fair expectations and align things. You may also require paperwork for approval, so have it in place to avoid last-minute hassles. It will be a lot easier to navigate your buying journey when you have clarity and assurance about down payment funding.
Learn more about contingent deals
When you start sifting through the local listings to search homes for sale, you may see a contingent status for some homes. Don’t consider it as gone because contingent deals are still active. The status will be common these days, so you must understand what Contingent in Real Estate means. Essentially, it means that the seller has accepted an offer, but there are contingencies in place. These are conditions that either or both parties have to meet to seal the deal.
Contingencies may relate to property inspection, mortgage approval, or sale of the buyer’s old home so that they can pay for the new one. If you wish to explore the idea of buying a contingent status property, you can go ahead with the offer. There is a possibility of closing a good deal because the seller may still be willing to skip the other offer and take yours. They will have to give the original buyer a chance and if the deal does not go through, you can acquire the property you like.
Look for houses under your budget
Even as the pandemic is around, the US real estate market is tight. You can expect to compete with multiple bidders to get the home you want. It makes sense to look for properties under your budget because someone else will probably outbid you. Spending more than you can is not a good idea when an economic downturn is around the corner, and there are threats like pay cuts and job losses ahead.
Choosing properties that fall below your spending capacity will give you a margin while bidding. There are chances you may find one that matches your expectations even at a lower price point just because you explore the available options. Both ways, the choice will work in your favor.
Expand your search
The best neighborhoods have the highest price tags. It means that you may have to go beyond your budget if you have a house in a posh one in your mind. Buying in the pandemic era requires a flexible mindset, and you must be ready to give up on a dream locality to get a home within your means. If you don’t, you may end up disrupting your finances or even have to give up the idea of buying a house for now.
The other alternative is to expand your search and start looking in other areas. Consider the factors you like about the location you desire. These may range from proximity to your office, market, and schools, to being near public transportation. You may prefer an area because it is green space. Once you have the desired features in mind, it will be easy to look for alternatives with similar amenities by lower real estate prices.
Don’t stick to just one house
While you must not be rigid about the location, sticking to just one house isn’t a great idea for pandemic home buyers. It is easy to fall in love with a property and consider it as your dream home, but you may end up paying more than the worth. Moreover, there is a risk of making a bad financial decision out of desperation, which is the last thing you should do at this point. Conversely, missing out on your dream house can cause a major disappointment.
Consider taking a more flexible approach and looking for more options before you make a tempting offer. Your real estate agent can help you find second choices, which can be as good as the first one. It may work out well for you, and there’s always a possibility that you end up with something better than your dream home.
Buying your home amid the pandemic can be daunting, but you can still achieve your vision. A good understanding of the market and solid financial planning get you on the right track. Having a reliable and experienced real estate agent to guide and handhold you through the process make things a lot easier than you can imagine. It is also vital to take a more flexible approach towards choosing the property. After all, you have to make sure that it doesn’t pinch your pocket in the long run.