Questions When Buying a Home During the Covid Pandemic
What You Need to Know About Buying a Home During a Pandemic
It’s safe to say that 2020 and the pandemic has changed every aspect of our lives. Working, entertainment, seeing our families – it has all been affected by this unique and unprecedented situation – including real estate.
So, where does that leave home buyers? Not everything can come to a halt, and if you’re in the market to buy a home during this period, you might be wondering what the process might be like and what you need to know. Here are a few of the things you should be prepared for.
- Rates are at an all-time low & the market is hot
Perhaps surprisingly, the housing market is actually hot right now. So much so, that home purchases are at the highest level since 2006, according to a report from the National Association of Realtors.
Since there’s a health crisis, a recession, and the unemployment rate is growing, you’d think this would deter home buyers. The explanation why it doesn’t is simple: interest rates are at an all-time low, so everyone is rushing to secure their forever home.
That’s good news, but it can also be bad news. It’s great that interests rates are low, because that makes buying a house more affordable. You may be able to also put down a larger deposit, making things easier – and cheaper! – for you in the long-run.
On the other hand, the competition is fierce, especially for homes in the suburbs. That means you need to act fast and dedicate a lot of time to scoring your ideal place, before someone else gets to it.
- People are buying in the suburbs
As we mentioned, the hottest competition is for homes in the suburbs. As you’re probably aware, there’s been a so-called “exodus” from cities this year, due to concerns over the virus and its prevalence in cities.
It makes sense – cities are crowded, people live in close quarters, and they’re more likely to become infected. A place in the suburbs buys you space, and lots of it, and a buffer from your potentially sick neighbors.
That means two things: first, competition is intense for homes in the suburbs, so if that’s your ideal location, then you need to act fast and get ready to get into bidding wars. Second, it might actually be worth looking at a place in the city.
While the virus is a threat right now, you’re purchasing this home as a long-term investment. The virus won’t be around forever, but cities most certainly will. This time next year, you’ll be glad you scored a more affordable home in the city. It may very well be your only chance to do so.
- Home viewing is a little different
Understandably, safety rules include social distancing, so home viewing can be a tricky situation. Open houses are not exactly the norm this year, but if you do still need to do a viewing, there are some options that will still allow you to do it safely.
- Viewing homes over video
The solution you may have seen others choose is to “view” the homes online, through video. The video of the home is usually posted online. Alternatively, the realtor does the walkthrough in the new home and records it, or video calls you and shows you the home. This is not an ideal way to view a home, but it’s safe, and it’s better than picking a home based on pictures alone.
- Viewing homes alone
The other option people are doing is visiting with their realtor, but only doing the walkthrough one at a time. Because of social distancing rules, several people from different households may not be allowed inside the home at the same time.
So, you might be in a situation where you may need to view the house, wait outside for the realtor to also view it, and then discuss outside, where it’s safe. It’s a pretty good compromise that favors safety, but still allows you to go through the proper process.
- Buyer priorities have shifted
The other thing that’s hot on buyers’ list? Seamless remote work amenities – in the suburbs. That most people look for space in their new homes is not a secret, but the pandemic has turned that from a desire into a requirement for a lot of buyers.
With everyone working from home this year and next year – or perhaps even long-term – most buyers want at least an extra room they can dedicate to a workspace or home office. Chances are you are looking for the same thing, in which case, get ready to pay more for what you want. Single-family home with 3 to 4 bedrooms are getting snatched up quick.
Stable, reliable internet connections are also a concern. If you’re going to be moving to the suburbs and work from home long-term, the last thing you want is to move into an area that gets spotty internet coverage. Michigan luckily benefits from pretty good access, but if that’s important to you, then you need to prioritize it. If you get stuck somewhere with poor services, there’s no telling when you’ll be able to solve that.
- Inspection & appraisal may not be as thorough
Unfortunately, social distancing rules and an overall concern for safety may also mean you won’t be allowed to attend the inspection and appraisal. Moreover, the appraisal may not be done in a traditional way at all. Instead, the solution seems to be to perform a drive-by appraisal and rely on other similar homes in the neighborhood to judge your home by.
Understandably, this can create some feelings of anxiety and uncertainty, because buyers often feel that their potential home hasn’t had the thorough investigation it would normally have, which may lead to problems being overlooked and discovered later down the line. However, in absence of alternative options, buyers must simply accept this fact and the potential risk if they want to purchase at this time.
Bottom line
Like everything else in 2020, buying a home during a pandemic is different, and not always easy. While the basic process is still the same, you have to be aware of a lot of aspects that are shifting, from priorities to interest rates, and even some essential parts of the process, like viewings and inspections.
Buying a home during a pandemic may require you to compromise on some things, so if you’re not ready to do that, you may consider sitting it out until this situation has passed. If you decide to move forward, at least you’re fully informed on what awaits you.
Tom Stachler is a state of Michigan Licensed Broker selling homes and condo in the Ann Arbor, Saline, Dexter, Chelsea, Ypsilanti and Milan and surrounding area real estate markets. Call us today to get information about your home value or finding your dream home . Use Tom's 30+ years of experience to successfully negotiate and transaction today.
