What Does COVID-19 Look Like for Home Buyers? Virtual Showings, Alternative Appraisals, Low-Interest Rates, & Much More
While real estate agents, buyers, and sellers were enthusiastically rearing into 2020 excited for another booming year, the COVID-19 crisis swept the globe with new rules and regulations for the real estate market to contend with. While the current economic state and stay-at-home guidelines might make buying a home a bit tricker, it certainly isn’t impossible.
Make the most of virtual showings
In-person showings aren’t completely out of the question right now, but it’s understandable for both buyers and sellers to be hesitant. You may be asked to take some additional steps before showing up in person — including taking a separate car as your agent, wearing gloves and masks, and refraining from touching anything in the home. However, real estate agents have already adapted by conducting virtual tours, digital closing tools, and remote client meetings. The safest way to buy right now is via these new, virtual methods, and they’re easy to maneuver. Talk to your real estate agent about how to tour homes for sale online and avoid in-person meetings altogether.
Understanding alternative appraisals
While the Federal Housing Finance Administration (FHFA) has relaxed standards for appraisals, they’re still necessary. Due to social distancing, self-isolation, and quarantine from the COVID-19 pandemic, on-site inspections with an appraiser will no longer be required. Many appraisers will still perform in-person inspections — taking proper precautions to do so — but if that’s not an option, there are two alternatives: desktop and hybrid appraisals.
Rest assured, both methods require sufficient research and reporting to support a defensible value conclusion. Desktop appraisals are done completely at the appraisers own desk — hence the name — by utilizing market research and competitive analysis. A hybrid appraisal uses the same resources as the desktop appraisals while also including photographs of the exterior and interior, someone else’s interior inspection notes, drive-bys of the outside, or virtual tours.
Lock in your interest rate now
There’s always a silver lining during any storm. When the Federal Reserve rate dropped to nearly zero in mid March, mortgage loan interest rates slashed as well. The good news? If you’re ready to buy now, your real estate agent, loan officer, or mortgage broker can help you secure this rate now.
However, don’t take this step lightly. Due to the economic upheaval, it might take longer to secure a mortgage loan at the moment and there may be additional hoops for you to jump through to get approved. Talk to your real estate agent for information on how to make this process easier.
What else can I do?
While the world is in the midst of a pandemic crisis, you’ll inevitably see substantial delays in the real estate closing process. Real estate agents and sellers are dealing with new COVID-19 guidelines, and real estate contracts include several new tasks that must be completed for the contract to remain valid. Do whatever you can and be proactive in order to make this process go as smoothly as possible. Streamline the underwriting for your mortgage loan, make sure you have all the documentation together, and don’t open any new lines of credit while you’re trying to buy. More importantly, be patient with your seller and real estate agent as they’re doing their best to follow these new guidelines.