The Sum Up: How to handle a real estate deal in a pandemic

If you’ve been planning to buy a home in 2020, you might be wondering if it’s practical – or even possible – to do it now that the COVID-19 pandemic is creating economic and personal turmoil all over the country.

We always speak the truth to our Addition Financial members. A recent CNN story caught our attention because it contains some advice for people who are house shopping now. Here’s what you need to know.

The State of the Real Estate Market

Spring is normally a very busy time for real estate, with lots of activity among sellers and buyers. Experts are already noting that the spring of 2020 will not be a typical real estate season.

Some sellers have decided to pull their homes off the market. Some buyers have suspended their search for a new home – and some have even pulled out of deals at the last minute due to economic uncertainty.

That said, there are still deals happening. Some lenders are working with buyers and sellers to schedule remote closings, allowing transactions to take place even in these days of social distancing.

Considerations for Buyers and Sellers

The primary thing we want our Addition Financial members to know is that there is no “one size fits all” answer in the current environment. Here are some things to keep in mind.

1. Mortgage rates are low and are likely to remain low for some time.
2. If you feel the potential benefits outweigh the risks, you can still list your home and show it. Of course, if you are still living in your home, you may want to be cautious about allowing potentially infected people to enter.
3. Technology makes many things possible, including touring listed homes on sites like Zillow and even conducting a virtual closing.
4. If you’re worried about losing your job – or you already have – then it probably makes sense to hold off on any big changes in your living situation unless you’re sure you can afford them.
5. Some elements of a closing may not be possible with social distancing. For example, a home inspection must take place in person, and notaries must witness signatures in person.
6. This is a good time to refinance, particularly if you have a variable rate mortgage.

We suggest weighing the risks and rewards before deciding what to do.

Pre-Approval May Be the Solution

There may be a way to take advantage of low mortgage rates without putting yourself or your loved ones at risk.

Mortgage pre-approvals can be done remotely. In most cases, pre-approvals are good for anywhere from 90 to 180 days, depending on the circumstances and your mortgage lender’s requirements.

For some families, the best option will be to contact their credit union or bank and work through the pre-approval process now, while rates are low. We don’t know yet when life will return to normal, but a pre-approval now will set you up to buy a home quickly when the crisis is over.

This spring is likely to bring an atypical real estate season, but there are still opportunities for first-time and repeat homebuyers – and people looking to refinance their existing homes.

Need help with mortgage pre-approval or refinancing? Click here to read about Addition Financial’s flexible mortgage options now.