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What It’s Like To Be a Real Estate Agent During the Coronavirus Pandemic

April 24, 2020

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With entire states ordered to stay at home amid the coronavirus pandemic—and things like open houses and in-person showings considered major health risks—the business of buying and selling houses is not what it was just a short time ago.

The federal government considers real estate an essential business, but several states, whose mandates take precedence, have categorized it as nonessential. In either scenario, real estate agents have had to find new ways to do their jobs.

We reached out to agents around the country to find out how they’re doing their jobs differently in these unsettled times.

The real No. 1 challenge for agents

You may think the biggest challenge to selling a house during a pandemic would be getting the buyer in the house, but Amy Berglund, real estate associate with Re/Max Professionals in Denver, says that’s not the case.

“The biggest challenge has been projecting and encouraging a sense of calm for our clients,” she says. “Real estate deals are still happening, closings are happening, and multiple offers in some price points are still happening. We are closing deals—we just need the public to have confidence in that.”

Different attitudes toward showing—and staging—homes

In some locations, in-person showings are still happening, but that doesn’t mean business as usual.

Gina Guajardo, broker at Sterling & Johnston in Seattle, says she uses video walk-throughs to eliminate in-person showings for people who aren’t serious buyers.

“I’m doing this for buyers’ and sellers’ health,” she says. “I want showings only from interested buyers; this is not the time for lookers.”

Before the coronavirus, homeowners were encouraged to stage homes for showings and open houses so they felt lived-in. Recently, however, that policy has been turned upside down, says Katie Witry, a real estate agent and owner of Witry Collective in New Orleans.

“Homes that are vacant are easier to show, inspect, and eventually sell,” she explains. “However, homes that are occupied are being shown on a case-by-case basis.”

When in-person showings do happen, they require extensive precautions.

“I’m suiting up in a mask and disposable gloves to show property,” says Lara Cox, a Realtor® in Las Vegas. She’s also “using a disinfectant wipe to open doors, turn on light switches, and open blinds” while inside clients’ homes.

But Washington, DC, real estate agent Karen Szala notes that when clients wear masks, it’s difficult to get a good sense of their reaction to a property.

“So much of what we do as real estate agents is reading reactions and asking questions about those facial expressions when they first see a property in person,” she says.

The pros and cons of virtual tours

Traditionally, homeowners have had little to do with house tours—their only job has been to leave the premises so that real estate agents could take over.

Juan P. Rojas of JPR International Real Estate in Miami says that has all changed now that residents have been ordered to stay at home.

“We can coordinate to show a property virtually, by simply hosting a Zoom meeting where the owner is in essence the videographer and gives the buyer a live tour of the property,” he explains. “It’s been pretty exciting!”

Jo Ann Bauer, a Realtor® with the Ozer Group in Scottsdale, AZ, notes that while virtual tours are convenient for both buyer and seller, “the drawback is, people want to experience a home and how it feels, and that can be very challenging for buyers on a virtual tour.”

Some sellers are waiting it out

A house that’s been on the market too long has “gone stale” in real estate terms, which tends to have a negative impact on its appeal—and the seller’s negotiating power.

In a time when buyers are reluctant to shop for homes, more and more homes are at risk for this, but real estate agent Tomer Fridman of Compass in Los Angeles has found a way to combat that.

“We are holding off on launching new listings on the MLS and networking them off-market through our personal sphere and social media channels,” he explains. “No one wants the days on market to date a property unnecessarily, and agents looking for their buyers are aware to look at properties coming soon and on hold.”

In other areas, though, the problem is a lack of inventory.

Nancy Brook, broker and CEO of Billings Best Real Estate in Montana, says her area doesn’t have enough homes for sale in the median price range.

“With interest rates still low, buyers are ready to buy if they can find the right house,” she says. “Some sellers are either withdrawing their listing or waiting to list.”

Relationship maintenance mode

Real estate is a business based on relationships, and many real estate agents are just working on maintaining those relationships right now.

“I honestly haven’t been thinking about deals and haven’t been pushing clients to buy or sell. My main focus is reaching out to clients, friends, and family on a human level to check and see how they are doing and not discuss business,” says New York City broker Philip Scheinfeld.

Closing on homes without getting too close

Typical closings consist of buyers, sellers, and their agents meeting in a room with a title clerk. Understandably, that can’t happen right now, so agencies are getting creative.

“My title company partners have helped us by instituting drive-up closings where all parties remain in their car and title clerks in Tyvek suits go car to car, safely securing signatures and completing the home sale,” explains Dave Marcolla, principal of the Dave Marcolla Group at Keller Williams Real Estate in Newtown, PA.

A new outlook on ‘home’

The coronavirus pandemic is making huge changes to how business is done right now, but Ed Kaminsky, licensed real estate agent at Strand Hill in Manhattan Beach, CA, says its effect on what people are looking for in a home will be long-lasting.

“I do believe globally people will be looking at ‘home’ much differently for at least a generation or two,” he says. “A home now is not just a place to eat dinner and sleep, but it potentially is your office, your home gym, your children’s school, your play center, your place of rest, your place of worship. Home has taken on a whole different meaning, and choosing one that meets all of those needs is more important than ever before.”

The post What It’s Like To Be a Real Estate Agent During the Coronavirus Pandemic appeared first on Real Estate News & Insights | realtor.com®.

8 Ways To Test-Drive a Neighborhood While Sheltering in Place

April 21, 2020

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When you’re in the market for a new place to live, finding the right neighborhood is everything. But in our current state, with shelter-in-place orders in full effect in many areas (and mere common sense limiting people’s excursions), scoping out a new neighborhood can be a little more challenging. But with some online detective work and the right tools, you can learn a lot about a neighborhood without leaving your home.

That’s because you’re not the first one to consider buying a home without being able to pound the pavement personally.

“As buyer’s agents, we will often shoot video of the neighborhood and/or home for our out-of-area clients,” says Katie Wethman, a real estate agent with the Wethman Group at Keller Williams in McLean, VA. “We also have video streaming apps like FaceTime, Skype, and Zoom to bring them with us.”

Even though you won’t be able to pop in to a local coffee shop or take a leisurely stroll down Main Street, exploring a neighborhood in the time of coronavirus is possible. So let your fingers do the walking—on your laptop—and get to digging. Here’s how to start your research.

1. Check out neighborhood publications and local social media

An active neighborhood community will sometimes have a print publication or local social media groups that connect residents. These can provide information on local events and activities that will give you a better feel for the neighborhood. For example, Carlsbad, CA, has a local publication called Carlsbad Magazine, which covers all of the cultural happenings in North San Diego County, as well as a Facebook page.

Browse Facebook, Twitter, and Instagram for groups or accounts that document what’s going on in the neighborhood where you’re interested in moving. You can even interact with locals in the community who can give you their opinions of their locale.

2. Take a walk with Google

Want to take a stroll around your potential new neighborhood without leaving the couch?

“Google Street View is a great way to ‘walk’ the street and neighborhood virtually,” says Wethman.

Every listing on realtor.com features a link to the Google Street View for that address.

realtor.com street view
Take a look at the Google Street View on realtor.com.

realtor.com

Another way to access Google Street View is to go to google.com/maps, type in the address of the house you’re interested in, and click on the photo of the property in the menu to the left of the map. If Google Street View is available for that address, you should be able to click and drag the image to move down the street.

“Search engines like Google also let you filter for videos when you search the neighborhood name,” says Wethman. “Try adding ‘review’ to your search terms, and also ‘neighborhood association’ or ‘homeowners association’ for better results.”

3. Browse websites with neighborhood data

You want to gather as much information as possible on your next neighborhood, and there are a lot of websites that can help you do that.

City-Data provides detailed city profiles about everything from cost of living to weather to average home prices, and its forums give useful insight from community locals.

Plug in your ZIP code at AreaVibes to get a livability score and help narrow down the best places to live.

Yelp provides not only reviews on local cafes, restaurants, and nightlife, but also unfiltered reviews from local residents.

4. Search other real estate listings

To learn about the typical architectural styles and ages of homes in a neighborhood, browse online listings on sites like realtor.com. Is the neighborhood full of ’50s ranch homes or hundred-year-old Victorians? Looking at the homes for sale will clue you in.

5. Call a real estate agent

It’s also a good idea to get in touch with a tech-savvy real estate agent—and these days, that’s most of them.

“A real estate agent can help by using technology to test-drive the neighborhood for you. This can easily be done by making a video of the neighborhood and sharing it with you,” says John Myers, a real estate agent with Myers & Myers Real Estate in Albuquerque, NM.

Myers says he has helped a lady from New York City purchase a home in Albuquerque by using a video calling app called Duo.

If you’ve identified a home you’re interested in, contact the listing agent for more information about the neighborhood. The pro will be sure to have an insider’s perspective on the area and extensive knowledge on homes there.

6. Investigate schools and educational data

Relocating with your family? Then you will want to research schools in the area. A good resource is GreatSchools, which provides data on K-12 schools and reviews from parents. Areas with great schools typically maintain property values, and its neighborhoods are highly coveted.

And if you want to research education statistics, U.S. News & World Report has rankings of high schools with data on more than 23,000 public high schools in all 50 states.

7. Check crime rates

Safety is a priority for both buyers and renters, and crime rates can give you a picture of how safe or dangerous a neighborhood is. Low crime rates are not only safer but can also help keep property values high.

Websites such as CrimeReports can provide crime data from law enforcement agencies.

To see if there are registered sex offenders living nearby, type the address of your potential new home in the National Sex Offender Registry’s online search tool.

8. Plan your daily commute

Wethman also suggests getting a feel for the neighborhood by monitoring traffic and your potential work commute.

“I recommend people ‘test-drive’ the commute using commuting tools that predict traffic like Waze or Google Maps,” says Wethman.

These tools will predict the level of traffic during your commute hours and give you an idea of how long it’ll take to get to work. Realtor.com also offers a similar commute time feature on every home listing.

The post 8 Ways To Test-Drive a Neighborhood While Sheltering in Place appeared first on Real Estate News & Insights | realtor.com®.

How To Negotiate an Offer on a Home in the Age of Coronavirus

April 9, 2020

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The real estate market—and daily life—has been completely upended in just a few weeks. Yet maybe in spite of it all, you’ve managed to find a home you love and are ready to make an offer. Congratulations! But as you hover on the brink of what is potentially the biggest investment of your life, amid a global crisis, you may be feeling a fair amount of uncertainty.

We’re here to help you navigate this step with a new series, “Home Buying in the Age of Coronavirus.” Our third installment aims to help you answer the question: “How do I negotiate an offer right now?” It’ll also help you figure out how to get your offer to the closing table.

Here is everything you need to know about getting from offer to closing during the coronavirus pandemic.

How low can you go?

So how much can you lowball? Not as much as you would think.

“Banks have rolled out mortgage forbearance programs, so most sellers are not in immediate danger of losing their home, even if they just lost their job or their income has been significantly cut,” says Caleb Liu, who flips homes in Southern California with HouseSimplySold.com. “Other sellers have opted to pull their listings and wait for better market conditions, so inventory remains tight.”

On the other hand, a home seller who doesn’t have the luxury of time is facing a smaller buyer pool, due to stay-at-home orders and concerns about buying a home based on what may only amount to a virtual tour. So buyers could have the upper hand for a short time when it comes to homeowners who need to sell.

“Here in the Phoenix and Scottsdale region it’s still a very strong seller’s market with a low inventory of homes,” says Jo Ann Bauer, an agent with the Ozer Group Coldwell Banker Realty. “However, I think nervous sellers are going to be more open to price adjustments and negotiating with buyers, so there is room for buyers to be more aggressive in their offer price.”

Still, buyers should not assume that because we are in a pandemic they can automatically lowball a seller. Sellers may be more willing, however, to entertain offers on the lower end.

“While I’m not seeing lowball offers, I am seeing sellers—who may have held out for potential better offers if we were not in this crisis—quick to take offers they receive and get officially under contract,” adds Julia Henson, a real estate professional in Springfield, MO.

The only way to test a seller’s level of motivation is to make an offer, says John Grimes, an agent in Atlanta. But play it safe.

“Just remember that most sellers that don’t absolutely need to sell would rather not engage with a buyer that is seeking to take advantage of the situation,” says Grimes, who advises offering a modest discount of 3% to 5% below asking price to start a dialogue.

Be prepared for a longer closing

Ordinarily, once your offer is accepted, it’s a straight line to closing. In the age of coronavirus, that journey is more of a zigzag. That means buyers need to prepare for potential delays.

This is due to the health and safety concerns of appraisers, home inspectors, and repair contractors. They are adjusting their guidelines and availability, which can slow the transaction. (Many of these professionals are quickly adapting to doing their work remotely when possible.)

“Buyers may need to embrace a longer transaction process by setting the closing date out further than the typical 30 days,” advises Bauer.

She also recommends adding contingencies in the contract for the in-person viewing of the property.

“By anticipating a potential delay upfront and writing an extension into the contract, buyers can have a little more peace of mind in this uncertain time,” she says.

Ensure you have a mortgage commitment

Securing financing may be the biggest challenge right now, so make sure you have a mortgage commitment letter when you make an offer. This is a more detailed document than a pre-approval and, as the name implies, represents a firm commitment from your lender.

“Banks are issuing fewer loans in order to conserve cash to offset the imminent delinquencies,” says John Castle, an agent with Keller Williams Integrity Realty in Ottawa, Ontario. “Many buyers believe they have secured financing when, in reality, their lender may have only conditionally approved their loan.”

And many lenders are tightening up their terms and conditions. Minimum credit scores and required cash reserves have risen to new levels, making it difficult for many buyers to qualify.

Make sure your lender is staying on top of the fast-changing mortgage industry, says Nathan Claire, an agent at Momentum Realty in Jacksonville, FL.

“But as long as the buyer can qualify for whatever financing they are seeking to acquire, there shouldn’t be any issue with achieving a successful close,” Claire says.

Just don’t be afraid to over-communicate during this time.

“Make sure you touch base with your lender preferably every day, or at least every other day,” says Liu. “The credit markets are shifting rapidly.”

And if you have the funds, all-cash offers are even more desirable to sellers during this time, as they allow buyers to close on the home more quickly than an offer contingent on financing.

The post How To Negotiate an Offer on a Home in the Age of Coronavirus appeared first on Real Estate News & Insights | realtor.com®.

How To Conduct a Virtual House Hunt That’s As Good As the Real Thing

April 8, 2020

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If you’ve been thinking about buying a home for a while, you may have marked your calendar back in the winter to start your house hunt right about now. After all, spring typically kicks off the busiest home-buying period of the year. But what a difference a few months make! Now, the coronavirus pandemic probably has you worried about how to safely check out homes without risking infection.

Our new series, “Home Buying in the Age of Coronavirus,” aims to help you stay safe if you want to continue your home search, because now may just be the perfect time to buy.

“For buyers that are in typically lower-inventory, high-priced markets, there has never been a more opportune time to take advantage of favorable interest rates and less competition,” says Cara Ameer, an agent with Coldwell Banker who is licensed in California and Florida.

So if you are in a position to buy, the third installment of our series explains how to conduct a virtual house hunt and how to protect yourself if you do visit a home in person.

Learn how to read an online listing and find out what it’s hiding

“My advice to buyers is to parse listing photos to determine whether something is a good enough candidate to consider a more in-depth tour,” says Kate Ziegler, a real estate professional with Arborview Realty in Boston.

An agent will help you get into the nitty-gritty of an online listing. But here are some red flags to look for as you click through pictures that may not always show the true details of a property:

  • Are there more photos of the exterior than the interior? The inside might need work.
  • Closed curtains and blinds in a photo are usually hiding a bad view.
  • If a picture of a bathroom focuses on a sink, it can mean the bathroom is painfully small.
  • If photos look stretched out, the seller or agent is trying to make a room appear bigger.
  • Some listing terms are red flags as well. A “fixer-upper” can mean a great investment or a money pit, and “cozy” generally means the home is small.

Squeeze the most out of virtual tours

The real estate industry is adapting quickly to the coronavirus outbreak, with many agents adding video tours to their listing photos. (Look for the virtual tour icon on the bottom of the listing page.)

“If you’re interested in a property with a video, ask the agent if they have more footage,” advises Ryan Serhant of Nest Seekers & Bravo’s “Million Dollar Listing New York.”

Sometimes parts of the house are left on the editing room floor to keep the video short and dynamic.

You can also make a FaceTime (audio and visual) call during which your agent walks through a home, sharing footage of the features. You can also direct your agent to show you what you want to see and uncover any blind spots in the original video.

“In order to get the most out of a virtual home tour, buyers should ask their agent to emphasize the little details, like the finishes after a renovation or crown molding on a ceiling,” says Nikita Idiri, licensed real estate salesperson at New York’s Elegran.

Buyers should also have a floor plan of the space handy to help with determining how big a room is or how high the ceilings are.

Dig into disclosures

If you like a home from the photos and the virtual tour, ask your agent for the seller disclosure. This should outline any known problems with the home’s structure, as well as the age of various features and any improvements.

“Sometimes buyers will find out things about the house that help them to decide whether to move forward or rule it out,” says Maggie Wells of Keller Williams in Lexington, KY. “For example, the roof and the HVAC system may be at the end of their lives or there could be some sort of structural deficiency.”

Take precautions if you visit a home

If you are interested in a property and the seller will allow you to tour it, consult with your agent to ensure that visiting a home is allowed in your city or state. Many shelter-in-place orders prohibit nonessential workers from conducting business. Federal guidelines identify real estate as an essential business, but states have the final word, so the actual regulations vary and can change.

“If my buyer clients request to schedule an in-person showing, I accommodate it as best I can while taking every step to protect them,” says Wells.

First, verify with the listing agent that no one in the household is sick. But since you can’t know if anyone living in the seller’s home has asymptomatic coronavirus, take all necessary precautions to protect yourself and follow CDC guidelines. Ask the seller to leave all closet doors and kitchen cabinets open for you, to minimize the need to touch handles. Here are more tips you can take to protect yourself:

  • Don’t touch anything in someone else’s home.
  • Stay 6 feet away from your real estate agent at all times. If the home is small, ask your agent to open the front door for you and wait in the kitchen while you tour the house on your own. You can ask questions via cellphone as you look around.
  • Wear protective booties; agents generally provide these even in normal times. Carefully throw them away when you’ve finished touring.
  • Wash your hands thoroughly with soap after you leave the home.

Accept that you may not be able to visit a home

Showing protocols are changing quickly, and many companies have started to prohibit in-person home tours altogether for the time being.

“Also, many sellers may not be comfortable showing their homes during this time,” says Ameer. That doesn’t mean you’re at the end of the road, as you can buy a home sight unseen.

Is it risky to buy a home when you can’t tour the inside? Yes, but it happened frequently under certain circumstances even before the coronavirus.

“I do absolutely believe that buyers will consider buying ‘physically sight unseen’ if they have some comfort level with the neighborhood,” says Ameer, who recently had a listing go under contract by out-of-state buyers, on the strength of a video she posted. “Especially those buyers that have been in the market for a while or started to seriously search prior to the virus pandemic hitting.” That’s because after cruising enough open houses, buyers know what ticks their boxes when the right property comes along.

If you live near a home, you can certainly drive up and walk the home’s exterior with permission from the listing agent and home seller.

And if you’re truly nervous about buying sight unseen, consult a real estate attorney.

“Attorneys are working to draft necessary legal language, including relevant force majeure clauses, into the purchase contracts to protect the buyer,” says Teresa Alessandro, licensed real estate salesperson at New York’s Elegran. A force majeure clause allows a party to back out of a contract under specified circumstances that cannot be controlled (such as a pandemic).

If you really want to see a home with your own eyes, focus on vacant ones or new construction, since those are usually available to see even if your real estate professional hasn’t been deemed an essential worker.

Don’t forget to check out the neighborhood

Remember, the surrounding neighborhood is just as important as the house itself. So do a virtual deep dive on Google Earth to see if the home you’re interested in is near schools, shopping centers, restaurants, parks, and public transportation. Our interactive neighborhood maps are another great resource.

“You can also do a physical drive-by of the neighborhood without actually entering anything,” says Caleb Liu of HouseSimplySold.com. “You’ll want to survey the quality of the roads, and if there are any freeways or power lines nearby.”

There are some things you still want to be able to see with your own eyes.

The post How To Conduct a Virtual House Hunt That’s As Good As the Real Thing appeared first on Real Estate News & Insights | realtor.com®.

Is It Safe To House Hunt During the Coronavirus Crisis? This Is What You Must Know

April 8, 2020

Is It Safe To House Hunt During the Coronavirus Crisis? An Essential Guide

Sisoje/Getty Images

In the best of times, shopping for a house is a complicated and involved process—a big-ticket proposition involving lots of shopping around and meeting a ton of people so you’re 100% sure you’ve picked the right place, at the right price. But, of course, these are not the best of times.

Now that the coronavirus pandemic has people across the country hunkering down at home to lower their exposure levels, even the most determined home buyer might be wondering: Is it safe to shop for a house right now?

We’re here to help you navigate this time of uncertainty and instability with this second installment of our new series, “Home Buying in the Age of Coronavirus.”

While risk is a personal decision, the real estate industry is adapting to provide ways to go about home buying safely during the coronavirus pandemic. You can now do many things at a safe social distance, or even remotely, when it comes to buying a home that you may not have considered doing in the past.

Here are all the ways in-person checkpoints to buying a home have changed to keep you safe during the coronavirus pandemic.

Finding the right real estate agent

When it comes to buying a home, pairing up with the right agent is always key to finding your perfect property. But today, you need one who is tech-savvy and comfortable conducting meetings and business online.

“Zoom, Google Hangouts, and other tools allow buyers to have consultations they would normally have in person with me from the comfort of their home,” says agent Maggie Wells of Keller Williams in Greater Lexington, KY.

To find an agent to further help you remotely, ask candidates if they offer virtual consultations and home tours. They should also be able to help you with e-signature apps so you can send and receive documents to sign digitally through email.

“If an agent doesn’t offer these services yet, I highly recommend finding an agent who is [comfortable] working with technology,” adds Wells.

Virtual home tours

Crowded open houses with a plate of cookies for everyone to grab are a thing of the past—at least for now. Instead, you’ve got virtual open houses and video tours.

There are several ways to virtually tour a home. Along with photos, many listings were already starting to incorporate videos or virtual reality tours. (For example, the listing for this house in Ponte Vedra Beach, FL, features a VR icon you can click on, which will take you to a video.) You’ll be able to tour the home, room by room, without physically stepping onto the property.

“The power of video cannot be underestimated at a time like this,” says Cara Ameer, an agent with Coldwell Banker who is licensed in California and Florida.

However, these videos are filmed and edited, so you may not be able to see every nook and cranny. If you want to do a deeper dive, many agents will accommodate you.

“I’ve been giving live FaceTime tours of homes,” says Wells. “This provides buyers a personalized experience of the property without having to leave their home.”

Granted, we’re not necessarily saying you should buy a house without seeing it in person, unless there’s no choice in the matter. Nonetheless, it’s smart to do what you can remotely to whittle down your options so you can choose what’s worth an in-person visit, now or later.

Also keep in mind that in late March, the U.S. Department of Homeland Security declared residential real estate sales an “essential service,” although certain state officials, including New York Gov. Andrew Cuomo, have explicitly forbidden home showings. And even if they are allowed, agents, home sellers, and buyers must all be willing to make them happen.

When in doubt, check with your agent and local government for more information, and know that things could change as this pandemic progresses.

Remote mortgage pre-approval

“One smart way to stay safe right now is to work with a loan officer who is set up to work remotely,” says Andrina Valdes, executive sales leader and chief operating officer of Cornerstone Home Lending in San Antonio.

Some lenders had already made the entire mortgage process digital long before social distancing was needed. And now, many more have jumped on board out of necessity.

The first step is to interview a few loan officers over the phone or by video chat. Since mortgage interest rates are all over the map these days, it’s extremely important to shop around and compare what they’re offering—and make sure they’re comfortable conducting all steps of the transaction online.

Ideally you want a lender that allows you to track your loan progress, view educational resources, and stay in touch, all without leaving the house.

In order to get pre-approved for a loan, the lender will need to review your income, debt, credit history, and other factors—and you’ll need to submit paperwork verifying all of the above.

Luckily, most of this paperwork should be available online, such as pay stubs, tax returns, and bank statements. If you’re unsure how to access them, a tech-savvy lender should be able to help. (Here’s more on the paperwork needed for mortgage pre-approval, and why getting pre-approved matters.)

Check out realtor.com/mortgage to find local lenders and to figure out how much home you can afford.

Remote home inspections

“We are offering clients the option of doing a remote inspection, where we inspect the house alone and review the findings with them via a videoconference,” says certified home Inspector Welmoed Sisson of Inspections by Bob in Maryland and author of “101 Things You Don’t Want in Your Home.”

At a remote home inspection, inspectors take a lot more pictures than they might have in the past so clients can get a good idea of where the issues are.

“We also take videos if the issue is something moving that shouldn’t, such as a loose handrail or wobbly toilet,” adds Sisson. “While we’re in the house, we use gloves, wash our hands, and wipe down things we touch with antiseptic cloths.”

Once the report is completed, Sisson sets up a video call and emails clients PDFs of background information about why inspectors test what they do.

“Through screen sharing, I go through a slideshow of the pictures, answering questions as we go,” says Sisson.

Virtual home appraisals

Home appraisals required by a lender generally include a site visit, which is not possible in some parts of the country where this is not considered an essential service. Luckily, appraisals pertain only to those getting loans, so cash buyers can skip this process entirely. But if you are getting a mortgage, fear not.

“In the last few weeks, we’ve seen an influx of virtual appraisals done via video as well as ‘desktop appraising,’ where the appraiser reviews available public and private data,” says Nikita Idiri, a licensed real estate salesperson at New York’s Elegran.

The appraiser then uses comparable properties for the reports. While these methods may not be to the penny in terms of value, they are relatively accurate and allow lenders to continue operating.

Remote home closings

In-person home closings—where all parties come together to sign contracts, swap keys, and shake hands—are, for the most part, not happening right now (especially the shaking hands part). However, most closings require some face-to-face interaction, since people have to sign documents and notaries need to stamp them in person.

So while home buyers will probably have to show up on closing day, it will look far different from the past.

Lynn “Ginger” Ruckman, real estate associate broker at Julia B. Fee Sotheby’s International Realty in Bronxville, NY, recently closed on a home at the buyer’s attorney’s office. But instead of everyone crowding into a room for hours, parties sat in separate rooms to finalize the deal.

“The sellers and I were in the reception area, and the buyers were in the conference room,” says Ruckman. “The title company shuffled papers back and forth, and the entire process took 23 minutes.”

Another agent in Ruckman’s office had a closing where all parties showed up on the street where one of the attorneys lived.

“Papers were delivered to the appropriate cars for signatures,” explains Ruckman. “Everyone had their own pen, and the intermediary wore gloves. It got done without a hitch.”

And soon closings may be entirely remote, with states such as Georgia announcing that, as of March 31, video closings are temporarily permissible.

“The approval just happened, so nobody has done it yet,” says Georgia attorney Ken Luther. “But this is my understanding of how it would work: The closing attorney would send links to all necessary parties for a secure videoconference. All parties would sign electronically, and the transaction would be witnessed and notarized by conference participants.”

The post Is It Safe To House Hunt During the Coronavirus Crisis? This Is What You Must Know appeared first on Real Estate News & Insights | realtor.com®.

Is It Safe To House Hunt During the Coronavirus Crisis? An Essential Guide

April 7, 2020

Is It Safe To House Hunt During the Coronavirus Crisis? An Essential Guide

Sisoje/Getty Images

In the best of times, shopping for a house is a complicated and involved process—a big-ticket proposition involving lots of shopping around and meeting a ton of people so you’re 100% sure you’ve picked the right place, at the right price. But, of course, these are not the best of times.

Now that the coronavirus pandemic has people across the country hunkering down at home to lower their exposure levels, even the most determined home buyer might be wondering: Is it safe to shop for a house right now?

We’re here to help you navigate this time of uncertainty and instability with this second installment of our new series, “Home Buying in the Age of Coronavirus.”

While risk is a personal decision, the real estate industry is adapting to provide ways to go about home buying safely during the coronavirus pandemic. You can now do many things at a safe social distance, or even remotely, when it comes to buying a home that you may not have considered doing in the past.

Here are all the ways in-person checkpoints to buying a home have changed to keep you safe during the coronavirus pandemic.

Finding the right real estate agent

When it comes to buying a home, pairing up with the right agent is always key to finding your perfect property. But today, you need one who is tech-savvy and comfortable conducting meetings and business online.

“Zoom, Google Hangouts, and other tools allow buyers to have consultations they would normally have in person with me from the comfort of their home,” says agent Maggie Wells of Keller Williams in Greater Lexington, KY.

To find an agent to further help you remotely, ask candidates if they offer virtual consultations and home tours. They should also be able to help you with e-signature apps so you can send and receive documents to sign digitally through email.

“If an agent doesn’t offer these services yet, I highly recommend finding an agent who is [comfortable] working with technology,” adds Wells.

Virtual home tours

Crowded open houses with a plate of cookies for everyone to grab are a thing of the past—at least for now. Instead, you’ve got virtual open houses and video tours.

There are several ways to virtually tour a home. Along with photos, many listings were already starting to incorporate videos or virtual reality tours. (For example, the listing for this house in Ponte Vedra Beach, FL, features a VR icon you can click on, which will take you to a video.) You’ll be able to tour the home, room by room, without physically stepping onto the property.

“The power of video cannot be underestimated at a time like this,” says Cara Ameer, an agent with Coldwell Banker who is licensed in California and Florida.

However, these videos are filmed and edited, so you may not be able to see every nook and cranny. If you want to do a deeper dive, many agents will accommodate you.

“I’ve been giving live FaceTime tours of homes,” says Wells. “This provides buyers a personalized experience of the property without having to leave their home.”

Granted, we’re not necessarily saying you should buy a house without seeing it in person, unless there’s no choice in the matter. Nonetheless, it’s smart to do what you can remotely to whittle down your options so you can choose what’s worth an in-person visit, now or later.

Also keep in mind that in late March, the U.S. Department of Homeland Security declared residential real estate sales an “essential service,” although certain state officials, including New York Gov. Andrew Cuomo, have explicitly forbidden home showings. And even if they are allowed, agents, home sellers, and buyers must all be willing to make them happen.

When in doubt, check with your agent and local government for more information, and know that things could change as this pandemic progresses.

Remote mortgage pre-approval

“One smart way to stay safe right now is to work with a loan officer who is set up to work remotely,” says Andrina Valdes, executive sales leader and chief operating officer of Cornerstone Home Lending in San Antonio.

Some lenders had already made the entire mortgage process digital long before social distancing was needed. And now, many more have jumped on board out of necessity.

The first step is to interview a few loan officers over the phone or by video chat. Since mortgage interest rates are all over the map these days, it’s extremely important to shop around and compare what they’re offering—and make sure they’re comfortable conducting all steps of the transaction online.

Ideally you want a lender that allows you to track your loan progress, view educational resources, and stay in touch, all without leaving the house.

In order to get pre-approved for a loan, the lender will need to review your income, debt, credit history, and other factors—and you’ll need to submit paperwork verifying all of the above.

Luckily, most of this paperwork should be available online, such as pay stubs, tax returns, and bank statements. If you’re unsure how to access them, a tech-savvy lender should be able to help. (Here’s more on the paperwork needed for mortgage pre-approval, and why getting pre-approved matters.)

Check out realtor.com/mortgage to find local lenders and to figure out how much home you can afford.

Remote home inspections

“We are offering clients the option of doing a remote inspection, where we inspect the house alone and review the findings with them via a videoconference,” says certified home Inspector Welmoed Sisson of Inspections by Bob in Maryland and author of “101 Things You Don’t Want in Your Home.”

At a remote home inspection, inspectors take a lot more pictures than they might have in the past so clients can get a good idea of where the issues are.

“We also take videos if the issue is something moving that shouldn’t, such as a loose handrail or wobbly toilet,” adds Sisson. “While we’re in the house, we use gloves, wash our hands, and wipe down things we touch with antiseptic cloths.”

Once the report is completed, Sisson sets up a video call and emails clients PDFs of background information about why inspectors test what they do.

“Through screen sharing, I go through a slideshow of the pictures, answering questions as we go,” says Sisson.

Virtual home appraisals

Home appraisals required by a lender generally include a site visit, which is not possible in some parts of the country where this is not considered an essential service. Luckily, appraisals pertain only to those getting loans, so cash buyers can skip this process entirely. But if you are getting a mortgage, fear not.

“In the last few weeks, we’ve seen an influx of virtual appraisals done via video as well as ‘desktop appraising,’ where the appraiser reviews available public and private data,” says Nikita Idiri, a licensed real estate salesperson at New York’s Elegran.

The appraiser then uses comparable properties for the reports. While these methods may not be to the penny in terms of value, they are relatively accurate and allow lenders to continue operating.

Remote home closings

In-person home closings—where all parties come together to sign contracts, swap keys, and shake hands—are, for the most part, not happening right now (especially the shaking hands part). However, most closings require some face-to-face interaction, since people have to sign documents and notaries need to stamp them in person.

So while home buyers will probably have to show up on closing day, it will look far different from the past.

Lynn “Ginger” Ruckman, real estate associate broker at Julia B. Fee Sotheby’s International Realty in Bronxville, NY, recently closed on a home at the buyer’s attorney’s office. But instead of everyone crowding into a room for hours, parties sat in separate rooms to finalize the deal.

“The sellers and I were in the reception area, and the buyers were in the conference room,” says Ruckman. “The title company shuffled papers back and forth, and the entire process took 23 minutes.”

Another agent in Ruckman’s office had a closing where all parties showed up on the street where one of the attorneys lived.

“Papers were delivered to the appropriate cars for signatures,” explains Ruckman. “Everyone had their own pen, and the intermediary wore gloves. It got done without a hitch.”

And soon closings may be entirely remote, with states such as Georgia announcing that, as of March 31, video closings are temporarily permissible.

“The approval just happened, so nobody has done it yet,” says Georgia attorney Ken Luther. “But this is my understanding of how it would work: The closing attorney would send links to all necessary parties for a secure videoconference. All parties would sign electronically, and the transaction would be witnessed and notarized by conference participants.”

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Should I Buy a House During the Coronavirus Crisis? An Essential Guide

April 6, 2020

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Spring is upon us, which typically involves a big peak of home buyers checking out properties, negotiating, and closing on new places. But the coronavirus outbreak—with its quarantine measures and economic uncertainties—has many a real estate shopper wondering: Should I buy a home now, or wait?

We’re here to help you navigate this confusing new normal with this series, “Home Buying in the Age of Coronavirus.”

This first installment aims to help you figure out whether you can—and should—shop for a home right now, or hold off until this crisis blows over. Read on for some honest answers that will help you decide what to do.

The impact of the coronavirus on the housing market

So what state is the housing market in right now, anyway? While that depends on how bad an outbreak an area is suffering, most markets are feeling some sort of hit.

“The coronavirus is leading to fewer home buyers searching in the marketplace, as well as some listings being delayed,” says Lawrence Yun, chief economist for the National Association of Realtors®.

The latest NAR Flash Survey: Economic Pulse, conducted on March 16 and 17, found that 48% of real estate agents have noticed a decrease in buyer interest attributable to the coronavirus outbreak.

However, nearly an equal number of members (45%) said that they believe lower-than-average mortgage rates are tempting buyers to shop around anyway, without any significant overall change in buyer behavior.

For those who are determined to buy a home, there is opportunity out there.

“This is the best buyer’s market I have ever seen in my career,” says Ryan Serhant of Nest Seekers and Bravo’s “Million Dollar Listing New York.”

“Sellers are nervous, there’s excess supply, and interest rates have been hovering at historic lows. You can own a home for less per month than you can rent an equivalent property in most areas,” he adds.

With fewer home buyers out there looking, you have less competition in your way.

“Unmotivated and uncommitted buyers have dropped off,” adds Maggie Wells, a real estate professional in Lexington, KY. “Less competition is a huge leg up in this market.”

The window of opportunity for buyers won’t stay open wide forever. NAR data shows that there was a housing shortage prior to the outbreak.

“The temporary softening of the real estate market will likely be followed by a strong rebound, once the quarantine is lifted,” says Yun.

This pent-up demand could eventually push home prices higher. That could mean that the time to strike for bargains is now.

Bottom line: If social distancing has made you realize you don’t love the place where you’re currently spending most of your time, it’s a good time to consider buying.

How the housing industry has adapted to keep buyers safe

Although it’s a scary time to be out and about checking out real estate, it is still possible to do so and stay relatively safe. The industry has rapidly adapted, introducing approaches that minimize exposure to the virus.

For instance, many agents are now working remotely and conducting most of their business virtually.

“Buyer and seller consultations have transitioned to virtual meetings with success,” says Kate Ziegler, a real estate agent with Arborview Realty in Boston.

While open houses or showings may not be easy to arrange because of quarantine or other safety issues, real estate listings have stepped up to the plate by offering virtual tours.

“We can send clients videos of whatever properties they want to see, or we are happy to have our agents FaceTime from a property,” says Leslie Turner of Maison Real Estate in Charleston, SC.

While those who are immunocompromised may want to stay home, if you’re otherwise healthy, it is also still possible to see some homes in person in some parts of the country. You’ll want to take some precautions before you go.

“Hand sanitizer at the door has become the norm, as well as shoe covers, even on sunny days,” says Ziegler.

During the tour, it’s also now customary for the listing agent to open all doors, so that home buyers can explore closets and other enclosed spaces without touching anything as they look.

If you do make an offer that’s accepted and you head to the closing table, real estate agents and attorneys are also adapting to remote closings, to keep you out of a crowded conference room. (We’ll provide more information about virtual tours and remote closings in later installments.)

How to weigh economic concerns

Coronavirus aside, anyone thinking about buying a home is also likely to be weighing whether it’s a smart idea when the economy is in a downward spiral. But in the same way you can’t easily time a stock purchase to make a profit, you can’t easily time a home purchase, either.

“Recession or not, it’s impossible to time the market, whether for buying stock or buying real estate,” says Roger Ma, a New York–based financial planner and owner of lifelaidout.

Just keep in mind that while current market conditions offer an incredible opportunity for home buyers to lock in historically low interest rates for a mortgage, rates are actually going up quickly, because so many people are refinancing.

If you wait too long to buy, you may miss the money-saving boat. So make sure to read up on the latest mortgage rates first.

Besides mortgage rates, home buyers are probably wondering about the stability of their income, as fear of layoffs loom.

“We are entering uncharted territory,” says Michael Zschunke, a real estate agent in Scottsdale, AZ.

On the flip side, putting a property under contract now and locking in a low interest rate gives a buyer some control at a time of relative uncertainty, adds Turner.

The takeaway from all this? It matters more than ever to get pre-approved for a mortgage, to calculate your home-buying budget accurately.

If you’re worried about layoffs, you should buy a home well under budget so you have enough money left over for closing costs, home maintenance, and a rainy day fund. Now is the time to crunch your numbers more carefully than ever before. Below is what you need to consider.

  • Research ways to reduce your closing costs. For instance, many loans allow sellers to contribute up to 6% of the sale price to the buyer as a closing-cost credit.
  • Figure out how much you need to set aside for yearly home maintenance and repairs. A smart budget is to have between 1% and 4% of the purchase price of your home.
  • Be sure to put aside an emergency nest egg for unexpected repairs. On average, it’s a good idea to sock away 1% to 3% of a home’s value in cash reserves.

In our next installment, we’ll explore all the ways to conduct a house hunt safely. Stay tuned! In the meantime, here’s more on buying a home during a recession.

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Is Now the Right Time To Buy an Investment Property? How Low Rates Can Help Investors Increase Their Buying Power

March 19, 2020

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With all the upheaval caused by the coronavirus pandemic, now might not seem like the best time to buy any type of real estate, much less an investment property or second home. But don’t rule out the idea completely.

“With historic low rates, it is a good time to consider investing in real estate,” says Victoria Shtainer, a real estate agent and expert at Compass in New York. “Low rates give you more buying power, and we have been negotiating amazing deals for our buyers.”

Mortgage rates are expected to drop again after the Federal Reserve’s recent rate slash, which was intended to protect against the economic impact of the pandemic. That means that it may be time for buyers to consider an investment property. Here are some reasons to go for it.

Why people are considering buying

The lowest interest rates in nearly 50 years, and the potential for a recession, which could lower home prices, have attracted the attention of buyers.

“Given the current volatility in the stock market, investors are reassessing asset allocations in their portfolio, and considering how real estate may fit into this from an asset allocation standpoint,” says Shtainer.

She says the current environment, with low rates and a good selection of inventory, has given investors the upper hand in negotiations.

“More people are looking to real estate as their next investment, because of the potential for both appreciation and cash flow,” says Jennifer Anderson, of Anderson Coastal Group in San Diego. “It’s also a real, tangible item that can provide more control than other forms of investment.”

Benefits of buying an investment property

An investment property can be a valuable asset and a good way to generate passive income, and it might also provide tax write-offs and incentives that you wouldn’t get on other instruments, experts say.

“We always recommend speaking to your qualified tax adviser on your particular situation,” says Shtainer. “However, generally speaking, there can be tax benefits to owning an investment property. This can be via the tax benefits that mortgages provide, as well as the IRS’ treatment of your investment/vacation home, depending on how you rent it out.”

Anderson says that holding a property with the potential for appreciation and cash flow is a huge advantage of buying an investment property. It also diversifies your investment portfolio and protects your net worth while the market goes up and down.

Precautions to take before buying

Buyers should prepare, however, for the possibility of a prolonged economic shutdown. If you’re buying a property that doesn’t currently have tenants, it might be a while before you can find any.

That’s why the most important thing to have on hand before you buy an investment property is cash, says Nick Clements, general manager of Mortgages at LendingTree.

He says that because investment property owners will be responsible for repairs and maintenance, for tenants not paying rent on time, or for the time that might elapse between tenants, they need cash to cushion any bumps in the road.

He also advises buyers to research the appropriate legal vehicle, typically an LLC, with sufficient insurance in place.

“I strongly encourage an umbrella insurance policy. If a tenant gets hurt in your property and decides to sue, you will want to ensure you have the right structure and insurance in place,” says Clements.

To get a better sense of how much rent you might be able to collect, Anderson recommends reaching out to commercial real estate brokerages in the area and asking for historical rental rates for the last 10 years.

“That can give you a good snapshot on how market recessions or booms could impact your earnings or property value,” she says.

How to determine affordability

You don’t have to be a millionaire to invest in property or a second home. To determine whether you are ready to buy, Clements recommends asking yourself two questions.

“Are you cash-flow positive, and could you handle six months without receiving rent? If you can’t answer yes to both of those questions, now is probably not the right time to buy an investment property,” he says.

Shtainer says that buyers should be prudent, just as they would be with their primary residence. She advises that if you’re not buying the property in cash and will need financing, you should make sure you get pre-approved.

Pre-approval will tell you how much the lender is willing to give you for the purchase of your second home.

“Understanding your budget and sticking to it is very important, especially when making an investment,” says Shtainer.

She says that buyers should do their due diligence to ascertain what they can afford, and she suggests they partner with a broker in their market to make sure they are purchasing a property at a favorable market value.

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What You Need To Know If You Inherit Real Estate

March 17, 2020

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If you inherit a house, or any other kind of property, you may feel as if you’ve been thrown into the deep end of real estate ownership. Not only must you deal with the loss of a loved one, but you’ll also have to wade through the legal and financial repercussions of inheriting a home. While this isn’t a rare situation, being a real estate beneficiary has a lot of moving parts.

So, if you do find yourself in this position, you’ll need to take some specific steps. We spoke to experts who explained exactly what you’ll need to do if you inherit real estate.

Step 1: Meet with a probate attorney

When you learn that you have inherited a property, you should first meet with a probate attorney to determine who has assumed the various rights and responsibilities associated with the property. Doing so will help you assess the full picture of what you’ve inherited.

“Find out if there’s back taxes, liens, HOA dues, or other liabilities you’ll be assuming,” says Nate Smoyer, director of marketing at Avail. “Find out if there are any specific covenants regarding the property and its future use.”

Step 2: Hire a property inspector

Experts recommend treating inherited property as you would a real estate purchase. Before buying a house, you would have it inspected. You should do the same with a home you inherit.

“This usually costs between $400 [and] $600, but it could save you a lot of headache,” says Smoyer. “Oftentimes, a real estate agent can be a great source for finding a recommended inspector.”

Step 3: Find out what obligations, if any, are attached to the property

Ideally, the inherited property will be paid off, but that may not be the case. Real estate attorney Adam Gutin says that making yourself aware of any obligations on the property—including mortgage payments—is key.

“When a person inherits property, they are naturally going to want to know how much it is worth,” he says.

“However, the other question she should ask promptly is whether there are any ongoing or imminent obligations that need to be performed with respect to the property, such as payment of assessments or property taxes, or landlord-related obligations.”

In many cases, a family member or representative from the estate will have these answers. If they don’t, the person who inherited the property can hire professionals to help, for example, a real estate broker, property manager, or real estate attorney.

“If you inherit real estate that is subject to a mortgage, it really depends on the terms of the loan documents,” Gutin says.

“The first question is whether the death of the borrower triggers a default under the loan documents or a requirement for the loan to be immediately repaid. If the beneficiary wants to keep the property, then they need to consider whether they have the ability to pay off the loan or whether they have the credit to refinance the property.”

Step 4: Decide whether to sell or keep the property.

Once you have all of the information above, you’ll be ready to decide what to do with the inherited property.

“Determine the property’s current market value for both renting it and selling it,” Smoyer says. “Inheriting a property can give you a significant boost in building long-term wealth. It may be tempting to sell off, but consider the long-term cash-flow potentials if you were to rent it out. Talk through your options with a trusted local real estate agent.”

In most cases, experts say, people who inherit real estate ultimately opt to sell.

Terrence Freeman, an attorney with the South Florida firm Nason Yeager, says that’s because many beneficiaries don’t want to take the time and money to maintain the property.

“Most people who inherit property either aren’t local to the property, or don’t have the time, money, know-how, or desire to jump into real estate as a business, or to keep up a vacation home,” he says.

How do you know if you should sell the property or keep it as a rental?

Here are a list of factors to consider when deciding whether to sell or rent an inherited property.

  • Is your property located in a buyer’s market? If so, hold on to the property as a rental until the market improves, Smoyer advises. You might even consider renting the home out for the long run, because rentals can have significant value. You can use free rental calculators to help to determine whether keeping the property makes financial sense.
  • Is there growth potential? Do your research on the surrounding market, Smoyer says. “Does the property have appealing features, and is it in a location desired by renters?”
  • What level of involvement is realistic for you? Property managers have a lot of responsibilities, including maintaining the property and making sure that your tenant is happy. You’ll need to factor that into your decision.
  • “If you hire a manager to oversee the rental, you’ll likely end up paying so much money in management fees that it makes the investment not worth it,” Smoyer says.
  • Do you own any assets? Real estate can be a valuable asset, so keeping it for the long term might be worth it. Plus, if it comes down to it, you have the option to live in it (unlike stocks).
  • How much money can you make off a rental vs. selling? “While selling right away can be tempting, you should consider the long-term value of the property,” Smoyer says. Try to determine how much money you can make off monthly rent payments (minus expenses) over the time you want to keep the property. “Very often, you’ll find that you can make more money over time by renting the property out.”

 

What should you do if you inherited a property with other people?

In some cases, several people inherit a property jointly in a will. If this happens, you’ll have three basic options. First, you can keep the property and own it together. Second, one person can buy the other(s) out and take full ownership. Finally, you can sell it and split the profits.

Usually, experts agree, the third option will prevail.

“Voluntary partnerships are complicated enough,” Bob Kaufman, a real estate attorney at Fischel Kahn, explains. “Partnerships imposed upon people through inheritance are even less likely to succeed.”

If you do decide to keep the property jointly, Gutin recommends putting an agreement in writing to clearly state each person’s respective obligations and rights to the property.

In the end, as in all real estate transactions, deciding what to do with inherited property requires a decent amount of time and careful consideration, in order to make sure that you make the right financial decision.

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Should You Buy a Home If a Recession Is Imminent? Answers Ahead

March 16, 2020

Should You Buy a Home If a Recession May Hit? Answers Ahead

AndreyPopov/Getty Images; realtor.com

Between the coronavirus pandemic and a plummeting stock market, many may wonder: Are we headed for a recession? Anyone hoping to buy a home anytime soon would probably like to know the answer before committing to a major, long-term purchase.

While economists say that the odds of a recession are uncertain, evidence does suggest that, at the very least, economic growth is substantially slowing, says George Ratiu, senior economist for realtor.com®.

The International Monetary Fund downgraded its global economic growth predictions, oil market battles and COVID-19 fears are roiling the stock market, and trade wars with China, European countries, and others are still possible.

And if you believe in self-fulfilling prophecies, consider this: According to a realtor.com survey of consumer sentiment conducted in late 2019—before the coronavirus news broke—more than 30% of Americans had already expected to see a recession in 2020. Plus, 56% said they would postpone buying a home until the economy improves.

“With expectations of slower growth, I think consumers are internalizing that, and possibly taking a longer look at their purchasing decisions,” Ratiu says.

Yet that same survey also found that 44% plan to continue their house hunt, which experts say may make sense for many.

“Recession or not, it’s impossible to time the market, whether for buying stock or buying real estate,” points out Roger Ma, a New York–based financial planner and owner of lifelaidout.

And considering that mortgage rates recently plummeted to their lowest level in nearly 50 years, the time may still be right for those who have their finances in order.

“Instead of trying to time the market, make sure that the timing is right for your own personal situation,” Ma says.

Here are six questions to ask yourself to determine if buying a home while a possible recession looms is the right decision for you.

How much do I have saved?

A high savings account balance usually puts you in a good position to buy the home you want. But, it’s even more important during a recession, when the job market may be unstable, Ma says.

So how much should you have saved? Ma recommends having 20% of a home’s price in the bank for a down payment, about 4% to 6% extra for closing costs, and enough to cover three to six months of living expenses in case of an emergency.

What kind of financing will I qualify for?

Getting pre-approved for a mortgage is an essential first step in buying a home. The better your credit score, the more likely you’ll lock in a mortgage with a low interest rate and good terms, Ma says.

Lenders will vary in what they consider an acceptable credit score, but generally a score of 750 to 850 is considered excellent, 700 to 749 good, and 650 to 699 fair.

Also make sure that your monthly mortgage payment is manageable, generally below 28% of your gross income, Ma said.

If you’re in good financial standing, current mortgage trends offer an advantage to buy a house now, Ratiu says, with mortgage interest rates remaining at historic lows just above 3%. So it may pay to strike now before they start going up!

How will home prices be affected by a recession?

During a recession, home prices may drop—or at least not go up too much. This could mean that if a recession happens soon, any property purchase you make now might dip in value. Likewise, if you wait and purchase in the midst of a recession, you could stand to snag a deal.

So should you wait? Perhaps, although one argument against waiting is that housing inventory remains low, Ratiu says.

As such, “even if there is an economic slowdown, we will see much more modest price reductions,” says Fiona Petrie, executive vice president and managing director of Re/Max Integra. “At the end of the day, it is always a good time to buy, if you can afford to buy a home.”

The only bad time to buy a home, recession or not, Petrie says, is when you buy beyond your financial means. Get a handle on your financial situation, and you’ll know how much home you can afford.

What’s my time horizon?

Time horizon is another important factor to consider. This refers to how long you plan to stay in the home to ensure that the purchase is a solid, long-term investment.

Homeowners these days tend to stay in their homes longer than in the past, around 13 years, according to the National Association of Home Builders. But, Ma says, staying in a home at least five to seven years is a good time horizon.

The longer you plan to live in the home, the better if a recession hits, Ratiu says. Years later, the economic situation may be improved.

“Over a longer time horizon, housing tends do fairly well,” he explains. “If the buyers are ready, in a good financial and economic position, it’s as good a time to buy as any.”

How healthy is my local economy?

Along with your own financial health, consider the economic health of the city or town where you plan to buy, Ratiu says. During a recession, not all locations experience the economic slowdown at the same rate or in the same way.

Look back at the severe 2008–09 recession, he says. Larger cities felt an immediate impact, while others didn’t see the effects until a couple of years later.

“For buyers it’s important to consider what their local market conditions look like,” Ratiu says. “Is the economy well-diversified? Is employment strong? Is the outlook for jobs positive, and why? Because those definitely are strong drivers of housing demand and health.”

Real estate agents can run a local market analysis for you, Petrie says. Evaluate sales within 30 to 60 days during a recession to see if prices are similar or not. This can help you gauge what will happen with local housing if another recession hits.

Do I really even want to buy a home?

Even if you can afford the home and plan to stay there a while, make sure you also have sufficient cash to fund all the other things you want to do, like going on vacation, buying a car, or saving for a child’s education.

Ma urges potential home buyers to assess whether they truly want to buy a home—and how it may affect their overall lifestyle.

“Most of us only have so much cash and ongoing cash flow from our salary, but there’s a lot of different things we want to do,” he says. “Where does buying a home fit in that goal priority set? I think it makes sense to take a step back and say, ‘How important is this to me versus these other goals that I have set for myself?’”

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