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Home-Buying FAQ: Your Top Questions About Purchasing Property During the Coronavirus Pandemic

May 6, 2020

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The coronavirus pandemic has thrown millions of people’s financial plans off the rails, and that certainly includes home buying. If you were hoping to purchase a property soon, you no doubt have a lot of questions—about whether it’s possible to buy or tour a house now, COVID-19’s impact on home prices, and more.

We’re already written a guide to home buying in the age of coronavirus to help you navigate this new reality in real estate, but we know there’s a lot you still want to know. So here are the answers to your most pressing questions about buying a home right now. Whether you’re wondering what’s up with home prices or open houses, read on to learn everything you need to know.

1. Is it possible to buy a house now?

While buying a house today may be more challenging due to health and economic concerns, it is certainly possible. In fact, the U.S. Department of Homeland Security has declared that residential and commercial real estate services are an essential service that should be allowed to continue. (State orders, however, may overrule that guidance.)

Furthermore, the real estate industry has quickly adopted new technologies to help home buyers and sellers stay safe for as long as this pandemic lasts.

However, certain aspects of the home-buying process might be restricted or look a bit different these days. For instance, as COVID-19 outbreaks gained momentum, certain hard-hit states (such as New York) banned in-person home viewings. And while home closings typically involve the presence of the buyers, the sellers, their agents, and a notary, some states (such as Florida) loosened restrictions and allowed remote or “curbside” closings, where documents are slipped through car windows to lower the exposure levels of all parties involved.

Aside from federal and local restrictions, a lot will depend on the home sellers’ comfort levels. Some sellers might be fine with your touring their house. But others might not be comfortable letting strangers in their home, even if property tours are allowed in your area.

A local real estate agent will have the best handle on what home buyers can and can’t do in your area, so feel free to consult an agent for the most up-to-date information. Here’s more information to help you answer the question, “Should I buy a house now?

2. Is now a good time to buy a house, financially speaking?

From a financial perspective, there are certainly some advantages to buying a home right now. For one, mortgage interest rates are historically low, which means your monthly housing payments will be lower, too. And putting a property under contract now and locking in a low interest rate gives buyers more control than living in a rental where rents might go up.

Another big consideration on the financial side of the home-buying equation comes down to competition. The coronavirus has dissuaded some home buyers from home shopping for the time being. So buyers who do venture out face less competition, which could put them in a stronger position to negotiate with sellers.

In addition to surveying the housing market and mortgage rates in your area, you should also take a good, hard look at your personal financial situation. You’ll want to gauge whether now is a good time to buy for you. Are your job and income stable, or are you worried about layoffs or the stock market?

If your own financial future is uncertain, you might want to take more of a wait-and-see approach to home buying. Or consider buying a home well under what you can afford just in case the coming months throw you a curveball.

3. How has the coronavirus affected home prices?

The coronavirus has the world economy in turmoil. But so far at least, this does not mean that home prices have plummeted across the board or that buyers can lowball their way to a bargain. Instead, in most real estate markets, home inventory remains very tight.

“I don’t expect the slowdown to be like the last recession where prices fell,” says realtor.com chief economist Danielle Hale. “There are more than enough buyers out there to keep home sales from slowing in any major way.”

Some sellers have pulled their listings as they wait for better market conditions. On the flip side, a home seller who doesn’t have the luxury of time is facing a smaller buyer pool, due to safety concerns and limited physical access to touring homes. So buyers could have the upper hand for a short period when it comes to homeowners who need to sell.

The only way to test a seller’s level of motivation is to make an offer. But play it safe. Buyers should not assume that because of the pandemic they can automatically lowball a seller—this could turn the seller off. You might want to try offering a modest discount below asking price to simply start a dialogue.

Here’s a breakdown of how to negotiate an offer on a home in the age of coronavirus.

4. Is it safe to buy a house now?

While no one can guarantee you won’t catch the coronavirus, the real estate industry has worked to prioritize buyers’ and sellers’ health by eliminating personal interactions almost entirely during the pandemic. Even as different states reopen, you can still do most aspects of the home-buying process remotely, or at a safe social distance, when it comes to your home search that you may not have considered doing in the past.

First, you can find local real estate agents online and interview them virtually. While showings may not be easy to arrange because of shelter-in-place orders or continuing health concerns, most real estate listings now offer virtual tours.

When possible, video chats allow agents to walk through a prospective home while you watch from the safety of your current residence. Virtual tours may not be as good as walking through a home, but they can give you a good idea of whether or not you want to see the house in person when it’s possible. And it’s also a great way to pare your options and skip visiting some homes.

When it comes to the financial aspect of home buying, many lenders had already made the entire mortgage process digital long before anyone heard of social distancing.

Another new term? “Desktop appraising,” which allows the appraiser to stay home and review available data that allows lenders to approve mortgages remotely.

And in many states, drive-through or even video closings are temporarily permissible during the pandemic.

Remember, whether all of the above is available depends on your area, so always consult with your agent each step of the way. And read more on whether or not it’s safe to buy a house now.

5. Are open houses or home showings allowed?

Whether open houses are allowed in your area all comes down to how local authorities enforce their lockdowns. Under many quarantine orders, such as in Los Angeles and New York City during the height of the pandemic, open houses have been completely banned. Other states currently allow open houses as long as capacity allows for social distancing. The National Association of Realtors® offers guidelines on open houses, recommending that they be limited to fewer than 10 people, if they’re hosted at all.

In general, in areas where open houses aren’t allowed, individual home showings with just a buyer and an agent are OK. Keep in mind that even if showings are allowed, agents and home sellers must all be willing to make them happen. Check with your agent and local government for more information, and know that what’s permissible could change as this pandemic progresses.

If you do choose to attend an open house or tour a home, here’s what you can do to stay safe:

  • Don’t touch anything in someone else’s home. Ask that the owners open cabinets and closets prior to a showing.
  • Stay six 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.

Or instead of attending an open house or private tour, you can conduct a virtual house hunt. You can also drive through a neighborhood and check out the area from the safety of your car. Here’s more on how to stay safe during your house hunt.

6. Should I buy a house sight unseen?

While buying a house sight unseen has long been the only option for people relocating due to a new job or military service, the trend has been on the rise for more and more folks. In fact, according to a realtor.com survey of 1,300 consumers during the week of April 5, 24% (or 1 in 4) said they’d be willing to buy a home without seeing it in person.

Buyers who consider buying a house sight unseen generally have some comfort level with the neighborhood and know the market. And according to realtor.com senior economist George Ratiu, the comfort level of buying a house sight unseen may come down to age.

“Younger cohorts are more inclined to rely on detailed photos, virtual tours, or live video instead of an in-person visit, with 31% indicating they would be willing to buy sight unseen,” says Ratiu.

Even if you’re buying blind, you shouldn’t operate completely in the dark. Here are some features that buyers find most helpful in such a home search.

  • The ability to take a virtual tour of the home
  • Listing and neighborhood information that is accurate and detailed
  • Plentiful, high-quality listing photos that show the property’s interior and exterior
  • An agent or landlord who can walk a buyer through the property via video chat

Check out more advice on how to buy a home sight unseen before you commit to a purchase.

7. Can I buy a house if I’m unemployed?

Generally speaking, if you are recently unemployed you should think twice about buying right now. But there are some ways you can proceed, albeit with caution.

For instance, home buying is possible when you’re between jobs if you have enough money in the bank to make an all-cash offer—due to a previous home sale or inheritance—and can skip the mortgage process entirely.

If you do need a mortgage, you’ll need not only a high credit score and a low debt-to-income ratio, but also a source of funds to prove to lenders you can make your monthly mortgage payments. If you are a dual-income family with a spouse or significant other still working, that person could apply for a mortgage. Many lenders also allow for a monetary gift to home buyers from relatives. Sometimes a sizable gift satisfies lenders’ application requirements even if the borrower is currently unemployed.

Here’s more on how rising unemployment may affect the housing market.

8. How long will it take to close on a house?

Yes, the length of time from an accepted offer to home closing during the height of the pandemic is taking longer. Closing times used to average about 26 days in January, then hit 43 days in February, and shot up to 60 days in March. They’re likely to take longer still in the coming months.

The simple fact is lenders are buried under paperwork as refinancing applications skyrocketed due to the historically low mortgage interest rates.

In addition to lender backlogs, social distancing and shelter-in-place orders have complicated the home closing process. While home inspections and appraisals are possible, everything is just taking longer during the pandemic. Here’s more on the home closing process.

9. Is moving allowed right now?

According to the American Moving & Storage Association, moving has been deemed an essential service by the federal government.

Still, while moving is legal in the big picture, it might not be allowed for your specific circumstances depending on what stage of the pandemic you are in. For instance, during the height of New York City’s epidemic, some apartment buildings decided to ban residents from moving due to safety concerns and shelter-in-place orders.

Check with your local and state governments (and your HOA or condo board, if applicable) before scheduling any move. And if you have to move, read all about how to move safely during the coronavirus pandemic.

10. How can I prepare to buy a house?

You may be interested in buying a home, but simply don’t feel comfortable getting out there and house hunting right now. Luckily there are still things you can do to prepare so you’re ready to spring into action later this summer or whenever you decide you’re ready.

  • Check your credit score: The very first step in preparing to buy a home is to check your credit score. Credit scores are what mortgage lenders look at to determine whether you are creditworthy, and will dictate your interest rate. So do everything to protect your score. Many companies—from credit cards to utilities—are working with consumers who can’t make payments. If you are having trouble making payments, don’t just skip them. Call your lender and work out a plan.
  • Figure out how much home you can afford: The pandemic has roiled markets and caused tremendous economic uncertainty. So you’ll want to carefully consider how much home you can afford and err on the conservative side. Check an online home affordability calculator, which will help you determine your monthly mortgage payment.
  • Secure mortgage pre-approval: Now it’s more important than ever to get pre-approved to show sellers you’re serious when you make an offer. Pre-approval shows how much a lender will loan you, assuring the seller that you’re financially capable of buying a home.
  • Avoid any major changes: A major tenet of preparing to buy a home is to not make any major changes in your life or your finances. But with the coronavirus pandemic, some upheaval—such as getting furloughed—may be out of your control. Yet much of it is not. For instance, do not buy a car or pricey new furniture, or apply for a new credit card. All of those can lower your credit rating, meaning you may not be able to qualify for a home loan.
  • Check online listings: On real estate sites like realtor.com you can see what properties are available in your area in your price range. And take advantage of the virtual tours many agents are offering to house hunt from your couch.

For more information, check out our complete home home-buying guide in the age of coronavirus.

The post Home-Buying FAQ: Your Top Questions About Purchasing Property During the Coronavirus Pandemic appeared first on Real Estate News & Insights | realtor.com®.

Sleep On It: Why Letting Buyers Spend the Night Could Pay Off Big for Sellers

June 20, 2019

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For most buyers, thoroughly vetting a house includes opening every cabinet, driving by the neighborhood at different times of the day and night, and getting a thorough home inspection. But if a buyer close to making an offer asked to spend the night in your house, would you accommodate the request?

Well, maybe you should. Although extreme, this “try before you buy” approach can show some positive results.

The idea first took shape among buyers considering planned communities and luxury properties.

Bob Kanjian, director of sales at AV Homes, says the two 55-plus communities he sells properties in give prospective buyers the opportunity to pay a reasonable rate to stay a few nights and test-drive the community. And it works: A third of the people who participate in the sleepover showings end up purchasing a home in the community, a rate three times higher than potential buyers who don’t spend the night.

Sellers of luxury properties have also been known to cater to genuine buyers who request an overnight stay.

“On the rare occasions that I do see a request for an extended showing, the situation often involves a very high-end property and an international buyer who is trying to get a feel for the entire community as much as the home,” says Bruce Elliott, president of the Orlando Regional Realtor Association.

Part of the reason it’s relatively rare is that there are significant liability issues involved.

“With any type of sleepover showing, it’s advisable to prescreen buyers to ensure they have the financial wherewithal to purchase the property, to ensure the appropriate insurance policies are in place, and to have both parties sign a protective waiver,” Elliott says.

Still, should you get your place ready for a serious-buyer sleepover? Let’s weigh the pros and cons for the everyday seller.

Why sellers should consider sleepover showings

There are a number of things buyers can learn from spending 24 hours in a property that they wouldn’t pick up on during the day. An overnight stay would allow them to test-drive all of the amenities in your home—from the dishwasher to the rain shower in the master bath.

Concerns about night noise from roads, neighbors, or other potential sleep disruptions nearby could all be addressed during an overnight stay.

An extended showing would also allow the buyers to check out not just the home itself but also the community at large. Potential buyers could walk to a nearby park, explore the local restaurants and cafes, and experience the morning traffic.

Disadvantages of a sleepover showing

Unless there is some pressing concern that can’t be addressed in any other way, sellers may balk at a buyer’s request for an extended showing of their home. It can be a hassle to prepare the home for strangers (e.g., stashing your valuables and cleaning everything) and find a place for them to stay the night.

Allowing potential buyers to occupy your place will also cut into the number of days the home is on the market. And the more time your listing spends on the market, the less desirable it looks to typical buyers.

“Days on market is key. If you allow someone to spend the night for 24 or 48 hours, you’re limiting the exposure to other buyers,” says Dillar Schwartz, a Realtor in Austin, TX.

How do you make a sleepover showing work in your favor?

You don’t want to let just anyone spend the night in your home, so how do you make sure the test drive goes as smooth as possible?

According to Elliott, potential buyers should prove that they are serious about buying your home and have no problem signing a waiver that protects you from any liability. It’s also reasonable to ask the buyer to pay a deposit to cover potential damages.

If you’d prefer buyers to pay for their stay, the local Airbnb or VRBO rates can help you determine a reasonable price per night. Even better, if your sellers have been an Airbnb host in the past, they might be willing to go through the service again to rent you their home for a night.

Since sleepover showings are a relatively new thing, there is not really a standard procedure for setting one up. The details all depend on your comfort level, the advice of your lawyer or real estate agent about liability issues, and how far you’re willing to go to cater to a buyer.

Still, buyers make unusual requests all the time. If a sleepover is the only way to put an earnest buyer’s mind at ease, it might be worth it to put fresh sheets on the master bed and allow the sleepover in your home.

The post Sleep On It: Why Letting Buyers Spend the Night Could Pay Off Big for Sellers appeared first on Real Estate News & Insights | realtor.com®.

Are You Killing the Mood? 8 Things in Your Bedroom That Freak Out Potential Buyers

June 7, 2019
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Your house is on the market, and you’ve thrown all your energy into sprucing up its curb appeal and scrubbing your kitchen and bathrooms until they shine. So you think to yourself: The bedroom is just fine the way it is, right? After all, you made the bed!

Here’s a tip: Your bedroom is not fine the way it is.

“While your bedroom might be your private sanctuary, it is made public when your home is on the market,” says Daniele Kurzweil, a licensed real estate salesperson with the Friedman Team at Compass in New York City. “We’ve always found that the intimate nature of someone’s bedroom seems to get a reaction when the sellers don’t let their real estate agent stage it.”

And that reaction is by no means always positive.

According to the pros, here are the items in your bedroom most likely to make potential buyers run for the exit.

1. Mr. Whiskers’ litter box

Brett Ari Fischer, an associate broker at Lee & Associates Residential NYC in New York, has had buyers who were turned off because a bed wasn’t made, there were light stains on the floor, or even worse, a strong odor from a pet.

“I had a client legitimately almost throw up when she walked into a bedroom that smelled like cat urine,” Fischer recalls. “It was especially unfortunate, as the apartment was actually quite gorgeous.”

Remove any evidence of your pet before a home showing, including litter boxes, toys, and, of course pet hair. And remember: Even if you can’t smell your pet, other people can. Remove dog and cat odors before you throw open the doors for the public.

2. Boudoir photos

“I’m sure it’s fun to take saucy boudoir photos for your spouse,” says Justin Riordan, interior designer, architect and founder of the Portland, OR-based home-staging company Spade and Archer Design Agency. “But honestly, it only will evoke one of three emotions with potential home buyers: laughter, disgust, or ill-timed physical responses—none of which will help you sell your home.”

Riordan’s rule should be easy enough to follow: “Time to put that glamour shot away.”

3. Medical equipment

“I know CPAP machines keep you from suffocating in your sleep and are the absolute best for curing sleep apnea,” Riordan says of continuous positive airway pressure therapy. “However, they’re super gross for anyone that is not the user of the machine.”

Because CPAP machines—or any medical equipment, for that matter—evoke feelings of anxiety rather than inspiration, put them away prior to showings, Riordan advises.

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Watch: 5 Things You Should Definitely Hide Before Selling Your Home

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4. Sex toys

You knew this one was coming into play. Bob Gordon, a Realtor® with Berkshire Hathaway HomeServices in Boulder, CO, once worked with a home inspector who, during a routine inspection, checked under the master bedroom sink for leaks. What he found there instead? A pair of sex toys.

“He told me he sees stuff like this ‘hidden’ all too frequently,” Gordon says. “You’d think owners would understand that if they really want something out of sight, they need to get it out of the house for that day.”

5. Lotion or other lubricants

It’s not only explicit sex toys that are a problem. We know the bedroom is where the magic happens, but let’s be honest: Even a hint of sexual activity can turn off a buyer, the pros say.

For instance, “Your hands get dry sometimes, right? Mine too,” Riordan says. “However, lotion combined with a box of tissues on your nightstand connotes a whole other activity that has not a single thing to do with eczema. Put them away.”

6. Laundry

Another thing potential buyers don’t want to think about? Your grubby clothes.

But a hamper of clothes on the floor—or even neatly folded socks left out on your bed—makes that hard to do.

“It doesn’t matter if [your laundry] is dirty or clean,” Riordan says. “Other people’s laundry is downright gross. Fold it up and put it away before showings.”

7. Locks on bedroom doors

While touring a home once, Riordan spied a lock on the outside of a child’s bedroom door.

“It was very subtle, but it was more than three years ago, and we still wonder what the heck was going on there,” he says.

“If you need a lock on a bedroom, fine,” he adds. “Just make sure it locks from the inside.”

8. Mirrors (and more)

Kurzweil recalls touring a listing with a client where all was going well—until they walked into a bedroom with mirrors on the ceiling and a life-sized photo of the wife—nude—hanging above the bed.

“The agent showing us the apartment was so embarrassed, and explained that no matter what she said, the owners would not take down the photo,” Kurzweil says.

The reason? The couple “thought the wife looked ‘smoking hot’ and wanted to show off,” she says. But “my client was turned off to the idea of the apartment and could not see herself living there, no matter what the renovations.”

Kurzweil’s advice when you prep your bedroom for a showing is: Play it safe.

“You want people to walk into your bedroom and feel like they’re walking into a hotel suite at the Ritz,” she says.

The post Are You Killing the Mood? 8 Things in Your Bedroom That Freak Out Potential Buyers appeared first on Real Estate News & Insights | realtor.com®.

Home Seller Secrets: ‘The Best Home-Staging Advice I’ve Heard, Ever’

March 9, 2019

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When it comes to selling a house, appearances are everything. That’s why more and more homeowners hoping to impress buyers are investing in home staging. But between decluttering, styling, and making your house look its absolute best, this process can make you want to pull your hair out.

To make this undertaking a little easier, we asked sellers for their very best home-staging advice, and then compiled their greatest tips. If you’re getting ready to put your house on the market, use these pointers to spruce things up in a jiffy—and help buyers fall in love with your home.

Keep your home tidy 24/7

“When showing a house, I’ve learned it’s so important to keep your home tidy with all your possessions stowed away for two reasons. First, you don’t always know who’s walking through your house, and the listing agent can’t be in every room to watch your valuables. I had a brand-new bottle of Chanel perfume in one of my bathrooms, and one day I came home after a showing and it was gone. Second, a tidy house looks better. You want potential buyers to come in and see a beautiful dream home, not your clutter. You never know when a potential buyer will want a last-minute tour, so put away your dishes as soon as you’re done eating, pick up dirty clothes on the floor, and make your bed every morning.” – Jennifer Davis, homeowner in St. Louis, MO

Invest in a few trendy items

“Before showing, you should update your house with a few new, stylish pieces to make it more on-trend. Look on Pinterest to see what’s fashionable right now, or tour open homes to see how they’re staged. Then, re-create the look. Don’t worry, you can do this while being budget-friendly! When we were selling our house, we ended up investing in a few pieces—a new duvet cover, some curtains, and some wall hangings—to make our home look more like other houses that were on the market. All this stuff only cost us a couple of hundred dollars, but we got a lot of compliments on our style and, in the end, our house sold for more than we expected. Remember that spending a few hundred on décor could end up getting you thousands in the end.” – Cassidy Carr, homeowner in Provo, UT

Make your home feel like their home

“The best home-staging wisdom I’ve heard is that potential buyers need to see themselves in your home. That’s why real estate agents tell you to clear out any personal pictures you have on the walls. You don’t want buyers to think of it as your house, because it’ll make it harder for them to picture themselves living there. For that same reason, try your best not to be home when your house is being toured. If buyers see you, they’ll remember that they’re guests.

“And unless you feel very strongly about people taking their shoes off, remember that you’re moving, so it doesn’t really matter if people are tracking in dirt. When buyers are told to take their shoes off in a home, they’re reminded that someone else lives here, and it makes it harder for them to see themselves living in that house. Plus, for some people it’s awkward to walk around in their socks, and you don’t want potential buyers to feel uncomfortable.” – Anne Andrews, homeowner in San Juan Capistrano, CA

Spray a clean, simple scent

“You can absolutely kill a person’s interest by showing them a house that smells like dirty teenagers and smelly dogs. Houses need to smell fresh and clean, but shouldn’t smell like chemicals. Invest in a really good home fragrance spray with a soft scent, like lavender or fresh linen.” – Ashley Matthews, homeowner in New York, NY

Don’t try to hide your clutter

“It’s common to use the garage as a place to stash the boxes you’ve cleared out of your home for a showing. However, you still want the garage to look presentable. People want to see the entire house, so take this opportunity to clear it out. Buyers will also open closets. They’re not trying to be invasive—they just want to see how much space you have. Don’t think you can cram everything behind those doors and it’ll be invisible. People will look through everything, and when they do open closet doors, they probably won’t appreciate being met with an avalanche of stuff. In fact, it will probably make them think your house doesn’t have enough storage, and they’ll move onto the next.” – Linda Roberts, homeowner in Mission Viejo, CA

Get your pets out of the house

“The best advice I got before selling my home was to make sure that both buyers and my pets feel comfortable. Meeting someone else’s animals can be stressful. Pets might be protective of their turf, so owners should consider taking them somewhere else during showings. If you’re having an open house, bring your pet to a friend’s house for the day. If someone is coming over for a tour, take that opportunity to walk your dog. However, if you must leave your pets at home, always make sure you leave instructions on how to handle them. Give your listing agent instructions on where to put dogs if they get rowdy (like a guest room), but don’t just assume you can just put your pets in the backyard, because buyers want to see the outdoor space too.” – Leanne Logan, homeowner in Hershey, PA

The post Home Seller Secrets: ‘The Best Home-Staging Advice I’ve Heard, Ever’ appeared first on Real Estate News & Insights | realtor.com®.