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Spring is the busiest time of year for real estate. This is when space hunters and house traders come out of hibernation mode and descend into the mass market. But this year, in the age of COVID-19, is different.
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The coronavirus outbreak has rattled the economy and disrupted many industries, adding real estate. As Americans across the country seek safe haven in the home, many homebuyers are asking: Should I buy a home now or wait for quarantine measures to calm down and the economy to recover?? The same goes for dealers who wonder when they will list their home.
The real estate market is still active; The maxim states that the real estate sector is an essential activity. But the market is slowing down. In March, 5. 3 million existing homes were sold (down 8. 5% from February) and 627,000 new homes (down 15. 4%). (NAR), 90% of agents reported a decline in homebuyer interest due to coronavirus fears. In addition, 80% said they had noticed fewer homes on the market.
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“We’ve noticed that some buyers slow down the search for their home because they’ve lost a source of income or because their financial landscape has changed,” says Megan Aitken, a genuine real estate agent in Middletown, Del. “We have also noticed several merchants decide to delay the marketing of their homes because they do not want to take the risk of further exposure to the coronavirus.
The skyrocketing unemployment rate is also giving merchants pause: “A main fear for merchants right now is the threat that [buyers] will lose their source of income before closing,” says Alicia Stoughton, a designer and genuine real estate agent from Cincinnati.
But with loan rates still at record levels (the average 30-year fixed-rate loan was 3. 3% in mid-April, Mac reported), buyers have incentives to stay in the market. (Low rates have also triggered a race to refinance; see below. )
Although fewer people are buying homes, buyers in many cities still face a fierce festival due to housing shortages. “Because many merchants who were making plans to sign this spring were delayed, stocks are even lower than they would be,” Stoughton said. “Make sure you work with an agent who is willing to work harder to find listings outside the market,” he advises.
In addition, it is imperative to have prior approval before making an offer on a home. You don’t have to leave your home to get pre-approval; You can submit an application online or by phone. And if you’re in a hurry, applying for a corporate loan online can speed up the application process. For example, Quicken Loans’ Rocket Mortgage (opens in new tab) says it can approve borrowers in as little as 8 minutes.
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Still, it’s worth buying groceries to find a low rate. “I haven’t noticed such differences in rates among lenders in my 35 years in the lending industry,” says Glenn Brunker of Ally Home (opens new window).
It is also sensible to communicate with several genuine real estate agents before opting for one. Aitken recommends buyers have a video consultation with an agent to identify a human connection. “You need an agent who knows your wishes and defends you,” she says.
Virtual home tours and open houses update in-person visits. Nearly three-quarters of genuine realtors in the NAR survey said they have noticed home dealers avoiding open houses.
Homebuyers want to adapt, says Cara Ameer, a genuine real estate agent in Ponte Vedra Beach, Florida. “One of my classified ads in mid-March under contract only through the video I posted online with the ad,” he says. Scale in a home in person, be sure to wear protective gear, such as a mask and gloves.
To close on time, opt for a final 60-day era rather than the more typical 30- or 45-day closing, says Kevin Schatz, loan officer at Santa Ana, California-based Caliber Home Loans. Due to the recent construction in refinance applications, your lender may need a little more time to approve your loan than normal. Also, having a longer closing gives you some flexibility when making plans for a date according to your securities company. Some securities corporations are making fewer closures because they have laid off or laid off employees.
Home assessment protocols have also changed. Fannie Mae and Freddie Mac, the government-sponsored lending giants, have called on lenders to reduce the need for appraisers to conduct home inspections, allowing for greater flexibility for traditional in-car loan appraisals. (FHA loans require an internal appraisal. )
Home inspections are conducted without homebuyers being accompanied by the inspector, some inspectors use video chat apps to allow buyers to register for real-time remote inspection.
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If allowed in your state, do an “electronic closing,” an agreement procedure in which you sign final documents electronically.
More than ever, “what’s going to differentiate listings is how homes are presented online,” Aitken says. Professional photography and staging are essential; Without them, your online ad would possibly pale in comparison to your competitors. Most organizers charge between $150 and $600 for a two-hour consultation, then an additional $500 to $600 per month per room, according to HomeAdvisor (opens in new tab) But it will be worth it: Studies show that staged homes sell faster and more expensive than unstaged homes.
To make your home stand out, add high-tech features to your listing, such as a video or a 3D tour of your home, or drone images.
Many homebuyers still need to make a home before making an offer. “If you agree to let other people into your home, turn on all lights and leave all doors open to minimize the number of people who have to touch items. in your home,” says Ameer. For its ads, Aitken places a basket of shoe covers, latex gloves and disinfectant wipes near the front door for prospective buyers.
Finally, don’t overvalue your home. Many buyers restrict their finances and many buyers are less willing to offer homes above the list price. Many buyers are also worried about stretching their budgets, as the coronavirus may affect housing costs emerging this year.
Since the average rates for a 30-year fixed-rate loan are approaching 3%, now is a good time to consider refinancing. A refinance makes sense if your loan rate is more than one percentage point higher than existing rates. You can use the Mortgage Professor’s Refinance Calculator (opens in a new tab) to enter the main points of your current and new loan to see how long you’ll want to stay in your home to start saving money.
But don’t expect lenders to return your calls right away. In the last week of March, refinance applications increased 168% compared to a year ago, according to the Mortgage Bankers Association (opens in new window) (MBA). Lenders are taking longer to process refinances as programs ramp up and many offices are closed, which can make turnaround times longer, says Steve Kaminski, head of U. S. residential lending. UU. , at TD Bank (opens in new window).
“Because of the unprecedented volume of refinance applications we’re seeing, some lenders take more than 120 days to refinance,” says Glenn Brunker of Ally Home. Before COVID-19, he says, refinancing a loan took 40 to 45 days.
Ask lenders for a rate lock of 120 days out of the most common 30 or 60 days. Try to get a floating lock, which allows you to get a lower loan rate if rates fall for a quick period of time after your loan is approved. (Traditionally, lenders qualify for a floating loan repayment, but some would possibly be willing to forgo it in the existing climate. )
Since loan rates can vary greatly from lender to lender, Brunker strongly recommends that refinanciers get quotes from at least 3 loan companies. You may also need to wait a few months before purchasing a refinance. In a falling economy, rates will not rise and there is a smart chance they will fall further. The spread between 10-year Treasury yields and the average 30-year loan rate is higher than the previous one because, as businesses thrive, many lenders offer higher rates.
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