Tips for buying a home in the current market
As Americans across the country are sheltering at home, many home buyers are left wondering: Should I buy a home now, or wait until quarantine measures loosen and the economy picks up again?
But with mortgage rates still sitting at record lows, buyers have incentive to stay in the market. So, if you’re in the market for a house, here are some tips:
Fewer people are shopping for homes, but buyers in many cities are still facing stiff competition due to housing shortages.
“Because many sellers who planned to list this spring are holding off, inventory is even lower than it would be,” says Alicia Stoughton, a real estate agent in Cincinnati. “Make sure to work with an agent who is willing to work harder to find off-market listings.”
1. Be prepared for competition.
This is a must before you make an offer on a house. You can submit an application online or over the phone. And if you’re in a hurry, applying with an online mortgage company can help you speed through the application process.
Still, it’s worth shopping around to find a low rate. “I haven’t seen such differences among rates from lender to lender in my 35-year history of working in the mortgage business,” says Glenn Brunker
2. Get pre-approved for a loan.
of Ally Home.
Talk to several agents before choosing one. Buyers should have a video consultation with an agent to establish a human connection, says Megan Aitken, a real estate agent in Middletown, Delaware. “You want an agent who knows your needs and will advocate for you.”
3. Interview real estate agents.
Virtual home viewings and live-streamed open houses are replacing in-person showings. A survey by the National Association of Realtors found that nearly three-fourths of real estate agents said they had seen home sellers stop holding open houses.
Home buyers must adapt, says Cara Ameer, a real estate agent in Ponte Vedra Beach, Florida. “A listing of mine in midMarch went under contract purely by the video that I posted online with the list
4. Take a virtual tour.
ing.” If you tour a house in person, make sure to wear protective gear.
To close on time, consider opting for a 60day closing period instead of the more typical 30- or 45-day close, says Kevin Schatz, a loan officer at Santa Ana, California-based Caliber Home Loans. Because of the recent surge of refinance applications, your lender may need a little more time than usual to approve your loan. Also, having a longer closing gives you some flexibility when scheduling a settlement date with your title company. Some title companies are doing fewer closings because they’ve laid off or furloughed employees.
5. Choose a longer closing period.
Daniel Bortz is a contributing writer to Kiplinger’s Personal Finance magazine. For more on this and similar money topics, visit Kiplinger.com.