COVID-19 Will Change How We Buy & Sell Real Estate and Here’s How
The world of real estate has changed and if this isn’t your first time to the rodeo, this is how differently you can expect real estate to be.
If you’ve bought or sold a house in the past, you might remember that there were a lot of in-person activities. You’d meet with your real estate agent. You’d walk through the houses you were interested in buying. You may have accompanied the home inspector during the inspection. Then, of course, you’ll chat with the sellers, seller’s agents, title company, and more at closing.
That’s a lot of people! Unfortunately, the coronavirus pandemic has changed all of that. What once was a very personal experience now is a hands-off sort of deal.
Let’s take a look at how the pandemic has changed how real estate transactions are carried out with the help of HomeLight’s Q2 2020 report.
Social distancing aside, trying to schedule a time to see houses can be arduous at best because you have to find a time that works for everyone. Virtual tours and showings simplifies this because the agent can walk through the house with the client on FaceTime or Zoom. The potential buyer can ask the agent questions during the tour and the agent will be able to answer in real time.
Let’s say the buyer wants to see how big the closet is in the master bedroom. The agent can go into the closet and give them a 360-degree look. Once these tours are over, the agent then can post the recorded tour on the property’s website for other potential buyers to view.
In the past, when closing day finally came, everyone involved with the transaction would schlep documents and important paperwork to the designated office – if everyone can agree to a time to mee that is. They’d sit around a table, listen as the agent would go over the terms of the contract in close proximity, and sign on the dotted lines. Yet, due to the pandemic and social distancing orders in place, real estate agents have had to think on their toes to figure out a safe solution.
Cue digital closings.
75% of real estate agents have chosen digital closings as their go-to for finalizing the deal on the contracts. To get the signatures, agents send documents through email, DotLoop or other similar programs. The recipients would then sign the papers by using a program like DocuSign.
Stricter lending requirements
As you can imagine, banks are quite apprehensive about lending money amid the pandemic. With over 30 million Americans having lost their job due to business closings, furloughs, and cut backs, people who once qualified for mortgages now may not.
Lending companies are tightening their purse strings and are requiring buyers to have a higher down payment and credit score, proof of long-term employment and the ability to repay the loan. Then you may come across lenders who impost a debt-to-income or loan-to-value overlay (you can read more about overlays here).
Embrace the new world of real estate transactions
Real estate during the best of times can be complicated, but when you factor in the hurdles that the coronavirus has tossed into the mix… Well, it’s downright intimidating, especially when you factor in social distancing guidelines.
Fortunately, when you work with a top-rated real estate agent, they’ll walk you through the process. They’ll be able to help you find the house of your dreams safely and they’ll explain what mortgage companies are looking for. With a little bit of ingenuity, your agent will become your new best friend!