The recent health pandemic has changed a lot of things. Despite all this, life goes on, and we still have to make big life decisions. Some of us might be looking to purchase a house. This can be challenging because several factors have led to our current seller’s market. At first, sellers responded to COVID by removing their properties to reduce the days on market stigma. Only 6% of homes being sold held open houses during the first week of July. This is down from 16% from the year prior. Things changed when the Federal Reserve dropped interest rates drastically to help the economy. Buyers could spend more on houses than before, and there was a massive push to move away from urban areas. Demand increased, but supply did not. Auction prices and total sales began breaking records.
You can’t hesitate when buying real estate in the current climate. It’s important to move quickly and be ready to bid on a house, sometimes without even seeing the property in person. Agents are putting virtual and video tours online now for bidders to comply with social distancing rules.
Don’t Skip Due Diligence
When there are so many bidders, it’s tempting to try to make your offer the most attractive. One way to do this is by skipping due diligence. For example, let’s say the inspection reveals that significant repairs are needed but you chose to not investigate further. Or the title search finds liens on the property. Other contingencies might be factors, such as selling your present house before the closing date. The more variables you have, the more risk, hassle, and time the buyer has to go through. This is why sellers often choose all-cash offers, even if they’re lower.
Before taking a sharpie and crossing out your contingencies, consider other options. Maybe you could shorten the inspection period. If you’re using an FHA loan, consider using another option as FHA loans are slow.
Work With a Lender
There are millions of homeowners in mortgage forbearance now. Lenders are spooked and are making applicants jump through more hoops. This means more paperwork to demonstrate your financial stability. If you can afford it, increase the down payment to the maximum. Get back to the staff as soon as possible with the paperwork they request, as they might have more for you to retrieve.