It is a well-known fact that the U.S. economy is struggling to recover from economic damages caused by Covid-19, however, the real estate market is actually doing fine! Low mortgage rates have pushed the real estate market, and properties are selling rapidly with pretty good deals.
As an example, the Twin Cities, Minneapolis, and St. Paul, are selling homes as fast as 23 days on average, five times faster compared to previous years. Plus, 90% of homes have been selling above the listing price since purchasers are able to pay more for a property while keeping their monthly payments manageable.
If you are considering to purchase real estate during coronavirus, here is what to expect:
1. Estate is moving rapidly
In spite of coronavirus, properties are selling fast, and if your home is looking spotless and priced well you can expect to have a sale by the first week on the market.
Virtual showings are a popular technique for agents and homeowners to showcase properties to potential buyers, and if a buyer is interested in seeing a home, appointments can be scheduled for an in-person showing.
As a helpful tip, be ready with a lender that can do a quick closing, within 10 days. Nowadays, eClosings are very popular, this tool allows buyers, sellers, and other parties involved to use an electronic signature on settlement documents, avoiding in-person meetings.
Also, a pre-inspection can be handy and lead to a faster closing. Before the pandemic, buyers used to accompany the inspector during the home inspection, now, things have changed, and inspectors are utilizing virtual calls to do so, and accomplish social distancing.
2. Competition is ON!
If you are about to buy a home, expect strong competition, especially in spring and summer. If there are several offers the listing agent will do a second round, therefore, making the best offer the first time might not be as smart.
A property that is priced in coherence with comparable ones and is move-in ready will sell for 5% over the asking price. An underpriced estate with a great location can be sold for 10% over the asking price or even more.
In addition, since there are lots of competition, some buyers will have to bid higher, that is why it is recommended to look at homes that are slightly under your price range.
3. Tip: Sell your own property first!
Homebuyers have greater chances of scoring a new home, as long as there isn't a property they have to sell first. That is why it is highly recommended to sell your property first and then move on to purchasing a new one, if possible. Think of ways to do that, for instance, you can rent a small apartment in the meantime or have a clause in your selling contract in which you state the moving out date.
4. Get our loan pre-approved ASAP
Having a loan pre-approved means that you have a "pre-underwritten" loan looked at by a lender, the loan application has been reviewed before negotiating with a home seller and having a contract. Usually, it takes place, after a homebuyer puts in an offer.
5. Try to put down as much money as you can
If it is within your possibilities, put down as much money as you can, 20% at the least, this will make your offer more attractive to a seller. It also applies to earnest money, negotiation is all it takes, don't be afraid to play all your cards if you really like a home and are determined to make it yours!
The coronavirus hasn't completely slowed down the real estate market, it has made it evolve!