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Common Changes You Will See When Buying a Home During The Pandemic


Are you ready to buy a home? Whether you’re a first-time or repeat home buyer, you’ll quickly find that a lot has changed with the home buying process amid a global pandemic.

When comparing data from April 2020 with information from April 2019, it shows that the percentage of new home listings decreased by 40%.

If you are hunting for a new house, it’s still possible to find what you need. With that said, it’s good to prepare for the impact of COVID-19 on the housing market. Here are seven common changes you’ll see when buying a home during the pandemic.

1. You May Need to Go Alone

If you’ve bought a home before, you know that there are sometimes many steps involved in this process. With that in mind, the global pandemic now impacts almost every step of the process needed to close a home.

In the past, you would often touch base with inspectors, notaries, real estate agents, and many other people. Now, people are trying to limit physical interactions wherever possible. 

If you’re used to doing everything with your partner, prepare to attend certain meetings by yourself to limit human interaction. Sellers are also getting used to doing things by themselves like creating a flat fee listing, which you can find out more about here.

2. You May Need a Higher Credit Score

Another hurdle many buyers are dealing with is tighter restrictions for borrowers. With a global pandemic happening, some people are on the verge of losing their jobs, and many people’s budgets are becoming tighter by the day.

For example, you’ll now need a minimum credit score of 580 to qualify for an FHA loan. This number is up from the previous 500 credit score requirement.

If new credit score minimums are excluding you from buying a home, prepare yourself to spend more time finding a lender that can work with you.

3. You’ll Probably Have Fewer Options

In life, it’s important to have lots of options. Considering that buying a home is a major investment for most people, they want to have choices when looking for a house. But don’t expect lots of options when buying a home in 2020.

The main reason you’ll have fewer options is that many people are either waiting to sell their homes or were selling their homes but took them off of the market. The New York Times reports that there are 38% fewer homes on the market in the 3rd quarter of 2020, compared to data from this same time in 2019.

4. You May Need More Money Down

It’s never fun to be the bearer of bad news. But, besides stricter credit requirements, certain lenders now require more money down from borrowers. While this isn’t great news for borrowers, it’s understandable to see why lenders are doing this.

Many people throughout the world are running out of options to keep their current homes. This stressful situation leads to more delinquencies and foreclosures, which makes things difficult for lenders.

By raising down payment minimums, lenders are trying to keep their companies operational and lessen their overall risks.

5. You May Have to Tour Homes Digitally

In the past, it was easy for house hunters to make a quick call to a Realtor and take a look at homes for sale. Now, with social distancing becoming the norm, touring a home in-person is less likely to be an option for you.

Don’t worry; this doesn’t mean you’ll have to guess what the inside of a home looks like. Instead, many real estate companies are harnessing the power of digital tours.

There are several ways for real estate agents to give their customers virtual tours. Your agent might use Zoom or a similar conferencing program to tour a home digitally. Some real estate companies and listing websites also have video walk-throughs for you to enjoy.

Zillow, a popular home listing website, reported a 188% increase in the creation of 3D home tours in March 2020 when compared to data from February 2020.

6. You’ll Likely Face Less Competition

When discussing buying a home during a pandemic, not every change negatively impacts buyers. As you likely know, the global pandemic is affecting the finances of people worldwide.

This doesn’t mean that no one is buying a home right now. However, research shows that there are fewer buyers actively looking for homes in 2020.

One study found that 60% of real estate agents in the United States reported a drop in buyers and sellers due to the current pandemic.

7. Your Closing Might Be Digital

We’ve mentioned that much of the house hunting and buying processes are becoming digital. Considering that, it’s a safe bet that you’ll close your home digitally. Fortunately, it’s easy for real estate companies to carry out a digital closing.

There are several ways to close digitally, including e-signing your closing documents, having a video meeting with a notary, and paying closing costs online. Not every real estate company or lender will want to close digitally, but it’s something to prepare yourself for.

Buying a new property is an important time in anyone’s life. When it’s time for you to find a new home, stay safe by following the previously mentioned tips. If you can deal with changes here and there, you’ll be inside a new home in no time.

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