Low interest rates and a strong economy have driven the housing market for the past few years — but the coronavirus epidemic has thrown a temporary wrench in the upward trajectory of home prices. As some buyers have backed out of agreements, either due to job loss or jitters, other buyers might be able to find a great deal. Mortgage interest rates are still low, and if you need to move soon, waiting isn’t a great option.
So, how to buy a house during a pandemic? It’s possible, but you will need an expert agent on your side. Almost every state has halted open houses, and you’ll need an agent to help you look at, make an offer on, and close on your new home. Here’s how to work with a real estate agent during the coronavirus pandemic.
Meeting with your agent
The relationship between an agent and client is important to the overall success of the homebuying process. As a buyer, you need to feel comfortable being honest with your agent about your wish list and priorities. Since you’ll be doing everything you can virtually, you need to be able to trust them and their expertise.
Michael Perna is an agent with significant expertise in single-family homes — selling 7% more than the average agent in Farmington Hills, Michigan. When he onboards a new client under normal circumstances, “We would either meet with them at the office or at a coffee shop near where they’re staying now.” That’s not an option right now, so he’s using online tools.
Don’t worry if you’re not comfortable with Zoom or prefer FaceTime over other meeting apps. He says that agents will meet with buyers using the tools that they’re comfortable with, rather than asking them to learn a new platform on top of everything else.
At a first meeting, an agent usually walks through the process of buying a home and shows and explains important documents — like a purchase agreement. Video conferences and email now take the place of in-person meetings.
Financing a home
As tempting as it is to start looking at listings and dreaming of your new home, first, you need to get preapproved for a mortgage. Because it is harder to work with clients virtually, both agents and sellers want to know that you’re serious about buying.
An agent isn’t going to help you apply for a mortgage, but they are going to have contacts with loan officers and mortgage brokers. Working with a trusted professional will make the process go smoother.
Getting your financing in order is even more important during the coronavirus pandemic, when some lenders are imposing overlays and increasing loan standards. Your agent will know where to turn if you’re concerned about financing.
Your agent’s expert knowledge of the neighborhoods where you’re home shopping is going to be especially critical when it’s not possible to explore on your own. Yes, you could drive around — but driving is not recommended right now in case you get into an accident. And just looping around cul-de-sacs doesn’t tell you whether the city is planning on building a new park nearby.
Your agent will know what developments are being discussed or planned — and the likelihood those plans will continue after the pandemic. They’ll tell you if a home you’re looking at is near a great grocery store, or a hospital, and how far you’d have to walk to catch the bus to work. If you’re new to an area, you’ll need their local expertise.
Buying a house
Agents who have worked in the same areas for years might know the builders themselves and will guide you to the best-quality homes. Or, perhaps they’ve learned about a builder’s reputation through word-of-mouth. If a neighborhood or condominium has an association, it’s important to find out if it’s well-run, which an agent can help you investigate.
Each city and state has its own issues that affect its housing stock — whether it’s ice dams on a roof in Minnesota or mold in a Pacific Northwest basement. Agents will also know what the common inspection issues are and whether it’s prudent to order extra inspections.
Extra inspections are especially important if you’re buying sight-unseen, but so are addenda to your purchase agreement. Because housing stock is so tight in Birchen’s city, buyers are willing to make offers without walking through a house until after they close. She includes addenda to their purchase agreements to protect them in case they find something after closing.
With her COVID-19 addendum, “If the buyer goes into the house, and there’s something they see that’s not what they expected, the seller agrees to address the situation post-closing.”
Agents understand the local inventory and how the homes you’re looking at measure up — important for resale value and your peace-of-mind. Some states only allow alternative appraisals at the moment, and your agent’s expertise is going to matter more to you right now. A big difference between the offer price and appraisal value could cause the deal to fall through, so making an accurate offer matters more at the moment.
Touring a potential home
Whether or not you can tour a potential home depends on the state. In states with shelter-in-place orders, if real estate is considered an essential service, buyers can visit homes, but agents are still taking precautions.
In Michigan, buyers can still tour properties. But because buyers don’t want to raise their risk by looking at multiple houses, Perna starts with a list of 10 to 12 potential homes and has the buyers watch the virtual tours of these homes. After narrowing down the list, he’ll ask the listing agents to have their sellers do a virtual tour for the buyers, where the seller walks through the house on a video chat with the buyer. Only after they’re down to one or two properties will the buyers visit a home in person.
When the sellers leave the house before the showing, they leave all the doors open and all the lights on. That way, buyers don’t have to touch anything. The listing agent wipes down surfaces, and Perna maintains 10 feet of distance between himself and the buyers. “If people go into a bedroom,” he explains, “I won’t go in with them.” In some areas, agents are only permitted to bring one buyer at a time through a home, which means spouses or partners must wait in the car.
But the rules are shifting as the pandemic spreads, and they can be different even within the same state. In Birchen’s area, buyers can’t walk through a home. To work with this restriction, listing agents on the other side are helping provide her team with virtual tours. She says that “A virtual walk-through helps buyers feel comfortable writing an offer without going in,” and that they add extra addenda to protect the buyer when buying a property sight-unseen.
The rules vary by state and have been changing within states, so it’s best to work with an experienced agent who knows the current status in the city where you’re home shopping.
Offers and negotiations
Offers and negotiations don’t usually take place face-to-face, so if you’ve bought a house before, you’ll find nothing different at this stage. Comparable listings and recent sales always matter, but if your local market has slowed, experienced agents can help you figure out the right offer price if there aren’t many comparables.
What could matter more now during the pandemic are concessions and addenda related to the current situation. You and the seller will need to agree on extensions and delays for the inspection, appraisal, and closing. Negotiating a COVID-19 addendum related to buying a house without a final walkthrough could be tricky, and you’ll want an expert agent to guide the discussions.
The closing process and closing itself
Agents know local inspectors willing to look thoroughly at the house (If it’s permitted right now). Inspectors can do their job during the pandemic, but you won’t be present for the inspection. Instead of walking a buyer and agent through a home inspection, inspectors are recording video or video chatting with them during or after the inspection.
On a home inspection for one of Perna’s buyers, the home inspector found a problem in the attic. Perna had the home inspector make a short video of it and text it to the buyer and Perna while the inspector was still there. “That way,” Perna says, “we could call back and ask questions.”
Another part of the closing process that’s changed is appraisals. If there is a stay-at-home order, the appraiser can’t enter the house. Instead, they could conduct an alternative appraisal, where they either drive by the house or rely on comparable sales to determine its value.
An agent will determine how to close on a house safely — for example, if remote online notarization is available, your agent can walk you through it. This has been done before the coronavirus; for example, when a seller had already moved out of state. Locally, they’ll know where to find a notary and will make sure you meet document deadlines.
Michigan requires wet signatures on documents — which means that they must be signed in the presence of a notary. According to Birchen, “Our title company has been very careful that buyers and sellers are separate and are in rooms that have been sanitized, and our title officer wears a mask and gloves, and they all have fresh pens.”
Moving probably isn’t going to be seamless right now! An agent can facilitate this, too, whether it’s by delaying occupying the home or organizing a deep-clean. If your state classifies real estate as an essential service, like Massachusetts, you can book a moving company.
Yes, things will be different if you’re buying a house right now. But experienced agents are using digital tools to meet client needs. With everything else that coronavirus has disrupted, if you have to move, there’s no need to put your plans on hold.