What to know about buying or selling a home during a pandemic
By HANNAH STIFF
Better Business Bureau
In a year where uncertainty is the only certainty, there’s one bellwether industry leading a flock of others to prosperity. We’re talking about the housing market, of course.
Several factors – a lack of inventory, low, low interest rates, and an exodus to the suburbs – are driving a persistently robust housing market.
According to a recent housing forecast by Realtor.com, “Home sales are constrained by low inventory and diminished seller and buyer confidence as the effects of COVID linger in the labor market,” Realtor.com Chief Economist Danielle Hale writes. “While mortgage rates will be favorable, qualifying criteria will be tougher than recent years as lenders seek to mitigate their own risks against economic uncertainty.”
According to Hale, this means buyers need to scrape together more cash for a down payment and bring high credit scores to the table to secure a loan with a reputable lender. With little inventory and mortgage rates at historic lows, shoppers must get savvy, and quickly.
Better Business Bureau Northwest + Pacific offers these quick tips to make home buying easier:
Do your research: It's hard to know if you're getting the best deal if you don't compare offers. Applying to multiple lenders allows you to compare interest rates and closing costs and can even allow you to leverage offers against each other. But there are drawbacks. Applying to many lenders could affect your credit score as each lender must make a credit inquiry.
Get financing before browsing: Houses can enter and leave the market quickly. You could be setting yourself up for frustration and heartache if you begin looking before your funding is in place. First-time homebuyers may be surprised to see how much mortgage lenders approve them to borrow and this could affect where you begin your house search.
Consider using an agent: Buying a home can be stressful but having a professional by your side can make the process easier. Buyer's agents help you find the right property for your budget and expectations, negotiate offers on your behalf, and answer the questions and concerns that arise.
Budget for after move-in expenses: Don’t forget to save for the things you'll need immediately after moving in. The cost for utilities, changing the locks, purchasing furniture and paint can add up. To stretch your budget, make a list of the items you will need to get done immediately after moving into your new home. Get quotes on those jobs, so you know you're getting the best deal for your dollar.
Buying a home is exciting, but it can also be risky.
Although emotions may be running high, especially as you prepare to move during a pandemic, be wary of these pitfalls before you purchase your new home:
Going over the preapproval limit: It’s up to you, the borrower, to assess your financial situation and know how much you can safely spend. Ask your realtor to show you homes near the lower end of your preapproval limit. A more expensive home could leave you paying more each month and will make it challenging to take on unexpected homeownership costs.
Blowing your budget in a bidding war: In a competitive real estate market like we’re experiencing now, multiple hopeful buyers may submit an offer on the house you want. If your dream home has another offer, it can be tempting to jump to the top of your preapproval limit. Take some time to consider how the higher mortgage payment would affect your life over time.
Skimping on the home inspection: Once an offer is accepted, you move on to the home inspection, which reviews the condition of the home inside and out. Not all home inspections are equal. As the buyer, you will hire a company to complete the inspection, so do some research and compare services and costs. Make sure the inspector will access every part of the home like the attic, roof, and crawl spaces. Plan to attend the inspection so you can ask questions and have the inspector show you anything of note. If you can't be there, ask your agent to go instead.
Remember, BBB keeps records on millions of businesses. You’ll need to hire everyone from a realtor and lender to an inspector, painter, locksmith, HVAC company and others. Whether it’s a foundation that needs a fix or a roof that needs replacing, head to bbb.org to search for the professionals you can trust, vetted by the BBB. On our website you can find out what other customers say about companies and find more homebuying tips.
Hannah Stiff is the Montana state director for the Better Business Bureau Northwest and Pacific regions. She may be reached at 406-223-3533 or Hannah.firstname.lastname@example.org.