Podcast: First Time Home Buyer
For this podcast I sat down with Walt Wollet, mortgage loan officer with Pacific Residential where we discussed his experience as a first time home buyer. Learn about the home buying process from the perspective of a mortgage lender and how handled the process and what things he might have changed to make it even better. You can connect with Walt Wollet on LinkedIn, Facebook.
You can connect with me on Facebook, Pinterest, Twitter, LinkedIn, YouTube and Instagram. About the author: The above Podcast “Podcast: First Time Home Buyer” was provided by Paul Sian. Paul can be reached at paul@CinciNKYRealEstate.com or by phone at 513-560-8002. With over 10+ years experience, if you’re thinking of selling or buying, I would love to share my marketing knowledge and expertise.
I work in the following Greater Cincinnati, OH and Northern KY areas: Alexandria, Amberly, Amelia, Anderson Township, Cincinnati, Batavia, Blue Ash, Covington, Edgewood, Florence, Fort Mitchell, Fort Thomas, Hebron, Hyde Park, Indian Hill, Kenwood, Madeira, Mariemont, Milford, Montgomery, Mt. Adams, Mt. Washington, Newport, Newtown, Norwood, Taylor Mill, Terrace Park, Union Township, and Villa Hills.
[00:00:09] Paul Sian: Hello, everybody. This is Paul Sian, Realtor with United Real Estate license in the state of Ohio and Kentucky. And with me today is a returning guest, Walt Wallet with 5th 3rd Bank. He was with a different lender in the past, and now he’s with 5th. 3rd. We’ll talk Are you doing today?
[00:00:24] Walt Wollet: I am fantastic today, Paul. We’re out here at the on my new piece of property that you helped me acquire and I’m excited. Toe do a podcast. It’s been a while.
[00:00:36] Paul Sian: Yeah, that’s that’s one of the reasons to that we decided to do this. Podcast is hey, your lender. I’m the You know, I’ve been through the process of myself of buying my own house as a real real estate agent, so I know how it is. So let’s we want to get the perspective of a mortgage lender, you know, buying the house. So I guess let’s just start from the very beginning. What’s what’s the first step that anybody has to do If they’re they’re interested in buying a house, they skip, you know, leave out the real estate agent. They know they want to buy a house, and they’re gonna talk to a lender at 5th, 3rd, and that happens to be you. So what’s their What’s their first step?
[00:01:10] Walt Wollet: So for my first step, and we talked a little bit before this about just being an active consumer, and we’ll get more into that. But it really it really what I what I would tell people is that you need to do an honest debt analysis, and you honestly need to look at budgeting eso. You need thio when you’re when you’re buying a place you need, you need to take in all what all those costs are, you know? So what are the costs that you know you have to pay every month, is there, You know, do you have a $40 credit card bill you pay every month? Your cars? You know, your auto loans, whatever, whatever you pay every month and you need you need to analyze that. Um, just just so that way you’re not wasting your time, right? So it’s like the first thing I would do is get is get pre qualified or talk to a lender, you know, And I’m an insider, so I kind of knew what I had to do and what I did was before I got pre qualified, was paid off, paid off all my credit cards because I could, um, you know, just to make sure that when my credit was pulled, I had I had a score that was higher so that I could get the best rate in terms that are available. Um, so that that was that was that was a big That was a big thing that I that I did your credit score a big part of it is is factored by credit utilization. So a lot of times, people that are borderline approval if they can get, get added to a secure card or get added to, you know, another account, unauthorized user account or pay down credit cards, Um, you know, say from 70% to below 50% utilization than their score could shoot up. And we can, you know, we can qualify them for, for for what they really want to buy. So that that that that would say that would be the first step is always to just talk to different lenders and talk to different people. Don’t go toe one lender and just trust them and like I wouldn’t want any what, buddy? That I work with to just talk to me. I want them to do their own research. And I want them to know that I’m going to take care of them now If they find someone else that maybe is promising them better numbers or whatever. You know, we I hope that we can talk about that. But, you know, at the end of the day, we have toe, we have to perform and do what’s best for consumers. Yeah,
[00:03:27] Paul Sian: definitely looking at that. Going back to the the credit score. And you mentioned credit score affects your your interest rate. And you know what? Let’s do you have Ah, breakdown. Basically, you know what? What credit scores and how how much impact on your interest rate is? I mean, is it is something easy to quantify? Or is it a little more, you know, computer oriented than that or computer algorithm oriented than that?
[00:03:53] Walt Wollet: So this is another. This is another question. Where it gets into every bank is gonna be different on that account. Okay, so you have the agencies Fannie and Freddie, right? That that back these the back these loans and securitized these loans. And they said, Ah, lot of what the fees and charges are on on those you know on those products and and those were built in to the actual interest rate into the actual loan. In a lot of cases,
[00:04:21] Paul Sian: those almost like base fees,
[00:04:22] Walt Wollet: right? But then other people. So what a lot of banks will do and Chase Chase is an example is notorious for this, but so say they don’t want They don’t want a certain loan. They still legally have to offer it. But they’ll raise the interest rate on that product so that they don’t have to, you know, originate or services many of those loans. So, you know, truthfully, you know certain certain companies will do that with government loans if they don’t want, You know, they don’t want to deal with the potential risk of having the the agency’s forced them to buy back those loans if there’s any sort of auditing or documentation issues, so they just set their their margins, you know, like this that their rate really high, um, to try to dissuade people from applying and you’re seeing that a lot with refinances that some of the larger lenders now, too, Just for the same. The same exact reason.
[00:05:17] Paul Sian: So what do you tell us about some of the hiccups that you had happened to you in your specific alone while you were trying to buy a house?
[00:05:25] Walt Wollet: So I would say that I would say that any hiccups we had Mike, who helped helped who helped us out on this purchase, did a did a great job with, you know, a soon as stuff came out of underwriting. Soon as underwriting came back with a message, he would reach out to me and anything we needed, we would get. We did a good job together. Me being an insider, of documenting everything up front that we needed Thio. So any letters of explanation and any sort of thing like that, I’d say that the biggest hiccup was probably and especially right now with Kobe, it was the appraiser. So you way had required a desktop appraisal on this purchase, which is essentially a drive by appraisal. Now, typically, you know, in any other market, a normal market. I guess you might say you would have that appraiser reach out. They would be reaching out to the selling agent so the agent would know. Okay. The appraiser has seen the property. They’re out here
[00:06:25] Paul Sian: there physically walked in the property, right? And almost like a home inspection,
[00:06:28] Walt Wollet: right? And so that didn’t happen with this purchase, I guess. I think he pulled. He might have pulled into the back, you know, a little bit and checked out some of the buildings and took off, right. Um and then and then the appraisal came back. Luckily, was all good, but I think one of the hiccups was just that. That that cellar not knowing that the that the appraisal was done and that the seller’s agent not knowing. And that kind of elevated there, um, anxiety, right?
[00:06:55] Paul Sian: E, remember talking with the seller’s agent, basically, you know? Hey, when’s the appraisal happening? And, you know, I asked, I did ask the agent. You know, did they praise will call you and that kind of send up red flag on her part unintentionally because, you know, they won’t be contacting her. They would just be driving by, you know, looking at the back of building or looking, walking the building that really get, you know, looking to get inside the building.
[00:07:20] Walt Wollet: But as far as just just hiccups now and generally on in this market with loans is ah, big thing I talked to with my team and my manager all the time is just getting things in is clean and as clear as possible, you know? So what I think a lot of especially first time clients don’t understand is you cannot tell me that your student loan payment is this when really, it’s this and you cannot You cannot say that you make this much money when really you make this much money and every little detail of that application is gonna be verified and is gonna be put through extreme due diligence. So with that said, you know, like where when where we run into problems or where any lender will run into problems is when the story changes, you know? So it Z okay, we’re calculating, you know, 40 hours a week for your income, and then we get you know, the verification of employment back. And it’s it’s 32 you know, a week. Um, even though your recent pay stub stay safe 40 like, you know, those kind of issues I think everyone runs into and deals with, and it’s just like we have to have it perfect, you know? So if we’re talking about homeowners insurance numbers up front and this is what they are, and this is what you know, this is what they need to be. Then that’s what it is, you know. So we can’t I guess we can’t have, you know, radical changes in process or else you’re gonna have a loan that goes on forever and ever.
[00:08:45] Paul Sian: Yeah. So make sure you, you know, you’re dot your I’s cross your T’s and making sure the information is 100% correct. I mean, probably one of the best ways to do that is, you know, go on your own, pull your own credit report. Make sure you see all your accounts. Kinda like you had mentioned the beginning. Take a look at all your debts and and your assets as well. You know, make sure all your income is properly documented. Make sure all that’s documented. You know, the numbers that you’re reporting are what you’re being, what it is being reported to the lender that way. It you know, it’s smoother process underwriting is gonna have less less questions and you know you’re the one will go through easier,
[00:09:20] Walt Wollet: definitely. And one thing that I advise a lot of people to is I like to have, if possible, if time permits have that credit conversation with the clients up front. So even, you know, two weeks before they’re ready to shop, you know, even months before ideally, we talk about the credit and that there was a There was a case recently with a friend of mine, a client who’s a doctor, and he had mentioned, though I you know, I have this collection from this utility and I don’t know where it came from. And you know, there’s there’s laws that debt collectors and that people have to follow. And a lot of times you know what we’re seeing in the world, right is with with corruption and people not following rules and people not doing what they need to dio Ah, lot of times you as a consumer and you do you have rights to dispute that and toe thio and try to clean up that information yourself. The, uh, credit bureaus have legally every year have to send you a copy of your credit report if you request it so and I always advise people to do that, definitely
[00:10:21] Paul Sian: take a look at it. It mentioned fees earlier. We talked about a little bit about lenders fees and let’s talk a little bit more. I mean, what? We have your base fees that the the these other, like government sponsored entities, so to speak, the Fannie Mae Freddie Mac’s that they have charged. What sort of extra fees are you know, Banks, tacking on the loan and whatever. I guess what? Some of the reasons for these fees
[00:10:45] Walt Wollet: so every every loan requires people that work on it. So one thing is, is that I always say is you know, I would advise consumers toe, look at different lenders and talk to different people Now, I’ll tell you right now that cheaper is definitely definitely, definitely not always better. And a lot of times there are lenders out there that you know they’re overpriced and they’re at the top of the market and they know it, um, and so I guess there’s a There’s a huge discrepancy between fees in various programs and various lenders, and it’s just a matter of going and asking those questions. Okay? What is you know, why is the processing fee this why, you know, what’s this underwriting fee? And then it’s always okay to ask. Well, hey, is there anything we can we can do about this? So in my case, when it comes toe the fees or the stuff that I that I had to pay for it. So you know, certain things that the bank paid for because I’m an employee, which is a great benefit to us. Um, you know, help me, Help me, you know, save money. As I bought this place, one thing that a lot of buyers don’t think about is all those incidental fees. So every home inspection is 4 to $500. You know, every, um, you know, just just buying garbage cans out here was $150 you know? So there’s these. There’s these costs that come up, you know, the wax seal on the toilet stuff will come up, and you just have to make sure that you have that budget it in and that you’re prepared for those expenses. And so, like we you know, a lot of times if there’s multiple people living in a house and it’s it’s one person on the loan, you know, like that’s when I’ll look at it and be like Okay, well, you know, really, there’s three people that are gonna be living in this house. Three people sharing expenses. It’s different. Um, but those kind of loans are are always more difficult, you know? So you really want to make sure that, um, you understand all the costs involved, Especially if you’re especially if your debt to income ratio is higher as it is because you have a lot more expenses. So,
[00:12:54] Paul Sian: yeah, we’re talking about those fees. I mean, it’s almost example is some of the car dealers used car dealers or even new car dealers? I mean, you know, the you get through the negotiation process you got, you got the price on the car, and then you go talk to the finance finance manager quote unquote. And that’s where they you know, they start trying to tack in all these, you know? Hey, let me let me throw this warranty on you. Let me throw, you know, non, you know, payment protection in case you’re disabled. Campaign and So that’s where they start packing in things, packing their basically fees. You know, they’re fattening the bottom line of the car dealer, of course. And you know, that’s that’s part of their job. But you know, the same time to as consumers, our job is to look at that critically and say, You know, do I really need that? You know, Do I need a no payment fee? You know, because I’m disabled. I’m not currently working, but at the same time to, you know, turn around, look at your auto insurance or look at your homeowners insurance. Are they providing some similar coverage that you know that you would need or you know would would avoid? And least in that case, in the autos auto example, It’s not so clear cut. You always don’t have that type of thing. You know you’re homeowners insurance. Not necessary gonna cover you. You know, if you can’t, you can’t pay the mortgage, but there might be other, some other benefit or some other protection. You know, your employer might be offering something for you too, you know. Why pay the extra fee to the lender. You know, when it’s saving you money and they’re just trying to pad their bottom line versus, you know, you’re trying to save your dollar and you know, it’s a long term purchase you’re investing for, you know, 2030 years. Mawr costs them or the higher the interest rate. I mean, the more you’re paying overtime,
[00:14:35] Walt Wollet: and that’s why it’s so. It’s so important up front. You have, You have power is a consumer, you know, like and lenders, you know, if if any lender doesn’t, you know, it doesn’t wanna be competitive. That za red flag, probably. You know, so especially with with us in the bigger banks, you know, we we have you know, we did until, you know, kind of some of the, you know, the new fee with Fannie and Freddie for refinances, um, kind of cut into our margins a little bit. But, you know, we’re willing, toe, do you know we’re willing to do whatever we can do toe win business, you know? But at the same time, we have to pay people off a fair wage and we employ Americans, you know, So that Z you know, that can can be a difference, right? But it’s just a matter of like weighing, weighing out things. You know different. You know this. This lender might have the best deal, but they might take a really long time to get it done. You know this lender there there really fast, But they’re very expensive, you know? And what’s the What’s the trade off? And so you know, it’s always good toe talk to multiple people about that to gain a broader understanding for yourself.
[00:15:46] Paul Sian: How are they giving those fees? I mean, I’m presuming you need to get a credit report. Run right, Okay. And then how how big of an impact is that? You know, you’re getting multiple credit reports. Let’s say I talkto 34 lenders and I say, Okay, go ahead, run my credit if I, if I do it over the same day or a couple of months, is a big difference.
[00:16:05] Walt Wollet: So as as Faras a assed faras, a hit on the credit report. Yes, it’s it’s 30 days, so you’re allowed. What sends a red flag to the to the bureau’s is when you shop for a bunch of different things. So say that when I was buying this house, I also have my credit pulled for a car and I had my credit pull it for a tractor on and I did all this financing stuff. Well, my credit score, which just start to tank because it’s because the way the agencies that their algorithms or reading that is this person doesn’t have any cash right there. They’re financing everything you know. Here’s another credit card inquiry, so it’s all within that 30 day window. So you legally you get your credit pulled once with a lender, and then you have 30 days and you could have the credit polled, so long as it’s a mortgage inquiry and not any sort of general finance inquiry. And it’s how they’re coded to the to the actual credit providers, right? But so long as it’s a mortgage inquiry, it only it’s only gonna count is one hard inquiry. So you you’re you’re the credit agencies. They don’t wanna dissuade people from shopping for mortgages because we need to have a fair, you know, a fair and ethical mortgage market. Um, and it and it iss you know it. It’s definitely better than at what I’ve heard about, you know, from from some of the people I work with in before 2000 and eight. Right? But, um,
[00:17:30] Paul Sian: but comparison comparison shopping is, uh, could be a big saver. I mean, you know, thousands upon thousands over the life of the loan. Definitely going back. Now, we’re going back to your own personal experience looking. You know, hindsight is 2020 looking back at the whole process. Is there something you think you could have done better? That you know, would be good advice for somebody else?
[00:17:51] Walt Wollet: Yeah, I think I am. I think I probably I probably should have paid off all my all my dead sooner, you know? So that was that was one thing is I really, um
[00:18:05] Paul Sian: when you say sooner, how much sooner? And say prior to applying the loan. How much quicker should you have done
[00:18:12] Walt Wollet: that? So just as an example, I had There’s a company. There’s a rental verification company, and I pay them a fee toe, add toe, add my rental trade lines to my credit report, and those were not added before my credit report was pulled. So just like things like that that I had done to strengthen my credit profile in my score, they weren’t reported, right. And then I paid off all my cards, like I said, but some of them were still reporting balances when we pulled s. So it was kind of like take
[00:18:45] Paul Sian: 30 to 60 days for some companies report.
[00:18:47] Walt Wollet: Exactly. And so And here’s what I found out is that you most companies will offer what’s called off cycle reporting so you can call them like, Hey, I’m you know, I’m gonna get my credit pulled for, you know, this investment property loan. And I just paid off this credit card. I’d like it to report. And so some of them were honest with me, and they’re like, Oh, well, yeah, we can report And they did, and others said they did, but they didn’t. And it’s just the nature of, you know, the nature of it. So I would I would say a lot of that stuff. I would I would just, you know, I would just get it done as soon as possible. If you know, you know, if you know that, that’s gonna happen. Like I had my I had my credit pull twice for this home purchase. Um, because the original credit report expired right. Um, and I did that in February, you know? So I knew in February like, Okay, that’s what my actual score is. And then I use that credit report to attack the, you know, some of the balances and anything. Any other derogatory is that we’re keeping my score lower than where where I wanted it to be. Okay, so
[00:19:50] Paul Sian: all great advice and all great conversation. So I appreciate you taking the time to be on this podcast with me. Any final thoughts?
[00:19:59] Walt Wollet: Um, I, uh I just I just say everyone stay safe out there. And, um, you know, it’s just like with with what we’re talking about with with lenders, you know, and with getting different opinions and different perspectives in the world right now, that is what I would advise everyone to dio, you know, So, ah, lot of people there usedto watching CNN. They’re used to watching Fox News. They get their perspectives in their opinions, you know, from this one place. And I think that, you know, especially right now, is as you know, things were kind of, you know, getting getting a little crazy
[00:20:38] Paul Sian: up in the air,
[00:20:39] Walt Wollet: right? We need we need to All kind of, like, you know, realize that that everyone’s a person and that, you know, people are people and that we just way have to We have to do a better job working together. We have to hold our leaders accountable in this country.
[00:20:55] Paul Sian: We’re in this together basically,
[00:20:56] Walt Wollet: right, you know, And then and then that’s that’s all I That’s that’s all I would say to people is just and especially if you’re working with mortgage lenders right now, we’re all you know. We’re all stressed out and we’re swamped. And, you know, your I promise you you’re not the only client you know. So it’s like, you know, just just be patient with people. Um, you know, there’s a lot of people that that, you know, behind the scenes that work on these loans and your your loan originator eyes going to do their best for you. But a lot of times things, things happen. Unfortunately, and you know, you just need to take it as a learning experience and move forward. And I think that’s what our country needs to do with, uh, a lot of this craziness right now
[00:21:38] Paul Sian: wholeheartedly agree in the awesome advice. Thanks again for being on
[00:21:42] Walt Wollet: awesome. Thank you, Paul.
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The coronavirus pandemic has made the logistics of buying and selling a home and moving more complicated, especially in hard-hit cities and communities. According to the National Association of Realtors, the number of homes for sale across the US continues to decline. Additionally, fewer potential buyers can or want to tour properties and risk contracting COVID-19.
The economic downturn—due to coronavirus stay-at-home mandates and social distancing—has resulted in pros and cons for both home buyers and sellers. I’ll cover advice to help both parties make wise real estate decisions during this uncertain time.
4 tips for home buyers during the coronavirus crisis
Since the coronavirus crisis began, more than 26 million Americans have filed for federal and state unemployment benefits. If you’ve lost part or all of your job or business income, and you’re unsure when your finances will return to normal, buying a home may not be the best idea.
But if your income is stable, you have cash in the bank, and you’re confident that you can stay in a home for at least five years, buying a home now might be a smart move. Here are four tips if you’re in the market to upsize, downsize, or become a first-time homeowner.
1. Evaluate your current and future budget
Buying a home is a significant financial commitment, so understanding how much you can afford is essential. If you’re at all worried about getting laid off or the future of your business, buying a home that’s under your budget is wise.
In addition to your mortgage payment, homeowners must cover many other expenses, including property taxes, home insurance, applicable association fees, and ongoing maintenance. Take a hard look at your income, expenses, and savings to make sure you have enough cash for closing and to keep a healthy emergency fund.
Take a hard look at your income, expenses, and savings to make sure you have enough cash for closing and to keep a healthy emergency fund.
Here are some ways to crunch your budget numbers:
- Down payment: Depending on a home’s purchase price, your credit, and your lender, the required mortgage down payment could range from 3% to 10% of the purchase price.
- Closing cash: At the closing table, you’ll need to pay the down payment plus additional expenses, which vary depending on location. They typically include fees for a home inspector, surveyor, property appraiser, credit check, loan underwriting, and homeowners insurance. The total could add up to around 2% to 5% of a home’s purchase price.
- Monthly housing payment: Unless you have a high amount of debt, consider spending a maximum of 20% to 25% of your after-tax income for a home. It includes the mortgage principal, interest, taxes, and insurance—known as PITI.
- Emergency savings: Keep a minimum of six months’ worth of living expenses on hand. This safety net will keep you safe from unexpected expenses or the loss of job or business income.
- Maintenance reserve: Have cash ready for ongoing repairs, such as fixing a roof leak, replacing a heating or cooling system, or needing a new refrigerator. A good rule of thumb is to save 1% to 3% of your home’s value for annual maintenance.
2. Get preapproved for a mortgage
Before spending too much time or mental energy searching for a home, make sure you qualify for a desirable mortgage. The amount you can borrow, the interest rate, and your downpayment depend on a variety of factors, including your credit and income stability.
Due to the economic crisis, lenders are expecting delinquencies from existing customers who are facing hardships. To offset those risks, they’re tightening lending standards for new borrowers making it more challenging to qualify. You may need better credit and more down payment money than was typical before the pandemic.
Due to the economic crisis, lenders are tightening lending standards for new borrowers making it more challenging to qualify.
A mortgage preapproval is a document that outlines how much a lender will allow you to borrow, at what rate, and for how long. It’s a critical tool to know the price range of homes you should be shopping for. Additionally, a preapproval can carry a lot of weight with a potential seller who may be evaluating multiple offers and needs to close quickly.
Remember that you still need emergency money in the bank after buying a home. The fact is, you need even higher amounts of cash on hand for a maintenance reserve. Also, consider other expenses such as moving and furnishing a new place, which can really add up.
3. Use technology to research and tour homes virtually
Many digital tools allow you to research potential homes and stay safe. Here are some ways you can find a new home from the safety and comfort of your existing one:
- Video calls: Have a Zoom or Facetime call with potential real estate professionals or sellers. They can give you a virtual tour of the home and neighborhood and chat about other points of interest like schools, shopping, and public transportation.
- Google Maps: Google’s street view allows you to see the features of a neighborhood and even walk it virtually. You can time your commute to work based on the time of day.
- Neighborhood review sites: Check out the walkability, crime statistics, and school rankings using sites such as Walk Score, SpotCrime, Family Watchdog, AreaVibes, and GreatSchools.org.
Using a variety of resources, you should be able to narrow down your potential home choices significantly. If you can drive by properties, that will also help you know which ones you want to tour.
Once you have a mortgage preapproval and feel sure that you’re interested in buying a specific home or homes, inquire about getting physical access. If it’s vacant, an owner or real estate agent may be able to open it up and let you roam around with plenty of social distancing.
Home tour safety guidelines during social distancing may vary from state to state. Check with your real estate agent to get a better understanding of any requirements or limitations.
However, if the seller still lives in the property, they’ll likely want to make arrangements to be away or to stay outside while buyers tour their home. Be respectful of everyone’s desire to avoid the coronavirus by wearing masks, gloves, shoe coverings, and using hand sanitizer before going into a listing. Find out if anyone in the home has been sick or spent time with someone diagnosed with COVID-19. Likewise, disclose if you’ve been ill or exposed to the coronavirus.
4. Save money with a historically low mortgage rate
The rate for a 30-year fixed-rate mortgage is at a historic low and keeps going lower. According to mortgage rates on Bankrate.com, they fell to 3.55% from last week’s rate of 3.58%. If you want a 15-year fixed-rate loan, it could be as low as 3%. In many parts of the country, owning a home costs less per month than renting a similar property.
However, don’t wait too long to get a mortgage commitment if you’re a serious home buyer. Lenders are under enormous pressure due to a wave of potential defaults, forbearance requests, refinancing applications, and federal stimulus programs they may be processing and funding. As I mentioned, it’s only going to get more challenging to get a mortgage application through underwriting and approved.
Lower rates and monthly mortgage payments may allow you to afford a higher-priced home if your finances are in good shape.
But if you can lock in a low mortgage rate and get a property under contract, it can undoubtedly allow you to save money over the long run. Lower rates and monthly mortgage payments may allow you to afford a higher-priced home if your finances are in good shape.
In addition to low-rate mortgages, there may be bargains on the market, depending on where you want to live. If a seller is uncertain about their financial future, they may be willing to unload their property for a low price. Although many banks are offering forbearance programs, some homeowners may be feeling pressure to sell, giving buyers an advantage right now.
4 tips for home sellers during the coronavirus crisis
Selling a home anytime can be a hassle. But selling a property during a pandemic is probably something you’ve never thought about.
However, real estate closings are happening, so don’t think you can’t find a qualified buyer. Getting a deal may depend on creative marketing and finding a real estate agent who can help you find solutions to new challenges. Here are four tips to make your home attractive and safe for potential buyers.
1. Use technology to market your home
Creating virtual tours is critical to pique a buyer’s interest and reduce the number of strangers in your home. It’s never been easier to use a camera or smartphone to create videos of your home’s interior, exterior, amenities, and neighborhood. However, make sure the lighting is good and presents your home favorably.
You can upload videos to a variety of sites that buyers can access, such as a YouTube channel, Zillow, or Dropbox. If you have a real estate agent, they can include your video files in the multiple listing service (MLS) database and their company website. They may offer professional photographers and videographers as part of their listing services.
2. Vacate your home if possible
If you can move out of your home while it’s for sale, you may get more interest from buyers. Touring a vacant property may seem less risky to buyers and real estate agents. Plus, you won’t have to worry about people coming into your space that could be carrying the coronavirus.
If your mortgage lender offers forbearance, consider suspending your payments and using the money for a short-term rental.
If your mortgage lender offers forbearance, consider suspending your payments and using the money for a short-term rental. Getting distance between you and home buyers might be critical if you, or someone in your household, are elderly or have health conditions that make you vulnerable to COVID-19.
3. Be clear about how you’ll interact with buyers
If you can’t move out of your home, be clear about how you will protect yourself, agents, and potential buyers who want a tour. As the seller, you dictate the protocol, such as everyone must wear masks and sanitize their hands before entering.
Include information about measures you're willing to take, such as disinfecting high-touch surfaces and leaving doors and cabinets opens, so visitors don't need to touch anything. If you have hand sanitizer or personal protective gear to offer, that's a goodwill gesture that should make everyone feel more at ease.
Once you have a purchase agreement signed, you or your real estate agent will need to coordinate with other professionals, such as inspectors, appraisers, contractors, and surveyors. Depending on the buyer's lender, you should be able to complete a remote closing by mailing the original documents.
4. Be prepared for longer than normal marketing times
Since there are fewer buyers and many overwhelmed lenders, the average marketing time for homes across the country may be longer than usual. Being as creative and flexible as possible will increase the likelihood of signing a deal.
No one is sure what market value is right now, so buyers may be aggressive to find out how low you'll go.
If a buyer throws out a lowball offer, don't let it offend you. Carefully consider what your bottom line is and make an appropriate counteroffer. No one is sure what market value is right now, so buyers may be aggressive to find out how low you'll go.
While the fear of the coronavirus and a looming recession may make it more challenging to sell your home, remember that the lending environment is favorable. For buyers who aren't worried about losing a job or business income, getting a historically low home loan is a huge incentive to invest in a home sooner rather than later.