Moving during a pandemic might sound like a bad idea, but there are plenty of reasons to buy a house right now. Low interest rates are tempting, you might have already planned to relocate, or a less-competitive-than-usual spring market could offer some deals. But can you safely buy during a pandemic?
Michael Perna, an agent in Farmington Hills, Michigan, who works with 67% more single-family homes than the average agent in his area, encourages nervous buyers to ask an agent, “What is your process or what policy do you have in place to keep my family safe?” It’s been a while since social distancing and shelter-in-place orders took effect, and agents have had time to adjust.
With a few simple steps, and by using digital tools, you have little to worry about if you’re buying a house during the coronavirus pandemic. Here’s how you can protect your family through every stage of the homebuying process.
The home search
It’s always a good idea to lean on an agent’s expertise and guidance when buying a house, but even more so during a pandemic. If your area is under a shelter-in-place order, you can’t drive around and look at neighborhoods. And sellers probably won’t allow buyers who haven’t been vetted and preapproved into their homes.
After you’ve been preapproved for a mortgage and found an agent, here’s how the agent will help you conduct a home search.
Looking at homes virtually
While once you might have only seen a virtual tour on a high-end real estate listing, they’re now a necessity for people selling their homes during the pandemic.
If the seller’s agent didn’t make a virtual tour before the pandemic and can’t enter the home to record one now, ask your agent to help. Perna has reached out to listing agents and set up FaceTime calls between the seller and his buyers. The seller walks the buyer through the house on the call, giving them a private, virtual showing.
What if the house came on the market before the pandemic, there’s no virtual tour available, and the seller is now out of state? Kathy Birchen, an agent in Lansing, Michigan, who’s worked with 66% more single-family homes than other agents in her area, had this happen.
Buyers can’t walk through a house in her area and must buy sight-unseen. However, the state considers home inspections an essential service. She encouraged the buyers to choose an inspector who took them through the home via a video call so they could see the interior before closing.
Narrow down your list of possible homes significantly before touring any homes in-person. Whereas once you might have wandered through open houses and attended showings for so-so properties, now it’s better to be picky. The more homes you walk through, the higher the risk of exposure to COVID-19.
Perna helps his buyers winnow down an initial list of 10 to 12 homes to just two houses before he ever contacts the listing agent to set up a home tour. This isn’t the time to look at “maybes” in person.
Looking at homes in person
When it’s time to look at a house in-person — if it’s still allowed in your area — what should you do to stay safe?
Have your buyer’s agent ask whether the sellers have traveled overseas or within the United States recently. If so, ask where they’ve been. If they visited a coronavirus hotspot, you might want to strike that home from your list.
You can also ask if they’ve been practicing social distancing and for how long, or if they work in healthcare or another essential service. Perna’s office has been asking sellers about international travel and possible COVID-19 exposure, but it’s not a required disclosure, and many sellers are choosing not to answer. At that point, you’ll have to decide if you want to tour the house.
If your state still allows home tours, bring hand sanitizer and use it frequently. Some agents are putting hand sanitizer out by the door.
Shauna Sheets is an agent in Rapid City, South Dakota, where agents can still show houses (she sells homes 68% faster than the average Rapid City agent). To protect her buyers, she arrives before them, and opens all the windows and doors and turns on all the lights so that they can walk through without touching anything. On tours, she stands at least six feet away.
In addition to not touching anything, avoid touching your face inside the house or after you leave, and wash your hands thoroughly as soon as you can. If you’re house shopping with a partner and want to be extra-cautious, you can go into the house separately. Have one spouse stay in the car while the other goes inside, then trade places once the first spouse is done. (This is a requirement in some areas.)
The offer: Introducing the COVID-19 addendum
With all the uncertainty surrounding the pandemic, it’s becoming common to add a COVID-19 addendum to purchase agreements. Your state’s Realtor association has likely distributed a boilerplate addendum to agents. An addendum protects both you and the seller from almost-guaranteed delays during the closing.
A COVID-19 clause could address delays in closing if your county recorder’s office has to shut down and county records aren’t available for a title company to search online, or if there are similar issues and delays with a survey.
Inspections aren’t possible in some areas during the coronavirus pandemic (depending on whether real estate is considered an essential service), and unlike appraisals, inspections must include an in-person home visit. If an inspection is possible, some sellers nonetheless might refuse to let a home inspector into their house. When this happens, Birchen has added language in the addendum to protect buyers from surprises when they finally do enter their new home. An addendum might also allow the buyer to exit the contract if the seller refuses an inspection; buyers can also request a warranty for major systems if an inspection isn’t possible.
An appraisal could also be an issue. Whether or not an appraiser can go into a home depends on whether your state considers their work essential. If there are problems getting them inside the home, they might perform an alternative appraisal.
If you have concerns about losing your job or being furloughed, ask your agent about including financing contingencies. A financing contingency would allow you to get your earnest money back if your financing falls through before closing. Mortgage overlays are also disrupting some loans, making financing contingencies even more important in this environment. One way to protect yourself as a buyer is to refrain from shopping at the top of your approval limit, which will give you some wiggle room if an overlay is imposed before closing.
Closing during the pandemic
Once you’ve made it through the inspection, appraisal, and title research, your closing will also be different. In a normal world, you might have seven to eight people in a room for a closing. “Two buyers, two sellers, two agents, and two title company closers,” Perna explains. “In today’s world, it’s more like two or three — just the one or two buyers and the closer.”
If your state requires “wet signatures” and you can’t close online, ask what precautions title companies are taking to maintain social distancing. Many companies put the buyer and seller in different rooms, or at opposite ends of a long table. They disinfect in between appointments, and either ask everyone to bring their own pen or give them all new pens to use and take with them after the closing.
Many agents can no longer attend closings, but they can still make themselves available by phone or video conference to answer any questions. Birchen has “done some closings with sellers at their cars because there’s very few documents they have to sign.”
In states that allow remote and online closings, it’ll be much easier. You can log into a portal online and sign documents. Or, if you will need to sign some forms in-person, you might have to work with a remote notary and FedEx statements to the title company after you’ve signed them.
The good news is that most agents and title companies have had plenty of experience with fully online or remote closings before the coronavirus pandemic. Investors selling a home in another state rarely want to travel for a closing, and some sellers have already moved for a new job. Talk to your agent about the options available in your area.
The closer handed you the keys to your new house, and you can’t wait to move in. But can you?
This will depend heavily on where you live. Massachusetts considers moving companies an essential service, but in some areas, you might not be able to book a mover.
Ask the moving company what precautions they’re taking — whether it’s supplying workers with masks and gloves, or wiping down the outside of boxes with disinfectant. To minimize the risk of exposure, you might want to leave non-critical items packed and stored in a garage or basement and only unpack essential items.
If you can move in, clean thoroughly! Consider hiring a service to help (and tip them well), if that’s possible. Unfortunately, you should probably delay any plans for a housewarming party or inviting people over to show off your new place.
Yes, there will be some extra steps to buying a house during coronavirus. If you’ve bought a home before, it won’t be the same experience. But, with the right team on your side, it can be done safely and successfully.
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