9 Tips for Home Buyers Who Are Looking to Buy in the Near Future
Last week, we shared some tips for what home sellers can be doing during the real estate market “pause” caused by COVID-19. This week, we want to speak to the home buyers out there.
Whether you were looking for a home before the pandemic, are still trying to look now or you have plans to buy when things get back to normal, there are plenty of productive things you can be doing during this slow period to make your home search more effective. You can get better prepared so that there are as few challenges as possible when the time comes to make your move.
Here are some strategies home buyers should keep in mind:
1. Preparing for a “New Normal”
With the impact that the coronavirus outbreak has had on financial markets and the economy in general, there will be some changes that home buyers can expect. Things may never quite be the same as they were just a few months ago. At the very least, the rest of 2020 will operate a little differently. As a prospective home buyer, you have to be willing to accept that some things are going to change and take the time to understand what those changes will be. We can’t fully predict everything at this point, but we can safely say that real estate probably won’t be “business as usual” any time in the near future.
2. Understanding Increased Mortgage Scrutiny
As a home buyer, you have to do everything in your power to position yourself financially in order to qualify for a mortgage loan. This will likely be the biggest change our industry will face in the coming months and maybe years. Any loan that is considered “non-traditional” will be harder to secure. This might include jumbo loans, VA/FHA loans, non-qualified mortgages and other types of mortgages that allow for special qualifying standards. You want to be careful about building up credit card debt, even if you are trying to conserve cash during this economic slowdown.
You can expect certain financial factors to be more scrutinized when trying to qualify for a home loan in the current market:
- Credit Scores
- Work History/Current Employment Status
- Debt-to-Income (DTI) Ratio
- Minimum Down Payments
- Missed/Late Payments
3. Fluctuating Interest Rates
The mortgage market has been a little crazy lately. Interest rates have stayed low, but loans are proving harder to get. The rates may fluctuate wildly until we return to more normal market conditions. You will want to work closely with a mortgage lender you trust and lock in a good guaranteed rate when you can. Again, this may not be as easy as it used to be, so success will depend on your preparation, planning and timing.
4. Getting Your Finances in Order
Understanding the factors of numbers 1-3 above, you will want to use this time to get your finances in order. The pandemic is affecting many of us financially, so it will take some work to put yourself—and keep yourself—in a good financial standing. This way, when you start applying for a mortgage loan, you will have an advantage.
5. Reevaluate Your Housing Needs
Check out our blog article from a couple weeks ago about Reevaluating Your Housing Needs. Use your time at home to really think about what will be most important in any new home you buy. Things like having a home office space or personal gym may be more appealing to you now than they were before, while other things may be less meaningful.
6. Getting Pre-Qualified or Pre-Approved for Your Mortgage
Having a healthier financial standing will help you get pre-qualified (or even better, pre-approved) for your home loan. This gives you a head start before you even begin your home search. And though there may be more houses on the market than there were before, sellers are still going to be critical of any offers they receive. Having a pre-approval letter from your mortgage lender with your offer automatically makes you look like a better buying candidate. It means you present less of a risk that there will be a problem during the transaction.
7. Taking Advantage of Online Home Searches
You can easily see what’s currently on the market through online home searches. Some homes and agents will even offer virtual tours and videos that go beyond just the pictures and descriptions. Touring homes in person is not an option in most areas right now, so technology can help facilitate your home search and accomplish other important real estate processes remotely. At the very least, you can get a list together of homes you want to preview when it becomes safe to do so again.
8. Buyer Beware
Online home searches can help you see some properties and get a better feeling of what you are looking for in a house or condo. However, you want to be wary of buying a home sight unseen. Nothing can quite compare to being there in person, feeling the flow of the home, getting a sense of the living spaces and being able to look at certain details with your own eyes. Many home listings are professionally staged and the photography is designed to showcase the property’s best features. There’s no way to see and experience everything virtually. Unless you are in a serious rush to move, you may want to wait until you can preview homes in person.
9. Talk with a Real Estate Professional
You will want to find a real estate agent who is tech-savvy and can help you through the process of buying a home remotely—or help you get better prepared to buy at a later date. It’s important to keep up with what’s happening in the market under such unique and uncertain circumstances. Now more than ever, it’s very worthwhile to have a real estate expert on your side to provide professional insight and personal guidance.
Check out the latest Cyr Team Minute:
If you are planning to buy a home in Southeastern Pennsylvania or the surrounding tri-state communities, contact The Cyr Team for more advice and help with your home buying preparation. We’ll be happy to share our expertise and get you moving in the right direction.