Things to consider when buying a home during a pandemic
The world has experienced significant changes due to the coronavirus pandemic. With the lockdowns and border closures, majority of people have been forced to base their routines from home, be it work or study. And with most people — if not all — spending most of their time indoors, personal spaces may start feeling smaller, and you may need a bigger space.
If you were contemplating buying a home before the onset of the pandemic, you should not cancel your plans. You can get even better deals, especially with folks selling their homes due to the destabilization caused by the pandemic. According to the National Association of Realtors, home sales decreased by 18% in April 2020. And as communities and states now reopen, the market is gaining surprising momentum. But before you make that jump, just what should you consider?
- Your budget
Buying a home is not equivalent to getting a cup of coffee on the go. In fact, home buying is a huge financial investment. A wrong home investment can destabilize your operations and even cripple your finances. And the uncertainties surrounding the coronavirus pandemic renders the decision on whether to buy or not even more difficult. As such, you may need to save for one, if you have not started already. But how do you start saving if you do not have a budget in mind? Ensure you come up with a workable budget first before you begin your search for a home.
2. Are you pre-qualified for a mortgage?
If you are looking to buy a home during a pandemic, then you must ensure that you are pre-qualified for a mortgage. While mortgage pre-qualification is often a straightforward process, the lender will need to evaluate facts including employment status, debt, assets, credit and income. These parameters will then be used to determine the maximum amount of funds that financial institutions can lend towards the homeownership project. As a home buyer, getting pre-qualified is vital as it provides you with a realistic idea of how much mortgage you can access.
3. Your real estate agent
In your quest to get the best investment out of your funds, an experienced real estate agent is vital as they will represent you and your best interests in your home search. Real estate agents will also help you find homes that are within your budget, negotiate, and even draft offers. Ensure you work with a real estate agent who knows your location well. If your current real estate agent is not of much help, do not be afraid to break it off and get a different agent. Also, you can use referrals from friends and family as opposed to trying out new agents.
4. Do not overspend
With the current low-interest rates, you can get more value for your money in the current real estate market. However, this doesn’t mean that you should get a higher priced home just because of the low-interest rates. While you should take advantage of the low-interest rates, ensure you do not overstretch your spending budget. Leverage the low-interest rates and use the extra cash to reduce the length of the loan and pay the mortgage.
5. Be ready for bidding wars
The housing market has been slowed by the pandemic. However, it is still very competitive. With the increased competition, you are more likely to encounter bidding wars and even higher home prices as a result of low inventory, mortgage rates, and more potential buyers.
Thus, folks looking to buy homes during the pandemic must learn how to handle bidding wars. A bidding war can force you to pay more than you had budgeted. To avert this, study the market before making an offer. Also, since the competition can be high, be quick in making an offer and finalizing it.
So, is it a good time to buy a home?
Having a lovable home is paramount, especially with the stay-at-home mantra due to COVID-19. While purchasing a home in the precedent situation has downsides and upsides, it is also a unique time to make significant purchases, given the looming uncertainty globally. However, you cannot hold your life down due to the pandemic. If your finances allow, take that leap of faith and purchase your home. The low-interest rates and fewer buyers could see you get your dream home at a greater deal than what you would get during pre-pandemic times.
