With social distancing being an important part of life at the moment and so many parts of the economy suffering the effects of state lockdowns, some are worried about how all of this will affect the housing market. This is especially a concern for those who were hoping to buy a new home and have seen their plans potentially derailed by the pandemic. Is this a good time to consider buying a new home, assuming that it’s even safe to do so?
The answer may be surprising.
It’s a Buyer’s Market
With the current state of the world, the demand for real estate has dropped significantly. This has left those who have already listed homes for sale or who were planning to list over the summer in a position where there are far fewer people looking at their properties. For some sellers, this isn’t much of an issue; they can simply wait it out and stick to their previous plans. A lot of sellers don’t have that luxury, though. This creates a buyer’s market where a lot of sellers are willing to consider offers that they wouldn’t have in the past, giving potential buyers a lot more control in the home-buying process.
As the name suggests, it’s always good to buy in a buyer’s market. It isn’t necessarily a great time to list a home for sale, of course, since you’d likely have to settle for a lower offer than you were expecting if you want to move the property. This usually helps to balance out the market, with listing rates slowing down to meet demand until things pick back up again. This particular buyer’s market is a bit different than a lot of past ones, though.
Demand Is Staying Low
Most of the time, a buyer’s market is caused by shifts in the economy that have people trying to save money; an example of this would be a recession. These economic shifts temporarily reduce the number of people who are willing to take on large debts, creating a glut of sellers trying to entice a smaller pool of buyers. The buyer’s market typically fizzles out once the number of sellers shrinks or the economy stabilizes.
In the current buyer’s market, the economy certainly plays a factor. There is an external factor at play here as well, however: The physical distancing that COVID-19 requires has added additional worry about open houses and other forms of interpersonal contact that are traditional when buying or selling a house. There’s still a lot of uncertainty surrounding the pandemic, including how long it will last, so with this external factor and the currently stunted economy we could see demand stay low for longer than you would expect in a buyer’s market situation.
This isn’t to say that the market won’t recover, of course. Some states have already started reopening non-essential businesses and other parts of the economy, and other states have plans to start reopening soon. The economy will likely stay sluggish for a while, but reopening is the first part of recovery. Even the pandemic is becoming something less of a factor as people continue to practice social caution and science continues to work toward treatment and vaccine options. While market recovery may take longer than in the past, a recovery will happen, and the good deals that buyers can find now will become less common as things move forward.
If you do decide to shop for a home in the current market, make sure that you’re smart about it and stay safe. Maintain all physical distancing practices while looking at homes, even if there is only a seller or agent present. Ask whether no-contact options such as virtual tours or virtual closing with digital signage are options, and if touring the property request that any doors or other barriers be opened before you arrive to reduce contact. Wear a mask, bring hand sanitizer and take the same precautions that you would in any other social situation. This may seem excessive for viewing a home, but keep in mind that these practices not only protect you, but also protect the seller and agent as well.
If you’re looking to buy a home this year, you probably know that lenders look at your three-digit FICO credit score to determine your credit worthiness.
If you’ve done your reasearch, you know that the best mortgage interest rates go to those with scores in the mid to high 700s. For Federal Housing Administration (FHA) loans, scores in the mid to high 600s will suffice. Of course, qualifying for a mortgage also relies on other pertinent financial info such as your salary, debt-to-income ratio, down payment, etc.
What If Your Score Isn’t What You Want?
However, if you’ve made some financial missteps – like many other would-be home buyers – your score may not be high enough for a specific loan program that gives you your preferred interest rate. You know what score you need for that loan program, but the big question is: How do you achieve that specific FICO score?
Predict, Plan and Work Toward That Score
To help you qualify for the mortgage and interest rate you want, FICO has introduced a new program called “Score Planner” that will be available through participating banks, mortgage lenders, credit card companies and others.
Best Practices Remain The Same
This tool will provide you with a number of specific steps you should follow to improve your FICO score within a set amount of time. Each step will be customized for your personal financial situation and describe in detail what you must do to move your FICO score higher.
Of course, the best action to maintain and improve your credit score remains to pay all your bills in full, on time, every month; reduce any debt you have with credit cards or loans as much as possible; do not use more than 30% of your available credit; and refrain from opening new credit cards and loans until after your mortgage is closed/settled. If you continually practice those steps, your credit score will remain strong.
Selling your home is a big step, but we know the best time to list a home for sale… and we’ll share it with you: NOW!
Yes, spring is the busiest season of the year for home sales. Buyers have been on the sidelines during the winter months. The holiday season is most people’s primary focus and they would much rather be celebrating with friends and family than spending time packing and searching for homes. Up north, many buyers avoid home shopping in the winter months to avoid inclement weather.
In the spring, homes look more inviting when the spring colors show up. School schedules are ramping up for end-of-the-school-year activities, but also shine a light on the quickly approaching summer, which historically has proven to be a great time for families to move and transition kids to a new home.
With all these reasons – and more – buyers are out in full-force, searching for their perfect home. If you list your home for sale soon, you’ll be able to capture the attention of the greatest number of these motivated and eager home buyers.
There are a few steps you should take to ensure your home is ready for the parade of home buyers gearing up to buy. Keep reading to discover the seven smart steps to a successful home sale this spring. Let us know if you would like to arrange a free consultation about selling or buying a home!
- Set a Realistic Price. Buyers know when a home is overpriced based on the competition and they’ll skip touring homes that aren’t a good value. Our expertise will help you arrive at a sales price that will attract the greatest number of buyers and get your home sold.
- Fix It Up. Smart buyers recognize a well-maintained home. Don’t give them a reason to leave your home during a tour. Get the to-do list done before listing your home for sale!
- Clean, Clean, And Clean Again. After the fix-ups are complete, complete a thorough deep cleaning of your home including rug shampooing, window washing, and cleaning every corner. A clean home smells great, looks inviting, and sells faster.
- Stage It. If you don’t know how to make each room look welcoming using the furniture and accessories you already own, we can help you stage your home to help it look its best. Staging beautiful vignettes in each room makes it easier for buyers to imagine themselves living in your home. If buyers can do this, they will be more inclined to buy it!
- Leave During Tours. If you want buyers to feel at ease touring your home, don’t stick around. Go for a long walk, run errands, visit a neighbor or get a coffee/snack. Without your presence, buyers will be free to check out every nook and cranny and talk about your house, which is a good thing if they are serious about buying.
- Be Ready To Negotiate. Treat every purchase offer as if it’s the only one you’ll get. Some offers can be accepted as-is. Otherwise, no matter what the offer and terms are, counteroffer. We will help you craft the best counteroffer to get your home sold for the best price in the shortest amount of time.
- Go With A Pro. Selling your home on your own can be done, but if you have a job, a family, a full schedule of activities, hobbies, and enjoy a little breathing room each day, you’ll want to hire a real estate professional like us to get your home sold. Our expertise and experience will give you the peace of mind that your home will be sold in the most hassle-free manner.
If you have any questions about the home selling process, or how best to get your home ready to sell, please do not hesitate to contact us! You can either use the contact form below or call/text us at 407-212-2301.