4 Tips For First-Time Homebuyers In A COVID-19 Market

Dated: August 3 2020

Views: 228

4 Tips For First-Time Homebuyers In A COVID-19 Market

 

In early 2020, first time home buyers across the country were bracing for a challenging spring real estate market. Prospective buyers were contending with low inventory, especially in areas with tight regulations on new home building. Then the coronavirus hit the U.S. 

Homebuyers hoped they might land a buying opportunity amid economic uncertainty. While that situation may still occur for some, housing shortages and challenges for buyers continue into the summer season. Why is this?

On the supply end, current sellers are opting to take their homes off the market rather than be suspended in real estate limbo. In addition, with the ever-changing disruptions to life, sellers have relegated housing decisions to the bottom of their priority list.

On the demand side, some buyers haven’t yet felt the full economic impact from COVID-19 and others are experiencing minor financial setbacks. These buyers are cautiously optimistic to lock in low-interest rates and keep their home buying plans on track. Regardless of their situation, all are facing the same issue: too many buyers for too few houses.

Below, we’ve outlined the top four pieces of advice for first-time home buyers to thrive in a roiling COVID-19 market:

  1. Have a backup plan - Uncertainty is the new norm. As a buyer, you'll want to make sure you have a contingency plan in place if things go south. What if government stipulations change between the time you place an offer and sit down to sign closing paperwork? What if you have to break a contract based on a contingency clause you can no longer fulfill? It's good to have options in this climate.

  2. Opt for a 20% down payment - We recommend planning to put down a conventional down payment amount, if possible. A 20% down payment typically removes the need for private mortgage insurance (PMI). The mortgage market is volatile. Due to the coronavirus, a domino effect involving financial markets, government policy, and economic forecasts caused investors to reassess their risk tolerance. Some of these investors provide the capital for lenders to offer new mortgages to home buyers. That means there's a strong investor preference for mortgages that conform to the funding criteria set by Fannie Mae and Freddie Mac.

  3. Start the process early - The current health climate is causing delays in the home buying process. The overwhelming increase of refinancing applications has slammed lenders and many employees are now working from home, further belaboring the process. In addition, home appraisers, the median age of which is 55, are asking to have quarantine clauses built-in. 

  4. Partner with a real estate broker who cares - Partner with a realtor who is willing to go above and beyond to help you match with your dream home during these unprecedented times. 

RE/MAX Advantage Plus Real Estate Professionals are adapting to the current climate by offering clients virtual home tours, video consultations, and contactless closing options! In the market for your first home? Contact your local RE/MAX Advantage Plus professional today to get started!

Latest Blog Posts

Twin Cities Real Estate: Why Now Might Be The Perfect Time To Sell Your Home

In 2020, the COVID-19 pandemic upended the spring home-buying season, driving buyer interest into the usually slower fall and winter months. But in 2021, the housing market has found its footing and

Read More

3 Reasons To Choose A REMAX Advantage Plus Professional To Represent You During Your Next Real Estate Transaction

With expertise in the real estate market and process, your RE/MAX Advantage Plus real estate professional is your trusted source of information to help you make the best decisions. We know there are

Read More

Top Three Reasons Spring 2021 Is The Best Time To Sell

Spring is a busy time of year for the real estate market! Warm weather and the end of the school year brings out droves of eager buyers ready to place an offer on their dream home and move in before

Read More

Manufacturing and Hospitality Industries Start to Show Signs of Recovery

Article provided by Mike Ouverson, Leader One Financial COVID-19 dealt a harsh blow to the global economy and wreaked havoc on Americans across the country. While many Americans are still

Read More