Trying to buy a home? Just a few extra precautions and it can be done.
Although the COVID 19 outbreak has ground many industries to a halt and forced people across the country to shelter in place, Americans are still buying homes. For the week ended March 27 — even as large swaths of the U.S. essentially shut down for business, the number of mortgage applications for home purchases was still about three-fourths what it was for the same period in 2019.
RE/Max is seeing some cases where real estate transactions are being held up or coming apart, but a lot of buyers and sellers are banding together to figure out ways to get close the sales.
On March 28 the Department of Homeland Security classified residential real estate as an “essential business” after dozens of states, such as California and Washington, had already lifted stay-in-place orders for real estate agents, appraisers, title agents, and other industry professionals.
Realtors are assisting their clients creative ways to complete steps of the home-buying process—from home inspections, appraisals and closings, while Americans are sheltering in place.
Home inspections are going virtual
Typically home buyers accompany their inspector during the home inspection, but a number of home inspectors are now using live video chatting apps like FaceTime or Zoom to let home buyers tag along remotely. This keeps buyers at a safe distance for home inspections.
Lenders are cutting back on in-home appraisals
Some appraisers are turning to computer algorithms to value properties instead of sending appraisers to inspect homes in person. Freddie Mac and Fannie Mae, the government-backed mortgage giants, recently directed mortgage lenders to reduce the need for appraisers to inspect the interior of a home for eligible mortgages. All but non-conforming mortgages, such as FHA loans, an in-home appraisal is still required,
Final walk-thrus are still taking place
Most purchase agreements allow home buyers to do a walk-through of the house shortly before closing to make sure the home is in good condition—testing appliances, windows, doors, outlets, and other items—and double-check any home inspection repairs that the seller made. Home buyers are taking safety precautions in the wake of Coronavirus. Some buyers are asking sellers to leave all doors and closets open so that they can see the entire house without needing to touch any surfaces.
More buyers are doing eClosings
Digital real estate closings, or “eClosings,” give buyers and sellers the ability to sign settlement documents electronically—meaning parties don’t have to meet the notary at the title office or at their home. Most eClosings are orchestrated by title agents, who often lead individuals through the required paperwork via video conferencing.