As a result of the coronavirus and COVID-19, along with stay-at-home orders and economic difficulties, life for most Americans has irreversibly shifted. And many say this new paradigm will persist and become the new normal. Real estate, while still chugging along to some degree, has also been affected – not only by health concerns engendered by the pandemic, but also by a volatile stock market, unemployment, and fears of a recession. So, as we enter the busiest of all home buying/selling seasons, what will things look like? To help answer that question, we’ll examine 5 ways buying a house will be different in Richmond this summer.
1. Change, Uncertainty, and Market Swings Will Rule
One easily observable way that buying a Richmond house will be different this summer is in the changes from the traditional way things have been done. The home-buying process will be different in a host of ways – from virtual home tours to COVID-19 clauses in contracts to the closing process.
In addition, uncertainty will also color everything. These uncertainties – both potentially positive and negative in outcome – include “how coronavirus is impacting the housing market overall, what to do if you’re worried about paying your mortgage and whether a pandemic-caused recession might help some families finally afford a house.”
There will also be hard-to-predict local-market swings. According to industry watchers, “residential real estate looks very different depending on the city. It’s a complex situation that’s changing not just by the day or week, but by the hour.” So be sure to contact your local agent to find out what’s happening in the Richmondreal estate market. (To discover more, just call 8043878734.)
2. Pre-Approval Will Be Even More Important
Real estate pros always advise buyers to get pre-approved for a mortgage before setting out to do any serious house hunting. Another change is that pre-approval will be more important than it has ever been this summer. And you don’t have to risk your health to do it now.
“[G]etting preapproved before you make an offer on a house is a must. You don’t have to leave home to get preapproved; you can submit an application online or over the phone. And if you’re in a hurry, applying with an online mortgage company can help you speed through the application process.”
3. Showing/Viewing Homes Will Move Online
A big way that buying a house will be different in Richmond this summer will be in how houses are shown by sellers and viewed/toured by buyers. A large portion of it is going online and going virtual.
“Virtual home tours and live-streamed open houses are replacing in-person showings. Nearly three-fourths of real estate agents in [an] NAR survey said they’d seen home sellers stop holding open houses.” Real estate pros are advising buyers to adapt to these new conditions and to take precautions for the rare in-person viewing.
4. Appraisal, Inspection, and Closing Protocols Will Change
Similarly, appraisals, inspections, and closings are other aspects of how buying a house will be different in Richmond this summer. Precautions must be taken to reduce exposure to the coronavirus, and these are areas where this will be felt.
“Protocols for home appraisals have also changed. Fannie Mae and FreddieMac, the government-sponsored mortgage giants, have directed mortgage lenders to reduce the need for appraisers to perform in-home inspections, allowing greater flexibility for drive-by appraisals for conventional loans.”
Further, home inspections will take place without the typical presence of “homebuyers tagging along with the inspector – although some inspectors are using video chatting apps to let buyers join them for the inspection remotely in real-time.”
And then there will be far more e-closings in states that allow it. Basically, e-closing allows almost all of the processes to take place remotely and electronically, thus keeping all parties safer.
With e-closing, the “process is digitized and the entire loan package is electronically signed and notarized in an eClosing. This includes the promissory note, which is known as an eNote when it is digitized. Because everything is done digitally, the closing appointment can happen either in-person or remotely via audiovisual technology. When completed, the necessary documents are electronically transferred to and recorded by the county.”
5. Lending Requirements Will Tighten
Lending requirements will also likely get tighter this summer – even though mortgage interest rates are at near historic lows.
Owing to the coronavirus, here’s what happened: “The Federal Reserve implemented two emergency interest rate cuts since the coronavirus outbreak, bringing the yield on Treasury bonds to almost 0 percent. Furthermore, the stock market crash can have an effect on interest rates, too. When investors start thinking the stock market is too risky – like right now – they sell their stocks and buy bonds. The increased demand pushes the price of bonds higher. The higher the price of bonds, the lower the interest payment – called the yield – is relative to the price. When bond yields are lower, mortgage rates are lower, too.”
But the downside is that it may be harder to get a mortgage with higher credit scores required. “Chase now requires borrowers to have a 700 credit score and a 20 percent downpayment to get a mortgage.”
How Buying a House in Richmond Will NOT Be Different This Summer
There are in fact more than these 5 major ways that buying a house will be different in Richmond this summer, but these should help you be prepared for what lies ahead. But one thing has not changed and has become even more critical – and that is the necessity of having a qualified local real estate in your corner.