Navigating the Housing Market as a First-Time Homebuyer During COVID-19

Nov 19, 2020

First-Time Homebuyer

You may have imagined your first home buying experience. You would tour homes with a real estate agent, submit an offer, and a few months later gather for closing. Whether you look at two houses or twenty, buying a home for the first time can be very exciting.

COVID-19’s impact has meant a lot of changes in buying a home. You can still have a smooth experience when purchasing a property, but some things have definitely changed.

Still, there are many advantages to the current housing market, like historically low-interest rates. For the first-time homebuyer, now might be the perfect time to make that leap.

Tips for the First-Time Homebuyer

As a first-time homebuyer, you may not know what to expect without any comparison to a pre-COVID buying experience. Here are some tips you can use to help you navigate home buying in general, with the differences you will see as a result of the pandemic.

1. Decide What Type of Home You Want

First things first: you need to know what you want. When you begin searching, you’ll use criteria like the number of bedrooms, square footage, and features to focus on the type of home you want.

You can start by figuring out the neighborhood you want to live in. Do you want to be near certain amenities or in a particular school district? Online searches of sales in those neighborhoods will give you an idea of the price range.

COVID-19 has had an impact on the types of homes that people are buying. Buyers are trending more to suburban areas that are less densely populated.

Buyers are also considering what they need in terms of living space. If working from home will be long-term or permanent, it makes buyers look differently at the layout of the house and rooms needed.

2. Get Your Financing Lined Up

Part of buying a home is figuring out your budget. From there, you will want to go to a bank and get a pre-approval for your home loan. When you put in an offer, you will want to submit a pre-approval letter from your bank so that the seller knows you have financing lined up.

A pre-approval means that the lender has checked your credit and verified the documentation to approve a specific loan amount. Lenders will review your assets, employment, income, and more.

Each lender has different requirements and can talk through the options with you. What has changed a lot during the pandemic is an increase in unemployment or unsteady employment. You will be in better shape to qualify for a loan if your job is stable.

By having your financing ready, you can move quickly when you find the right home.

3. Prepare for a Different Type of Buying Experience

Lots of in-home tours are unlikely due to COVID-19. You will not have the experience of driving around going to open houses, but there are ways to view homes you are interested in.

To start with, find a real estate agent that you can trust. You will need to rely heavily on communicating with the agent throughout the process and want someone you can work with easily. The agent will take care of setting up any showings for you.

Many home tours will be virtual, and you will only set up in-home tours if you have a keen interest in the property. You will need to follow any state requirements and homeowner wishes regarding safely entering a home for a tour.

Because of COVID, some homeowners are not listing their homes unless they had already planned to do so. This means that in some regions, inventory is very low. In these areas, it is a seller’s market.

You may need to view homes as soon as they become available and be prepared to put in an offer if you find one that you like. Some areas are seeing home prices similar to pre-COVID times while others are seeing bidding wars due to low inventory.

If you find yourself in a bidding war, there are some things you can do to win over a seller:

  • Present your best offer from the start
  • Waive some contingencies, such as an inspection
  • Write a letter to the sellers, telling them about your dreams for the home
  • Have your pre-approval from your lender ready
  • Increase your down payment or earnest money deposit
  • Offer to close quickly

By making your offer more attractive to the seller, you can edge out some of the buying competition.

4. Enjoy Your New Home

When you do finally find a home, take some time to enjoy.

The closing will likely look different. In pre-COVID times, the closing was usually celebratory with your real estate agent. Instead, you will likely find yourself at the title company wearing masks or limit who can go into the room to sign the purchase documents.

On the bright side, you will have no pressure to move in quickly after closing! New homeowners have found that they can take their time settling in. No one is going to expect that you throw a big housewarming party.

It may not have been what you thought your first home-buying would be like, but you can still find ways to memorialize the occasion.

Finding a Lender

As you begin the process of buying your first home, you will want to work with a lender that has many options. There are different programs available for first-time homebuyers, from conventional loans with fixed rates to loans that have down payment assistance.

Contact us today to speak to an experienced lender about buying a home, or fill out this form to get a quote.

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