As the coronavirus pandemic continues, the real estate industry has found ways to adapt and continue, as well. Changes to the home buying process have been implemented to make the transaction safer for all parties involved, including the buyers, sellers, agents, appraisers, inspectors and lenders. Some of these changes could become the norm long after the pandemic subsides, and it's clear that COVID-19 will have a hand in shaping the future of home buying.
People who are looking to buy now are doing a lot of the legwork online. Although there has long been a trend in the industry toward more of the home buying process moving to the virtual world, COVID-19 has sped up the timeline. Buyers are moving even more of their home search online now, from looking for potential homes to closing.
Before starting a home search, it's more important than ever that buyers work with lenders and understand what price range is realistic. Currently, some lenders are pausing or increasing standards for FHA and VA loans, not allowing buyers to lock in rates, and raising minimum credit score requirements for conventional loans. It's also important to find an agent to guide you through the process and it's many ever-changing moving parts that COVID-19 has brought. Agents are conducting some meetings virtually and have online document signing software to keep the process as safe as possible. It's important to make a human connection with an agent, even if you are meeting them via videoconferencing software, because that person will be your advocate through these new and evolving home buying processes.
Open houses are not common during the pandemic. Instead, agents and sellers are opting for virtual home tours and live-streamed open houses. Some buyers have even bought without ever stepping foot inside their new home. When buyers do tour houses in-person, they should expect to wear protective gear, including shoe covering, masks and gloves. Sellers are also deciding to leave their interior doors and some cabinets open and all the lights turned on so that sellers and their agents touch as little as possible while inside the home.
Other modifications to the traditional buying process include desktop and drive-by appraisals and unaccompanied inspections. Desktop and drive-by appraisals allow appraisers to use market data, photos and exterior views to assess a home's value without having to enter the home, protecting both the appraiser and the homeowners. Similarly, it's also common now for home inspectors to enter homes by themselves instead of accompanied by the buyers and agent. Inspectors follow safety guidelines while in the home and then share their report, photos, and videos.
COVID-19's effect on the closing process has focused on minimizing person-to-person contact and time spent signing documents in enclosed spaces. An increasing number of states are allowing online signatures and virtual notarization. Other alternatives to traditional closings are also being used, including curbside closing, where buyers stay in their car while documents are shuttled back and forth to them to sign, and exchanging documents through glass or from 6 feet apart. In any case, as many documents as possible will be signed online, and only essential people will be invited to the closing, so the traditional closing celebrations that brought together happy buyers, agents and others are on hold for now.
It remains to be seen which of these pandemic-prompted changes will persist after COVID-19 subsides, but the changes that harness the power of technology are likely to make a lasting impact.
For more on COVID-19 and real estate, check out HomeLight's full report from their Q2 Top Agent Insights Survey.
This is a collaborative post. All views and text are my own.
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