Home is where the heart is shelter-at-home order is. As a result, it’s sparked a significant re-evaluation of how we look at our space—what we need from it, what we dream for it and what makes it comfortable (or not) day after quarantined day. For some, the pandemic has led to significant re-organization efforts. For others, it’s been the catalyst to finally (or spontaneously) purchase a new house. But what’s that process really like during COVID-19? And how has this changed the market for the foreseeable future? We talked to a couple of home buyers, a realtor and a mortgage expert to find out.
1. ‘Fixer Uppers’ Are Out, ‘Turn-Key’ Is In
According to New York real estate broker Jocelyn Cloder, “very few people want a ‘fixer-upper’ right now. They want to pack up their suitcases, buy some furniture or bring what they already have and move right in.” She’s also seen an interest in fully furnished homes, which require as little work (and strangers coming in and out) as possible.
On the flip side, if you are willing to do some work, you may have negotiating power. Says Cloder: “Think a very dated kitchen or bathrooms, damaged floors, old carpets—a great deal can be found on a home that requires renovation or updates.”
2. Outdoor and Home Office Space Is a Must
“People want a yard for the kids to run around, a place for the dog to play and a quiet place to enjoy a cup of coffee,” Cloder says. They also want to know what the home office set up looks like. “Home has taken on a new level of importance. It’s where you sleep, where you cook and eat every meal, but it’s also where you sit in front of your computer.”
3. Virtual Tours Are the Norm
One couple who bought in Brooklyn reported that virtual tours were their lifeline during the pandemic. In fact, they watched the videos on repeat before deciding to book an appointment to go inside. “In normal times, we’d have visited the property more than once before going all in,” they said. “But we still keep going back to the virtual tour even now that we’ve bought it just to admire the space.”
Cloder adds: “Virtual tours were a great substitute when they were the only alternative, and I still think they can be helpful in narrowing down a buyer’s list of favorite houses. Still, once a buyer thinks they have found the right house, they should try to see it in person.”
4. As Are Virtual Inspections
“Your broker should be able to recommend a diligent inspector who will walk through the house, take the necessary photos and put together a complete report for you,” Cloder says. “Then, before they leave, they will FaceTime or Zoom with the buyers to walk through the most important safety and health concerns and go over anything of note.”
The Brooklyn couple explains: “The key is to find a trustworthy inspector. Our realtor referred us to one and we were on Zoom during the entire inspection. After that, our home inspector put together a comprehensive PDF report and sent it to us. Everything checked out as normal, so we went ahead with the contract signing. All the payments were handled through Venmo.”
5. Sales Are Speedier
One family who relocated to Shelter Island said that the urgency of the pandemic gave them clarity when it came time to buy. “Our [pre-COVID] ‘Goldilocks’-style hunt for imperfections was replaced with a punch list of things we needed a house to have right now.” Things like outdoor space, a bedroom for every kid, etc. In other words, they just needed to get it done.
Cloder confirms this shift. “Priorities have definitely changed,” she says. And as a result, sales are speedier. “I am finding that many banks are waiving interior appraisals and instead doing a drive-by and using comparable homes they see online to appraise a property.” In some cases, banks are even waiving the appraisal altogether. “The one piece of advice I have for new buyers is to have their finances in order and organized in the early stages of a search, so they can move quickly on a home when they find the right one.”
In fact, most sellers are only allowing showings to buyers who are qualified and ready to go. “When I show houses and schedule appointments, I must send the listing agent my buyer’s pre-approval letter so the seller knows the buyer is ready, willing and able to submit an offer and move quickly. For a seller, this also helps prevent excess traffic into their home during such a fragile time,” Cloder adds.
6. Deals Are Still Available, But Beware the Bidding War
There was a pandemic sweet spot when the market stalled, but right now, many houses are going to the “best and highest offers,” according to Cloder. The New York Times confirms this, saying that houses offering wide open spaces in upstate New York are going for $50,000 or more above the asking price—and are typically bought in cash.
One parting thought from Caroline McCarthy, customer success manager at Own Up, a company that helps consumers get fair deals on home financing: Proceed with caution if you find yourself in the midst of a bidding war. “The supply of homes for sale in the U.S. has fallen to the lowest level since 2012,” she says. “These conditions are associated with a ‘seller’s market’ and tend to drive higher prices. But overpaying for a house now will make it nearly impossible for you to turn a profit when you move out some day in the future.”