These are undoubtedly extraordinary times. We’ve all felt the impact of COVID-19 in one way or another. Many businesses and industries have taken steps to respond to the pandemic, making adjustments to serve customers in unique and unprecedented ways — and the real estate industry is no different.
Buying or selling a home in today’s environment is quite different than what you may have experienced (or heard about) in the past. If you’re considering buying or selling your home, here’s what you might encounter:
You may have to tour homes virtually.
With social distancing restrictions required in most markets, many buyers are house-hunting online using videos, 3D walkthroughs, and even interactive floor plans. And they’re videoconferencing with their real estate agents for information and tips on what to look for in a home. Some online real estate websites are even hosting live-stream open houses for sellers and real estate agents to make the home-buying experience feel more personal.
While some markets still allow in-person home tours (with significant restrictions), you should probably get comfortable with a virtual tour if you’re planning to buy a home soon.
There may be a limited supply of homes available.
Many sellers are uncertain about the economy and their future, and some are choosing to not sell at this time. This limits the supply of available homes. But if you’re pre-approved for a mortgage, you may have the upper hand when negotiating for the home you desire. Sellers will see that you’re serious and may accept your offer over one from another buyer.
The application process may be completely digital and require more verification.
Throughout the past decade, many financial institutions, such as Wells Fargo, have moved their mortgage lending process online. And now, the pandemic has made this transition essential to providing customers with the best service possible. For example, at Wells Fargo, you can apply for your mortgage online and securely upload required documents. Plus, you can track the status of your application using yourLoanTrackerSM.
It’s important to note that because of the current economic environment, you may need to verify your income more than once before a mortgage approval decision is made. Our Home Mortgage Consultants are happy to answer your questions every step of the way.
Alternative appraisals may be used for your mortgage.
Your new home serves as collateral for your mortgage, and an appraisal determines how much that collateral is worth. Most lenders request an onsite appraisal, where the appraiser inspects a home and reviews comparable home sale prices in the area to determine its value.
In light of the pandemic, the Federal Reserve recently eased the appraisal requirement for most mortgage lenders. Now a lender may use an alternative appraisal for certain types of mortgages, as long as the appraiser uses a combination of the following: tax records, property sketches or pictures, videos, or drive-by inspections of the home. And in some cases, an appraisal may be delayed for up to 120 days upon closing.
Your lender or real estate agent should let you know which type of appraisal will be used and how to prepare for it (if at all).
Your closing may be entirely digital.
Depending on where you live, you may not be able to close on your mortgage in person. Instead, you may sign all your documents digitally, meet with a notary via video conference, and finalize everything online. If an e-closing is not possible, some lenders and title companies have opted to hold a drive-thru closing, where buyers provide documentation and signatures from the privacy of their vehicle. In some instances, buyers may choose to ask their agent to join them “virtually” to answer questions or review the documentation together.
Ready to get started?
When you’re ready to buy, we can help. The recent pandemic has changed some of the ways we’re doing business, that’s true. But we’re prepared to answer any mortgage questions you have and guide you through the process. We have the answers you’ll need to help you enjoy a positive home-buying experience.