Tag Archive for: COVID

The most important things for homebuyers to consider when purchasing a home are:

  1. Being able to afford a home based upon one’s situation in life
  2. Not over-paying for a home based upon its market value
  3. A home’s location – What do the neighborhoods, school districts and surrounding area look like?
  4. A house’s age and the age of its components

Notice how security is an aspect you can’t ignore with the prospect of purchasing a home. It’s only natural to have hesitation about buying a home as it’s a big investment. Furthermore, feeling a sense of security goes beyond the financial commitments, which are required from buyers as they move forward with their purchase. If you lack security, you’ll be without peace taking another step toward homeownership. It’s also important to note that three of these four considerations listed above directly relate to money.

Tops on the list is paramount, because if your circumstances in life won’t allow it, you can’t or perhaps shouldn’t purchase a home. Home affordability comes in all shapes and sizes. What might be affordable to buyer A, isn’t feasible to buyer B. Being able to afford a home relates to the ability to budget properly for each and every cost associated with the purchase. Your debt-to-income ratio might be the surest way to prove to yourself as well as a lender, you’re able to follow-through with a home purchase. Besides your debt-to-income ratio, you should also reflect upon how much of a mortgage you can afford? You may be approved for borrowing a certain sum, but that doesn’t necessarily mean you should take on that loan. The underwriters who dabble in rating an applicant’s ability to purchase will ultimately examine a buyer’s gross income, outstanding debt, assets and liabilities. They’re going to probe to see what demands have been placed on the buyer’s income. They’ll also forecast, as best they can, to ensure the bank’s ability to get paid back in the future isn’t at risk.

Secondly, buyers and sellers have been more cautious with the drastic increases in home appreciation since the onset of the pandemic. While the pandemic has vanished, home prices continue their upward climb. Since the beginning of COVID, when real estate sales were restricted, home prices have risen 54.8% in the Greater Scranton market.* A market recently named as the most affordable in the country. Again, while there are sales to be had right now, in fact we’re entering a time of the year where homebuyers will discover some of the best premiums around, buyers should exercise prudence. How long do they intend to live in the place they’re thinking about buying? Their offering on a property may not align with its value and might place undue hardship on the homeowner, if they need to sell a few years after their purchase. We would recommend living in a home for at least seven or more years at the risk of taking a loss. Though homes are generally a solid investment, there are no guarantees. If you need the freedom to move at a moment’s notice, within a shorter time frame from when you purchased the home, you might want to refrain from buying until your circumstances change.

For some buyers, a home’s location is the first litmus test it must pass. If the setting isn’t appealing or the property – though it has virtually everything the buyer is looking for – is in a non-ideal section of town or the purchaser has a family/children and thus schools are high on their list, then it’s hard to overlook locale. We would suggest reviewing pros and cons of various listings as it relates to their whereabouts. You can’t change their bearings, so start there and rate how important distances to work, school, daycare and shopping are, for instance. Look into traffic patterns and noise levels in particular parts of town. If school districts are important to you, target homes in the districts you would prefer to live. Scope out the home’s surroundings. Catch a glimpse of the area on the weekends, during the week, day and night. Is the neighborhood kid or pet friendly? Is the home in a walkable community?

Finally, the vast majority of homebuyers aren’t acquiring a new or newer construction home, one that’s less than ten years old. Being that many buyers are moving into a house that has been around the block, we’d certainly recommend a home inspection as a contingency to the purchase. Besides that, over time, a home’s elements begin to display patterns of behavior and likewise, deterioration. What parts of a home should you keep your eyes on? Windows, roof, HVAC (heating/cooling) system, foundation, to name a few, but again, call in the professionals, such as a reputable home inspector. They’re more than capable of assessing the age of a house’s components/appliances. A few decades after the construction of a home, repairs become more common, and thus as a prospective buyer it’s important to understand what your yearly maintenance/repair costs might resemble.

 

* Greater Scranton Board of REALTORS® stats; median homes sales for March 2020, October 2022

Flexibility quite often was an issue over the years within the real estate industry. Whether it was buyer representation or technological advancements, evolution occurred at a painstakingly slow pace. As someone who witnessed the latter, it was obvious how subpar response to consumer need and demand had taken place. I hope we’ve learned our lesson, but even so I have my skepticism.

Nevertheless, technology has come a long way: More recently, real estate tech has closed the gap, providing homebuyers and sellers more options for both searching and showcasing properties. We’ve experienced a deviation in how consumers are approaching digital content as a whole. Smart devices, cord-cutting, social media and videography have provided opportunities for real estate companies to connect with consumers earlier in the process. There’s more flexibility for REALTORS® as they brace, and I do emphasize brace, for 2021. Virtual home tours (or virtual open houses) and virtual staging are two advances I wish our industry had rolled out a few years ago. The industry, as a whole, wasn’t as proactive as it should have been. I argue, it took a pandemic to force the change.

Virtual home tours are a fantastic way for connecting buyers and sellers in a post-COVID world. With PAR guidelines as they presently exist, it’s extremely difficult to safely conduct and host an open house. More than one agent is required, almost certainly, not to mention the enforcement of PAR COVID forms/questionnaire prior to each and every party entering the premises. Then there’s social distancing, limiting the number of people who enter at one time, disinfecting the home, etc. New information has also been released from the Centers for Disease Control & Prevention (CDC), which suggests there might be an airborne component to transmission beyond a six foot distance. Needless to say, there are obvious challenges when hosting an open house right now.

The majority of homes listed in today’s market, like other products available online, should employ tours for prospective buyers. These home tours need to be dynamic, where users can engage with the property and gain a sense of what the space and rooms feel like. They should get a sense of the floors, ceilings, depth, closet space, foundation, among other things. After viewing the tour, they should almost presume they were physically onsite.

There’s a bright side to these obstacles though. With the onslaught of mobile technology and the strategic advantage of professional photography, virtual open houses are a superb way to capture buyers’ attention and expose sellers’ homes in an increasingly virtual real estate environment. Furthermore, being proactive in this new age of buying and selling is a smart move! Honestly, it’s good practice to have virtual home tours produced ready to go for buyers who either might not be able to access a home or might not want to access a home (because of distance or certain precautions being taken).

A second strategy the real estate industry is deploying these days is virtual staging sessions as well as virtual staging tech. These are terrific ways to connect with potential sellers. Homeowners receive guidance on how their homes can make an astounding first impression via virtual sessions, effectively staging them in this seller’s market. Staging strategies are shared through technology (Facetime, Facebook Messenger, Google Duo, etc.), from the property’s exterior (discussing landscaping and curb appeal) to highlighting key spaces within the interior, better equipping sellers for the road ahead. Tips presented by the agent can provide the homeowner with a leg up on the competition. Staging tech software and apps are also on the rise in 2020. Companies like Compass are beginning to use it, allowing consumers to see something other than vacant rooms as they search. By selecting a few key rooms, now agents, through the use of virtual staging software, have the ability to otherwise showcase those empty, boring rooms, creating a totally different experience for buyers.

Though virtual components of real estate are extremely auspicious now, nothing can replace the sensory experience of a buyer – nothing. The texture of surfaces or the smells of the home or the make-up of the neighborhood cannot be reproduced on video. Ultimately, while we seek to utilize this technology in our market, physically bringing buyers into a property is the ideal – at the very least before an offer is submitted to the selling Brokerage.