When our partner, Lillian, bought her first home, her employer at the time didn’t have a lot of work coming in the door and she was anticipating being laid off. She knew if that happened, she wouldn’t be able to afford her apartment, so she bought a home that she would be able to afford on unemployment with space for a roommate. She was not laid off, and the lower mortgage over the past 7 years has put her in a much better position now than if she had spent her full house budget.
Each of our buyers is coming from a different place, and the reality is that the pandemic may have impacted your home buying goals. If your circumstances have changed, there can be a lot of questions to wrestle with to help decide whether you need to adjust your budget, timing, or both, as you consider your future home.
Is it okay to buy a house when the economy is down?
Lillian’s grandpa, an excellent manager of their family’s finances, was asked this very question in the wake of the Great Recession. His advice: “You should buy a house when you need a house. Don’t worry too much about the timing.”
When it comes to buying a house, the right timing is more personal than global. Do you have a stable job and a healthy reserve of funds in case your financial situation changes unexpectedly? Are you confident you’ll stay in the home for at least a few years? If so, this could be an excellent time to buy.
Here are some tips to consider as a home buyer. They are always relevant, but especially helpful when the economy is down:
Consider scaling back your budget considerably. There will certainly be trade-offs to your “wish list” when you scale your budget back, but we believe there’s a freedom to reducing your financial stress. We can help you prioritize your goals as you downsize your budget.
Look for a house that could use cosmetic updates that you can complete yourself, such as painting, flooring, and landscaping. Completing these projects will help boost the home value, so you’ll have some extra equity in the home if you need to sell sooner than you expect.
Talk with your agent about your long term goals with the house. We take into consideration both what you need now, as well as what you’ll need in several years. Some buyers hope to sell the home when their needs change, while others may hope to keep the home and rent it out. Others realize that moving is a hassle, and hope they never want to move again!
I am in the middle of my home search and now I can’t see any houses. Do I have to buy a house sight unseen?
The pandemic has pushed many industries to adopt technology in a positive way, and real estate is no exception. Our recommendation is to tour as much as you’re able to online. When you see a house you’re interested in, let your agent know! We’ll work with the listing agent to get extra pictures, videos, and whatever other information may be available before you ever walk into the home.
If you think a house is “the house,” we will talk with you about the risks and benefits of considering an offer sight unseen, and help you decide if it’s the right option for you. In any case, we can always make an offer contingent on an inspection and walk through to validate everything the seller has shown you, to make sure there are no surprises when the house is your own.
I need to move this summer, but there aren’t a lot of options on the market right now. What can I do while I wait for the right house?
Even in a traditional buying process, there is a learning curve as you discover which features and neighborhoods best meet your needs. As realtors, we can help educate you so that you’re ready to move more quickly when the market picks up. Here are a few actions you can take right now to make sure you’re ready when the market opens back up:
Neighborhood walks. If you’re open to moving to a neighborhood you haven’t explored yet, ask us to recommend a walking tour. Just be sure to stay on public property, and follow CDC guidelines for social distancing!
Request video tours of houses you see online. Videos aren’t required, so not all sellers are providing them, however, it doesn’t hurt to ask!
Request market analysis on neighborhoods you’re most interested in so that you are well-informed on market value when you’re ready to buy.
Find a great loan officer who can help you have all of your financial ducks in a row. We are happy to share recommendations here.
Regardless of the circumstances, we are here to make your home buying journey a success! The best place to start is a casual conversation with the Blocks or Lillian to talk about your goals and work on a plan. We are offering free virtual consultations, and are always happy to be a resource for your questions as they come up!