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Summary: As the states begin to open their economies in the face of COVID-19, home buyers can plan their next purchase. Shopping online for the optimal selection; evaluating affordability; getting a mortgage pre-approval; and drafting a personal appeal to sellers are all desirable during this slow recovery.
Across the United States, jurisdictions continue to slowly loosen restrictions imposed to slow the spread of COVID-19. Looks can be deceiving, however. Although the curve is flattened in terms of the number of cases versus health care capacity, this coronavirus is still highly contagious according to public health experts. The challenge now is to conduct commerce while a workable vaccine is pending. In many cases, technology assists businesses in transacting without interruption. Other enterprises that depend on physical presence must be more creative in bringing their operations back to normal. Those planning their next home purchase need both automation and ingenuity.
The Safe Start plan is a phased approach overseen by the state government whereby counties permit operation of, and access to, a variety of public institutions and private facilities. Phase 1 looks very much like the original stay-at-home orders, exempting essential businesses. Presently, several counties are applying for phase 2. While staying at home as much as possible is encouraged, it is no longer required. Gatherings are allowed but limited to five people. More businesses can open under strict conditions: health clubs, hair salons, new construction and restaurants, for example. Real estate operations also receive more liberty under phase 2. If you are looking to buy a home, you may be presented with a rare opportunity to land a great deal.
Phase 1 of Oregon’s re-opening schedule looks much like Washington’s phase 2. Barbershops, retail outlets, gyms, and restaurant dining areas, e.g., are again assuming regular operations. Of course, they must adhere to the standard rules calling for masks, optimal ventilation, and social distancing in most settings in order to remain in compliance. Most of the state, excepting Portland and its surroundings, is currently in this phase. Workers can again occupy their business offices, including those in real estate. Spikes in the virus may slow further re-opening but are unlikely to reverse the allowances that phase 1 grant to Oregonians.
The Gem State is among the furthest along in re-opening with Idaho Rebounds. As of now, Idaho has opened restaurants and bars, outdoor and indoor recreation facilities (including health clubs), personal care establishments such as hair salons and tanning studios and movie theaters, and nightclubs. Employers may now resume unrestricted staffing at offices and industrial buildings. Attendance at large venue events is also permitted under specific rules regarding distancing and crowd management. In addition, visits to nursing homes and assisted living campuses are once again allowed. Some observers see no decline in migration to Idaho from elsewhere, coronavirus, or no coronavirus, so real estate business is bound to be robust.
As with the other states, re-openings in Colorado are subject to public health caveats relating to distancing, masks, and keeping the most vulnerable isolated from possible contagion. Presently, at the second level of the Safer at Home program, there is public dining at 50 percent capacity as well as the operation of children’s summer day camps. Although residents are encouraged to remain at home, non-essential businesses can now function out of their own physical places. Outdoor recreation is open, and real estate showings or meetings can proceed, albeit limited to 10 attendees. Realtors should provide masks, maintain distance and login detail every gathering.
Knowing conditions on the ground is important for home buyers in the age of COVID-19. The good news for those just starting the process, nevertheless, is that planning a home purchase can begin in the safety and comfort of their own residences. Computer technology offers listings with an abundance of photographs and video tours. In fact, it is the next best thing to being there. Best of all, it eliminates the drudgery of traveling to the house after house to discover the ideal dwelling. Before you have to think about complying with state regulations regarding showings, you can narrow your selection before leaving home. For example, with Sammamish Mortgage, you can navigate the entire home buying process from your home.
For the most constrained period of the coronavirus pandemic, i.e. roughly March through May, the real estate market belonged to the sellers. One factor credited for this reality is the low inventory of houses for sale. In May of this year, for instance, listings were down nearly 20 percent from May 2019. Yet talk of things loosening up economically was enough to spark bidding wars among buyers throughout the U.S. As sellers again list their homes, the competition remains fierce for the near future until supply catches up with demand. Many contestants can make all-cash offers, putting those seeking financing at a disadvantage.
Yet money is money, be it borrowed or owned. Sellers will respond if and when the price is right. Therefore, to save time and emotional health, buyers do best who can account for their down payment and closing costs before they put in any bids. To do this, they need some idea of their loan amount, and to do that, they need to start with the list price. With that in mind, purchasers can then decide on what kind of loan works best for them. From there, the down payment figure follows as well as an estimate of costs associated with the loan.
Cash deals have sway because of the promise, or well-grounded hope, of a quick sale and settlement. Still, a purchaser making an attractive offer can compete by having a lender pre-qualification, or pre-approval, in hand. This is not a guarantee by any means. Instead, it represents the lender’s confidence in the borrower’s stated information. An approval will follow if and when that information is properly documented and confirmed. Yet the pre-qualification has the power to influence a seller in your direction. It tells the seller that the bank or finance company likes what it sees in the person bidding on the house.
There is one element of pre-approval that gets near-instant verification – the buyer/applicant’s credit scores. High, or at least acceptable, scores assure a lender ahead of loan processing that the applicant pays bills on time and stewards financial resources responsibly. Given the crowded field of buyers in Washington, Oregon, Idaho, and Colorado, each one needs every edge available. Excellent credit serves that purpose, all other criteria being satisfied. It makes the pre-qualification more likely and keeps the interest rate low (very low these days) should the loan be granted. If you have a bad credit score, don’t worry, you can improve it.
As corny and sentimental as it sounds, sometimes an emotional appeal can make the difference with sellers in as tight a market as this COVID-19 economy has yielded. Preparing a “love letter” in advance of negotiations gives a buyer a personality to whom a seller can relate. The Washington Realtors trade association has posted that a bond between the two parties “…frequently arises from shared interests, history, family preferences, etc. of the buyer and seller and may trigger decisions by the seller based on the seller’s unconscious bias.” Having such an intimate appeal in the back pocket can offset any weakness in the offer.
The crux of the love letter centers on what the house would mean to the buyer, the family, and their future. It spares no detail in talking about spouses, children, their love and their struggles. While much of it can be crafted in advance of a home search, the letter should be later tailored to the property of interest. Although it does not make the deal a slam dunk, a love letter strengthens an offer in an intangible way. Moreover, with a little thought, much of it can be produced ahead of time.
Do not wait for the actual offer to arrange for a mortgage loan. Talk to a loan officer promptly about every potential house and what loan fits your position best. Given all the variables, nailing down financing is crucial.
Sammamish Mortgage has been around since 1992 and has helped plenty of people get mortgages. Based in the Pacific Northwest, Sammamish helps clients in Washington, Oregon, Idaho, and Colorado.
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Veterans Affairs guaranteed home mortgages are both a salute to and investment in those who have served the U.S. in the armed services. Recognizing the difficulties many returning military men and women suffer as they resume civilian life, the VA makes these loans and offers forbearance during difficult circumstances like COVID-19.
As economies begin to relax COVID-19 restrictions, the real estate business is also enjoying greater freedom to conduct transactions. With housing supplies low and buyer demand high, home seekers must be diligent and patient to find the right property.