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Buying or Selling a Home During a Pandemic

Have you thought about buying or selling your home in 2020?  

The real estate industry came to a stand still in March due to the COVID-19 pandemic, and now is slowly recovering in parts of the United States . It is possible to buy or sell a home in the current market, but the process might look different as well as pose new guidelines and challenges. 

While no one knows what the “new normal” will look like, here are some things you may encounter when buying or selling a home.

Stricter credit requirements


According to the Mortgage Bankers Association, the availability of mortgage dropped 16% in March 2020; it's lower level since June 2015. This drop means many lenders have more stringent criteria for mortgage applicants due to COVID-19. For potential borrowers with smaller down payment funds and lower credit scores, it may be more difficult to qualify for a mortgage. While this doesn’t mean qualification is out of the question, you may have to shop around a little more. 

Open House safety protocols


Since the pandemic, buyers and sellers have tried out virtual tours which allows people to view a home online from the comfort of their home. This has resulted in an increase of buyers making offers without physically setting foot in the house.

Yet Showing Time through Midwest Real Estate Data MRED showed the following statistics: August 19, 2019 +17.3% from the year prior and 2020 +56.3% over 2019; September 10, 2019 +13.0% from the year prior and 2020 + 27.9% over 2019 and as of October 11, 2020, 2019% average was +0.1% from the year prior and 2020 is +25.8% over 2019.

Per Illinois REALTORS®, it is legal to hold open houses (as of May 29, 2020) as long as extra safety precautions are taken. Some of these measures include limiting occupancy to ten people or less, practicing physical distancing, wearing protective face coverings and gloves and frequent cleaning and disinfecting of surfaces. Sellers may take precautions such as opening all interior doors so potential buyers can look inside rooms and closets. Buyers tend not to touch surfaces during in-home showings. 

Prior to a physical showing, the buyer, seller, and real estate agent should decide on how and when the property will be shown based on Center for Disease Control (CDC) recommendations. 

Drive-by appraisals


A home appraisal is normally required for mortgage approval. However, nothing is normal in a post-COVID world including real estate. Some lenders are allowing desktop or drive-by appraisals so the appraiser doesn’t have to enter the home. To estimate the value of a home, the appraiser uses photos of the interior and exterior as well as market research data. 

Unaccompanied home inspections


Usually the buyer and real estate attend the inspection so they can ask questions about any issues and potential solutions immediately. Inspectors now are able to assess the home on their own and share their report, along with photos and video, with the clients. 

This is not an ideal situation as underlying issues can get lost in translation. If you’re a potential buyer, carefully review the report and ask questions about anything you don’t understand or seems unclear. For sellers, verify that your inspector is taking the necessary precautions to prevent the spread of COVID-19. The American Society of Home Inspectors recommends that inspectors wear disposable shoe coverings and use hand sanitizer before entering homes, wash their hands after inspecting kitchen and bathroom(s), and sanitizing surfaces after inspection. 

COVID clauses


There are usually penalties for not meeting deadlines or for backing out or a purchase as outlined in a home purchase agreement. According to the National Association of Realtors, real estate agreements include clauses to protect buyers and sellers if they have to delay or cancel an offer due to COVID-19 circumstances. These clauses may include, but are not limited to, government-mandated closures and availability of inspectors or appraisers. 

Physically distanced closings


Prior to COVID-19, your real estate agent would attend the closing with you. Now only the essential parties are at closings - usually the buyer, seller, and title company representative - and documents are passed across a six-foot table. Although there have been closings performed outdoors and through car windows. Many documents also are signed electronically in advance to expedite the process and limit physical contact.  

If you’re looking for expert advice on buying or selling your home during the pandemic, Starved Rock Realty has more than 25 years of real estate experience and can provide you the support you’re looking for. To learn how Starved Rock Realty can help you with your real estate needs, contact one of our agents today or call us at 815-667-9990.
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What Are the Top Questions I Should Ask My Realtor?

When you are ready to make one of the biggest investments in your lifetime: the purchase of a house, you deserve to know whether your real estate agent is an experienced, top-notch pro that will help you land the home of your dreams at a price you can afford. Of course, not all agents are created equal, which is why Starved Rock Realty recommends you interview your agent before hiring them to help you with this important purchase. Below are some questions to ask a realtor you may want to consider. 

How long have you been in realty?


Realty professionals learn the business only through experience, so working with someone who’s been a realtor for at least a few years is essential.

Which neighborhoods do you cover?


Assuming you have an idea of the neighborhoods you’re interested in, you’ll want to find a realtor who is not only familiar with those areas, but can quickly tell you things about the area, like home prices, schools, cultural amenities, and more.

How do you determine what your buyers are looking for in a home?


Good agents provide clients with a list of questions that help narrow down the scope of their home buying search. They should also have a grasp on home prices  to let you know whether you are being realistic about the affordability of various home features or neighborhoods

Tell me about your schedule and availability.


Some agents work part-time or may not be available at certain times of the year, like holidays. Since homes can go so quickly, you want to assure your agent is available when you need them. Some agents work as part of a team rather than independently, so they should introduce you to the other team members and assure you feel comfortable with all involved. They should also inform you how they plan to keep in touch (phone, email, text, text), and how often. 

How many homes have you sold to home buyers this year?


Most real estate agents work both with home buyers and sellers. They often specialize in one or the other. In addition, there’s also an immense difference between working with home buyers and actually selling homes. Be sure to find out how many homes they in fact sold to home buyers as this is a clear measure of their success. 

With 20 years of experience, Starved Rock Realty has the knowledge and experience you’re looking for when you’re buying or selling a home in the area. Don’t just change your address—Change your lifestyle. Learn how Starved Rock Realty can help you find what you’re looking for by exploring our website or calling us today at 815-667-9990.


Sources:
https://www.realtor.com/advice...
https://www.thebalance.com/how...
https://home.howstuffworks.com...


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Year-Over-Year Rental Prices on the Rise

Looking ahead, 2020 is projected to be a strong year for homeownership. According to the Freddie Mac Forecast,

“We expect rates to remain low, falling to a yearly average of 3.8% in 2020.”


If you’re currently renting, 2020 may be a great time to think about making a jump into homeownership while mortgage rates are low. As noted in the National Rent Report,

“the national rent index increased by 1.4 percent year-over-year.”


With average rents on the rise, this year-over-year increase may not sound like much, but it can add up – fast. The math on how much extra it will cost you over time surely doesn’t lie.

Here’s an example: On a $1,500 rental payment, an increase of 1.4% adds an additional $21 dollars per month to your payment. When multiplied by the twelve months in a year, it’s a $252 overall annual increase. The price continues to multiply when you rent year after year, as rental prices rise.


History shows how average rental prices have been increasing each year, and there doesn’t seem to be much end in sight. Here’s a look at how rents have grown since 2012 alone:


Courtesy of Keeping Current Matters

Why not
 lock down your monthly housing expense, and at the same time build additional net worth for you and your family? If you’re thinking about buying a home, consider the financial benefits of what homeownership can do for you, especially while the market conditions are strong and current mortgage rates are low.

Bottom Line

With average rents continuing to rise, now may be a great time to stabilize your monthly payment by becoming a homeowner and locking into a low mortgage rate. Reach out to a local real estate professional to learn how taking advantage of the current market conditions might work for you.

Source:
This blog was originally posted by Keeping Current Matters: https://www.keepingcurrentmatters.com/2019/12/26/year-over-year-rental-prices-on-the-rise/
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