The coronavirus has created economic uncertainty and has many people trying to figure out what to do. If you recently listed your home, you may be wondering whether you should continue trying to sell it or take it off the market for a while.
How the Coronavirus Has Affected Demand
The Federal Reserve recently cut interest rates, and mortgage rates are at record lows. That has caused many people who were already interested in buying homes to hurry to close a deal at a low interest rate. Some real estate agents have also reported that people who weren’t necessarily thinking about buying a home, particularly first-time buyers, have been contacting them to inquire about houses for sale.
The stock market has been experiencing dramatic rises and falls recently. That volatility has made investors nervous. Individuals who don’t feel comfortable investing in the stock market right now may consider real estate a safer bet.
Some people have decided to stay on the sidelines and wait to see how things will work out. For example, prospective buyers may postpone purchases because they have been laid off or furloughed or fear that their jobs are at risk.
How COVID-19 Has Affected the Ability to Close Deals
Real estate agents across the country have changed the way they conduct business to reduce the risk of coronavirus exposure for themselves and their clients. Many are only conducting private in-person showings by appointment or are conducting video tours to avoid face-to-face contact altogether.
Some steps in the process of selling a home are traditionally done in person. For example, an appraiser and a home inspector may need to visit a house and look around to complete their reports. In some cases, documents must be signed in person and notarized. Although many local and state governments have relaxed those restrictions in recent years and allowed documents to be signed electronically, home sales may be delayed in areas where that is not permitted.
Since a large percentage of employees are working from home, ill, or need to care for loved ones, some mortgage lenders are having trouble keeping up with applications. To deal with those issues, some lenders are offering to lock in interest rates longer than usual to help prospective buyers who may encounter delays.
The situation is changing every day. Many buyers and sellers have lost their jobs or seen a substantial reduction in their income and may therefore be unable to complete transactions as planned. In some states, real estate contracts now contain clauses that allow buyers and sellers to back out of a deal if they are impacted by coronavirus.
What Should You Do?
It will take time to see how COVID-19 will affect the economy in the near and long term. The situation varies from place to place and is constantly changing. If your home is currently listed for sale and you have questions or concerns, talk to your real estate agent.