Buyers are navigating showings during COVID-19 with the help of protective gear, patience, and flexibility. The process is generally the same once you have identified the home you want unless you are from out of town. Those buyers are not likely making multiple visits here. Finding the home you want is a more thorough process as we carefully select which homes to view. Once you have an accepted offer the process moves forward in a typical fashion other than limiting contact with others. We are following guidelines and those may change here and there along the way. Below is how things have changed thus far.
When a new buyer reaches out to me, the first thing I do is send my buyer survey to gather information about their search. Next, I set up a time for us to meet in person or chat over the phone. I’ll delve into more details of their search. I work with a lot of out of town buyers so the fact that all my consultations are now over the phone is not much different for me. Whether it’s COVID-19 or not, I ask buyers to provide a pre-approval letter from a lender before seeing homes. Being pre-approved and targeting homes based on criteria we’ve discussed means our time will be used wisely. We’ll only see the homes that are the best possibilities, which is exactly what we should be doing now anyway. We are being selective when choosing to go into other peoples homes.
I am asking ALL of my buyers to wear masks, take shoes off or use shoe covers, and touch as little as possible with a wipe in hand. Majority of sellers are requiring these measures. Whether or not they state those requirements explicitly, I am telling my buyers to follow that protocol. Prior to viewing homes, buyers are to review all online materials for a home which could include a home tour video or a Matterport 3D tour, floorplan drawings, photos, and any documents provided in the MLS. By thoroughly reviewing all of this and driving by the home before a showing, if possible, we can avoid unnecessary showings. Many sellers are asking that only the Realtor and parties who will be signing purchase agreement documents enter the home. There also should not be overlapping showings. I’ve found my buyers are being really thoughtful about whether or a not a showing is necessary.
Out Of Town Clients
Many of my buyers moving here from other areas of the country are limiting their travels. They are waiting to travel here until it’s closer to their deadline for securing a home. The timing can be tricky with limited visits and certainly can make the move more stressful when there is pressure to find a home. I have taken a lot of videos of homes and neighborhoods for buyers over the years. I’m no videographer, but it helps narrow down possibilities. I’m also utilizing FaceTime as well as WhatsApp, a free app that allows me to video call buyers similar to FaceTime so they can tour the home along with me in real time. I will not only help you with your home purchase, but I will also connect you with anyone else here to help meet your needs. Whether it’s a list of my preferred service providers, healthcare providers, or a friend who has a kid in the preschool you are interested in, I’m on it!
Inspection and Appraisal
Inspectors and appraisers are taking all the same precautions we are asking buyers to take. It is preferable that only the inspector and buyers attend the inspection. The sellers will be away for this appointment per usual and it is not a good time to invite family and friends to see the home you are purchasing. I know you might be excited to show it to them, but a video call would be best. Buyers don’t attend the appraisal in any circumstance so that has not changed. Lenders are allowing more drive-by appraisals during this time and sometimes they are even waived in certain circumstances.
Final Walk Through & Closing
The final walk through will likely be your third time in the home after the initial visit and inspection. You are not required to attend a walk through or even have one. I recommend doing one to make sure there are no last minute surprises like a burst pipe. I will happily do the walk through while on a video call with you if you prefer. As for closings, you can close inside the title company in a private room that has been disinfected. You can also request to sign from your vehicle. I will not be inside for a closing in order to limit the number of people in a room. I will either be in the parking lot or available by phone should a question arise. Knock on wood, by the time we get to the closing table most questions have been answered and any additional questions can likely be answered by your closing agent. If there is someone in your party who does not want to come to closing, but needs to sign, someone could be given Power of Attorney or documents could be signed then mailed.
In summary, I will work with you in the way that you need me to be in order to feel safe and to minimize your outings. This entire process can be done from home. If that’s the choice that is best for you then by all means I will do what needs to be done to make that happen just short of picking up a home and bringing it to you. Prepare for the process of finding a home to take longer, as there have been fewer listings than usual. We all now know how quickly a country can shut down and if we return to a stay at home status then closings could be delayed. We did see some of that in March and then things got back on track. If there are two thing to be during the time of a pandemic, it’s patient and flexible. I look forward to helping you find a home in a safe and productive way!
If the buyer is obtaining a mortgage to purchase your home then the lender will require that an appraisal be completed. The appraisal is an estimate of a property’s value. This is based on factors such as age, location, square feet, number of bedrooms & bathrooms, amenities, structural condition, and recent sales of similar properties.
Who orders the appraisal?
The buyer’s mortgage lender orders the appraisal and the buyer pays for it. This appraisal will likely be scheduled a few weeks after an offer is accepted.
When does the appraisal occur and how is it scheduled?
The appraiser will schedule the appraisal appointment just like a showing appointment. He/she will be able to access your home as a member of our board and it is normally scheduled during typical weekday business hours.
Do I need to attend the appraisal?
No, you do not need to attend the appraisal. However, you are welcome to be home when the appraiser is there. Make sure any documents I have left at your home for showings are available for the appraiser.
How long does the appraisal take?
Usually about 30 minutes and typically no more than an hour.
How long until we know if the property appraised for the purchase price?
They usually have it completed in 7-10 business days. The lender will forward the appraisal to the buyer which shows whether the property appraised at the purchase price, below the purchase price, or above the purchase price. The seller does not get a copy of the appraisal.
If the property appraised at or above the purchase price, then great. That means the buyer can get the loan amount they have requested. If the property appraised for less than the purchase price, we have a problem. The bank will loan up to the appraised value. In this case, the buyer is not able to finance as much of the purchase as planned and will likely ask the seller to renegotiate the purchase price down to the appraisal price. If a seller says no, then the buyer has to come up with cash at closing for the difference between the appraisal price and the purchase price. Generally, buyers can’t or won’t want to do that. If the buyer walks away, his or her earnest money is usually refunded in the case of a low appraisal. In my experience, it’s not been common to have a low appraisal so fingers, toes, and eyes crossed there are no issues!
What is a highest and best offer?
When a seller receives multiple offers on their property, they typically ask all interested buyers to submit a final offer by a certain time and date. The idea is that this is the highest amount the buyer is willing to pay with the best terms possible. Usually there is no additional negotiation other than perhaps asking the buyer to change a closing date so interested buyers should offer the maximum amount of money they are willing to pay for the property.
How do you put together the highest and best offer?
While you might think the seller just wants the highest price for their property, there are other considerations that factor into which offer is the best for them. Here are some of those considerations and strategies that can help you secure the home you want:
- Have your real estate team on the same page to ensure a smooth transaction. You don’t want to find out that you can’t qualify for the amount of money you’re offering if you go above the list price, so keep your lender in the loop as well as anyone else involved.
- If you need a mortgage, make sure you have an up-to-date pre-approval which should be submitted with your offer. Also, you need to be comfortable with the offer you’re putting in so ask your lender about the payment difference if you are increasing your offer.
- A typical closing timeframe for a loan would be around 45 days and 30 or less for cash purchases. Unless the sellers have a specific closing date in mind, try not to ask for anything out of the ordinary in terms of closing. Make sure your Realtor knows if the seller wants post-closing possession and add that to your offer to make it more attractive.
- Sellers want to work with a buyer who they think will be easy to work with. Talk with your Realtor and come up with reasonable requests. For instance, I don’t suggest asking for a home warranty if you’re in a multiple offer situation or closing costs if you don’t absolutely have to have those. The cleaner the offer, the better.
- Consider making an “As Is” offer. An “As Is” offer means you do an inspection, but won’t ask the sellers to make any repairs. You are agreeing to buy the property as it is. After the inspection you can still choose to walk away if major defects were revealed that were not previously disclosed, but you won’t ask the sellers to fix anything if you choose to move forward with the purchase. This gives the seller peace of mind that the deal will likely close because, often times, if a deal falls apart it’s over inspection items. This isn’t the best choice for all buyers.
- Have your lender call the seller’s Realtor and assure them that you are a strong buyer and won’t have any issues qualifying for the loan.
- Write a seller love letter telling the seller about yourself and why this is the perfect home for you.
- Consider an escalation clause. This is something I go over with all my buyers who are in multiple offer situations and it is often used in our market. I have specific strategies when using this clause.
- Additionally, when I have a cash buyer in a multiple offer situation there are some strategies to help make their offer the most appealing beyond the fact that there will not be a financing contingency.
Why do sellers ask for highest and best offers?
It gives all interested parties an equal opportunity to have their offers considered and it shows how committed a buyer really is. Plus, sellers want the most they can get for their home with the best terms and this gives sellers that opportunity. Some sellers list low with the hope they will get multiple offers so they secure a fairly clean offer that meets their criteria.
I challenge anyone reading this to turn off all unnecessary lights when leaving your home, keep doors/windows well-sealed, turn down your A/C or heat when away, and use LED light bulbs. Some simple steps and habits that can make a difference. If your kids are like mine, then know that I understand how challenging it can be to get them in the habit of just turning off their lights before heading off to school in the morning!
What are some ways you can conserve energy?
- Use power strips for electronic devices. When you aren’t using them, turn off the power strip so they don’t continue to draw energy. Duke estimates you can save up to $24/year by making that simple change.
- Install a programmable thermostat. This way you can set your home to not use so much energy when no one is home or while you sleep at night. Duke estimates this can save up to $162/year. Vectren has a link to a rebate up to $75 for this at: https://vectren.com/savings/in-home/rebates/thermostat.
- Have a regular A/C and furnace inspection by an HVAC professional. Changing your filter and maintaining your units will not only extend the life of your units but Vectren estimates you can save 3-10% on your bill.
- Install LED bulbs. You can save about $80 in energy costs over an LED’s lifetime as they use up to 90% less energy than standard bulbs. They are bright and last up to 15 times longer than standard bulbs. Duke offers discounts on LED lighting at Lowe’s. https://www.duke-energy.com/home/products/discounts-local-retail
- Want to know specifically what you can improve in your home? Visit this site to see if you quality for a free home energy assessment: https://www.duke-energy.com/home/products/home-energy-house-call.
What about rebates?
Duke offers a number of rebates for HVAC, attic insulation, pool pumps, etc… Your contractor might already know about these rebates and can help you with them. For example you can save up to $525 on a qualifying new AC, heat pump, or geothermal heat pump. Be sure to check out what you might qualify for! https://www.duke-energy.com/home/products/smart-saver
Vectren also offers a number of rebates here: https://vectren.com/savings/in-home. Depending on whether your HVAC is electric or gas, for example, would determine which company’s site you look to for possible rebates. For example, they are offering up to a $300 rebate on new gas furnance that meet certain criteria as well as $25 towards furnace tuneups.
Let’s use less energy and save some $$$!