Ask Phyllis: a blog series of frequently asked real estate questions. Email us here
Dear Phyllis,
I have been enjoying your column for years. Interesting how much things have changed amid COVID. My partner and I are separating and selling our home. She has moved out, and I will reside here until it sells. I am hoping to buy another home with my share of the profits. My niece is a newly licensed Realtor®, and we will use her to sell, and I will use her to buy as well. I want to start looking at homes so that I can get a feel for what I can afford. As there are no open houses, I am unsure how to proceed. I am hoping you can offer some guidance.
Perplexed
Dear Perplexed,
COVID has been a game changer in real estate, and it is certainly more difficult for a home buyer to research the market amid COVID. I think the key takeaway from 2020 was adaptability. You are correct; open houses are no longer allowed. Showings are limited to one party at a time and are strictly scheduled.
Have your niece provide you with an estimated Seller’s Net Proceeds Sheet. This will outline all the costs associated with selling so that you will know approximately how much profit you will have after your sale.
1) Get prequalified with a local mortgage lender. Ensure that you and the lender are comfortable with the monthly PITI (principal, interest, taxes, and insurance).
2) Have your niece set up a listing search to email you new listings that meet your criteria. This will give you a feel of what’s available. Have her also include sold listings. In today’s market, many listings are selling over the asking price, so it’s important for you to have a clear picture of the values in the neighborhoods in which you are looking.
3) Once you have a prequalification letter, you can view owner-occupied homes. However, as your down payment may be coming from the sale of your home, it may not get you in the door for owner-occupied listings. Sellers and their listing agents are taking extra precautions due to COVID and are hoping to minimize showings rather than maximize them. If you aren’t in a position to buy today, a seller may not want you in their home until you are in a position to close.
Some listing agents are not as rigid when scheduling showings on vacant homes. Chances are your niece can arrange showings on some vacant listings without a prequalification letter. This may allow you to do some research amid COVID.
Best of luck with your sale and purchase.
Related Posts: Home buying advice
Home buying, where to begin
Buying during COVID
