Despite COVID-19, there are people who still need to buy and sell homes for various reasons and we are here to assist them through the process. Our goal is to make it as easy and stress free as possible. Selling your home and/or buying a new home during the Corona virus outbreak is no easy task. Once under contract there are home inspections, repairs, appraisal, final loan approval and signing the docs.
Not too surprising, COVID-19 has thrown a few wrenches into the steps leading up to the closing..but knowledge, as well as planning and preparation are key and we are here to assist clients with navigating the process.
How long will it take to close on a house now? Not surprisingly, home closings are taking longer now. Prior to the Corona Virus Pandemic closings were taking about 30 days. Over the past month we have seen that increase to closer to 45 days. It is critical to be working with a lender who is knowledgeable and when necessary able to think outside the box on ways to keep a deal together and get it closed.
There are many areas in the closing process that have been affected. Underwriting is taking longer, and borrowers should be prepared that they may need to provide additional documentation than pre-COVID-19 days. In addition, social distancing and shelter-in-place orders are delaying and complicating home inspections, appraisals, buyer requested inspection repairs, and walk-throughs. Arizona has added an addendum to the contingency timelines to account for some of these holdups.
Here is a look into the various stages of the homes closing process, how it may be held up and why.
Typically, once you go under contract, the home buyers have 10 days to complete a home inspection, gather repair bids and submit requested repairs to the seller. Completing this process in non Covid days was sometimes difficult. The buyer will want to send a home inspector to the seller's home to vet it for any flaws soon after going under contract. These days, with concerns over COVID-19, home sellers will most likely be required to leave the property during the inspection. Neither the buyer, the buyer's agent, the sellers nor the seller’s agent will be present during the wrap up (the time at the end of the inspection that the inspector reviews their findings). Many inspectors are offering clients the option of doing the wrap up either via videoconferencing or over the phone. Furthermore, while in homes, inspectors are wearing masks and gloves, washing their hands more frequently, and wiping down things they touch with antiseptic cloths.
After the home has been inspected, the buyer typically presents to the seller any repairs they would like the seller to make prior to closing. Although contractors, handymen, HVAC companies, roofing companies, and others who do home repairs are considered
essential in Arizona, scheduling a time for them to come to the home to provide a bid takes time. Now with a shelter-in-place order, finding a time convenient for the seller (since they may need or want to leave while work is being done) can prolong the process. Like inspectors, these individuals are taking additional precautions and wearing masks, using gloves, wash their hands more frequently, as well as wiping down things they touch. Buyers should be prepared that many sellers may elect to provide a credit in lieu of repairs and allow the buyer to make the repairs after closing.
Traditionally, home appraisals—where an appraiser visits the house to assess its value—are required by lenders for any buyer who needs a mortgage. But to keep home sellers safe, the Federal Housing Finance Authority has instructed Fannie Mae and Freddie Mac to temporarily allow exterior-only appraisals or desktop appraisals during the COVID-19 crisis.
These appraisals use public records, multiple listing service (MLS) information, and other data sources to identify details about the property—and don’t require going inside the home. Since appraisers are using pictures on the MLS instead of viewing the home in-person to determine condition and value of the home, it is especially important sellers clean and de-clutter so their home presents well in photos. Furthermore, it is essential listing agents hire professional photographers who understand the science of visual marketing and can capture the home in its best and not try and take the picture themselves.
Social distancing is also affecting buyers' final walk-throughs, with some being done virtually on FaceTime.
Last but not least, social distancing may also delay closings.Title companies throughout the Valley are still having buyers and sellers sign in their offices or are offering to have a remote notary sign individuals in their homes. Scheduling remote signing can take extra time, especially when dealing with out of state clients. Since states around the country are handling the shelter-in-place in various ways, title companies have to abide by those states’ restrictions. Typically, real estate agents attend the signing with their clients which is no longer the case. When meeting at the title company to sign, only those signing are to attend closing.
Just keep in mind that most of the delays in selling and/or buying a home during the COVID-19 outbreak are beyond anyone’s control—and are a good thing in that they're meant to protect home sellers, buyers and others involved in the processes from unnecessary exposure to risks that might come from normal in-person meetings.
As a team we have closed several homes both representing buyers and sellers during this pandemic and understand the challenges. We are here to help navigate buyers and sellers through the processes and make it as easy and stress free as possible. If you have questions about buying or selling, please contact the Reagen Johnson Group at 602.362.5484.