For many Silicon Valley residents, being at home has been a mixed blessing: there’s no nasty commute traffic, there may be more time at home with loved ones, perhaps there’s more time for home based hobbies like cooking. Above all, it’s safer than being out and about!
At the same time, for those holed up in an uncomfortably small apartment and no outside space, the value of a patio or yard, and perhaps an extra bedroom, is more apparent now than ever.
This is even more true because we don’t know if there will, or will not be, multiple “waves”, as there were with the Spanish flu. If that happens with the Covid-19 virus, we’ll have many more weeks at home before this is over. (Please also see Coronavirus impact on real estate sales.) If this goes on, or off and on, for 18 months or more, I would anticipate that many people will be looking for a larger home to purchase or to rent.
Getting into a larger home faster: what you can do now to buy after the Shelter in Place order is lifted
There are several things you can do to speed up the learning curve so that when you are able to see all homes for sale, it can go faster. Something to know is that most buyers do not get 100% of whatever is on their wish list. Most Silicon Valley home buyers get about 80%. If you can prioritize the must have and the want to have list, it will shorten the time for you tremendously. This is often the largest challenge since they tend to want to get the right location, price, size, schools, condition, yard, home orientation (sunny etc.).
(My concern with speed is the unknown. If we are told it’s all clear on June 1, but it’s all reversed on August 15, we may not see the reversal coming. While it was not a shock that we were all asked to stay home, the speed with which it took place got many of us a bit off guard. If you want or need to buy a larger home, I would suggest being ready to move quickly so that the window of opportunity does not shut on you.)
- Start by hiring an excellent buyer’s agent to assist you. He or she can teach you a lot and bring you up to speed on the market conditions, paperwork to see a home in this post-coronavirus climate, pricing, and review the contract paperwork with you.
- Get the strongest pre-approval you can, usually that means a loan which is pre-underwritten (not every lending institution offers this option)
- Study the type of home you want and can afford: review the photos, get a sense of the recent sale prices (your Realtor can help you with that and also tell you if there’s any helpful info in the agent comments section of the MLS that you cannot see). Most home buyers need to see about 10 homes in person (that is a nationwide statistic) before they are ready to write an offer. In our San Jose area, it may be more than that. Seeing 20 would not surprise me. So try to find 10 or more properties that are close to what you want and review them carefully since you may not have the time to later visit 10 or 20 in person before we get a 2nd wave and 2nd quarantine.
- If possible, read and discuss with your Realtor a few disclosure packages of homes similar to the type you want to see. It can be tempting to believe that homes that look great have nothing wrong with them, but most houses have between 1% and 1.5% of the purchase price in needed repairs. Learn what is frequently in need of repairs or upgrade in your likely future home so that you won’t have surprises later. Otherwise, if the first time you see a disclosure package is when you find the home you want to purchase, it may trip you up.
Getting into contract now, during the Shelter in Place
- If a property is vacant, it is possible for you to see it now, though with many restrictions, and in that case, you should also be able to get into contract.
- Some buyers are putting offers in on homes that they cannot yet visit in person since the homes are occupied. I don’t love the idea of these blind offers, but they are written with long escrows and contingency periods so that the buyers can see the home once they are legally allowed to do so. (That contingency is “subject to inspection”.) If you find that perfect larger home, you may not want to wait until the Shelter in Place is lifted before getting into contract.
No one wants to be rushed, and that includes me. If you can get most of your home buying education upfront, during our time of home isolation, you will be able to move quicker if the right house comes up, and you won’t feel as harried and rushed if you have all the major pieces in place and have gotten a good amount of “remote learning” ahead of time. Since we do not know if there will be a 2nd wave and 2nd Shelter in Place order given in the future, I believe it is wise and empowering to be prepared to move fast once the green light is given.