Lessons Learned while Buying and Selling a Home in 2020
What’s the one word I would use to describe my home buying journey in 2020? Insane! My home search began in spring of 2019, when interest rates were slightly above 4%, and you could take ample time to think before deciding to place an offer on a home. However, after months of not finding what we needed, we were really looking forward to spring 2020 when inventory levels would hopefully rise and more homes would be on the market. Due to the unexpected COVID-19 pandemic, this never happened.
Just as the spring 2020 selling season got underway, it came to a near dead stop. Very few new listings came on the market because, understandably, no one wanted strangers touring their homes during a global pandemic. Luckily, a few new listings popped onto the market and my husband and I made plans a few days later to go see them. Since we waited a few days to view one of the homes, another buyer beat us to the punch with an offer. Lesson #1: Be ready to act fast.
We continued to search more new listings, and when we found a home to tour, we made sure to schedule the earliest possible appointment. Out of 16 total appointments available, we landed the fourth slot. We walked into the appointment knowing we would have to be ready to present an offer that same day if we fell in love with the home. The viewing went extremely well, and we decided to place an offer. Shortly after, I received some bad news – the homeowners received two full-price, non-contingent offers, willing to close in 30 days. This was a blow since we had not listed our current home yet, and, like many existing homeowners, I did not want to list my home until I had found a home. Lesson #2: Consider other financing options that will allow you to purchase a new home before selling your current home, so you are not limited to a contingent offer.
Fast forward several months, my husband deemed checking Zillow several times a day his new hobby. Finally, another great listing came on the market, but it was at the top end of our price range. However, since the pandemic environment brought interest rates to new lows, this had an impact on monthly payments, causing them to be lower than normal. Lesson #3: New lower interest rates mean the monthly payments would be less than anticipated. The seller allowed us to tour the home earlier than anyone else and we fell in love with the house. We placed a non-contingent offer shortly after viewing the home and the seller accepted.
The next step was to place our current house on the market, so lesson #4 is making sure your home is ready to list. Thankfully, we had been preparing to list our home while we were house shopping, so our home was already decluttered with major repairs completed, allowing us to list quickly. After four days on the market, we had multiple full-price offers. The closing of our new home and old home were scheduled one week apart, so our carrying costs on our old home were minimal.
A recent article from Norada Real Estate Investments highlights housing data from Realtor.com, confirming that my experience is the new normal when buying and selling a home in 2020. Available home inventory remains at record lows with demand outpacing supply, resulting in a seller’s market. Although home prices may be higher, lower interest rates help offset the difference.
As we enter the fall season, the fate of the housing market is largely tied to the uncertainty of the pandemic and the economic impacts it has on employment and interest rates. Every community is different, and I encourage you to consult a local realtor to understand what the market is like in your area.
If you are trying to buy or sell this fall, I hope you will heed the lessons I learned earlier this year:
- Act quickly when you find a home you like.
- Make sure you are prequalified for multiple scenarios and loan types.
- Don’t be in despair because prices are rising; rather rejoice in lower interest rates.
- If you have a home to sell, start the decluttering and prep work early so you can list your home as quickly as possible.
By: Marlene Sheard
Marlene is a mortgage marketing representative for Ameris Bank and previous sales and marketing president for her local Home Builders Association. She enjoys sharing her experiences for the buying, selling, and financing of homes.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All loans subject to credit approval.
Sources: Norada article link: https://www.noradarealestate.com/blog/housing-market-predictions/