There are two types of people who think of selling their house and buying a new one in 2021. One type would be those who were already on the cusp of the decision when the pandemic happened. The other type would be those who started contemplating the idea because of the pandemic.
The second type of people may now be residing in areas hard hit by Covid-19. If their area has not yet been a hot spot, its general characteristics may make it prone to be one or may make day-to-day living difficult under restrictions. These are typically highly dense urban areas. The pandemic has spurred decisions to look for safer environments and more space.
Whichever group you may belong in, it would be good to assess the situation of the buying and selling markets in the pandemic.
A Good Time to Buy
The pandemic has had a huge impact on the economy, and one of its effects is the unprecedented decrease in mortgage rates. This makes it a good time to purchase a home. Monthly payments are now much lower than before.
The low mortgage rents and monthly payments are not the only things that buyers need to consider, though. Lenders have stricter requirements now, including a high credit score of 700 or more. They also require a 20 percent down payment.
Paying a 20 percent down payment is advantageous to the buyer as well. It removes the need to pay for private mortgage insurance (PMI). It also enables you to build equity and lowers your monthly payments.
Even if you could afford a larger house due to the lower monthly payments, stop to think if you need additional space. If you are buying a bigger house because of a growing family, do so. Do not, however, buy a bigger house just because you can afford it. It would be wiser to buy the actual space you need and save or invest your extra cash.
The real estate market boom has also increased competition among buyers. If you buy lower than your buying threshold, you can still afford to put an offer that is above the list price.
The general notion is that you should not spend more than 30 percent of your gross income on your monthly mortgage. You should consider your actual net income, though. Compute how much you will have left after paying the monthly mortgage. Be aware of your regular expenses and leave room for savings and unexpected costs.
A Good Time to Sell
The low mortgage rates today have also increased the number of people wanting to buy homes. Many listed properties are taken off the market in as early as two weeks or even less. The trend is expected to continue despite the pandemic.
With increased demand comes higher home prices. Prices of homes in 2021 are expected to exceed that in 2020 by seven percent.
These factors make it an opportune time to sell your house as you buy a new one.
Spring is the traditional peak season for selling real estate. The weather makes site visits convenient. Families start looking for houses to be able to move during their children’s summer break. This seasonal trend was defied during the pandemic, though. Sales were seen to continue even through the winter months. You could therefore put your house on the market whenever you are ready.
You need to declutter your home, clean it thoroughly, and do proper home staging. If you show your home in winter and your area experiences heavy snow, it would be best to hire professional snow-plowing services to clear up your frontage and driveway before site visits. This will ensure that the work is done properly. They know the techniques to make certain that snowbanks end up in suitable places.
In the pandemic, it would be safer if you are no longer living in your home when you open it for site visits. You could move to a rented place temporarily if you could not yet move into your new house.
If you still live in the house you are selling, you could arrange to be away when your real estate agent brings prospective buyers. Make sure you disinfect the house afterward.
Some buyers still prefer to do home visits. During Covid-19, however, many buyers request virtual tours instead. Hire a professional to do this to ensure that it presents the property in the best way possible.
Do not be daunted by the process of selling your house and buying a new one during the pandemic. Conditions are in your favor both ways. As both seller and buyer, you end up a winner.