By Cheryl MacCluskey
As I drive through Greenwich on Tuesday’s and Thursdays, it’s great to finally see some Open House signs around town. The phone calls from Brokers saying they are so busy they can’t see straight. When I reflect over the last several months I have been trying to find the silver lining through all of this pandemic that has brought our world to a halt. This morning it finally hit me. Real Estate in Fairfield County has been booming. Although it saddens me that a pandemic has turned the Real Estate Market around, I am happy to see all the Real Estate Brokers busy as bees! It is sad that the list of states requiring quarantine is now up to 31 from last week’s 22, Connecticut is far from that list. Yesterday there were no reported deaths. Good News!
I have been getting calls from brokers and clients on a regular basis about what they can do before looking in the market to ensure that if they find a property they love, make an offer and if it does get into a bidding war, how can they stand out.
Here are a list of things I tell my Brokers on how to prepare their clients to be ready to purchase.
1. Introduce your clients to a Mortgage Specialist sooner than later.
2. Have them acquire a pre-qual letter.
3. At Fairfield County Bank we have created a process to have the client’s credit approved, it is called a commitment to lend. Once the client is approved, they do not have to go through the process again once they find a property.
The other questions I have been getting from First-time buyers or buyers in general is should they be purchasing a home right now. Is it a good time because interest rates are low? Or will the housing market crash, meaning should buyers wait.
I don’t think anyone can predict what the future holds at this moment given what we don’t know about the coronavirus, where you live, and how long the world will be locked down, it is impossible to provide a definitive answer.
Basics, if you find a home that seems right for you and you have job stability and you can get financing at historically low rates, buying a home might be a wise choice and the right thing to do even now.
The same is true for someone who wants to buy an investment property. Ten years ago, the housing crisis gave investors a unique opportunity to scoop up properties at extremely low prices and finance them with historically low interest rates. While we don’t know if property prices will go that low again, many American’s won’t have enough money and will likely walk away from properties.
We are in difficult times in the Real Estate market. For decades, it was understood that you could safely buy a home, sit back and watch how the home’s value go up. In our lifetime, the real estate market has now suffered at least two major shocks. The Great Recession of 2008 and the second one is just beginning.
A couple of tips to think about before buying a property:
1. Determine how long you plan to stay in your new home. If it’s less than five years, look for a property where you can build value.
2. Understand how much you can spend. This isn’t a time to spend beyond your means and hope for the best. It is likely that prices will decline in the short run, so don’t overspend.
3. Find a place that meets your needs. Unless you’re getting a dream price, you may want to spend for the neighborhood and improve the home over time.
4. Find the right neighborhood for you. Look for a good school district, as homes in those neighborhoods tend to hold their value better in a declining market and rise faster in a local market that is strong.
5. Make sure the financing you obtain is on terms that work for you now.
As you make that decision, you have to take a long view of the market. Your plan should be to live in your home for at least five years. Over that time, you’ll have the enjoyment of a home, and in five years the market and this pandemic outlook should be quite different from where we are today. Happy Hunting.
