Real estate is relatively not only of the hard-hit industries by the coronavirus pandemic. But it doesn’t mean that South Australians are as active in buying and selling properties as they were before social distancing measures were put in place.
During the “new normal,” listings have dried up. Demand has also dipped due to the disruption in the traditional real estate sale process.
If you plan to shop around for houses for sale, you’ll stand to benefit from the status quo. With no property-purchase restrictions, little competition to drive up asking prices, and forecasts predicting a drop in house values by up to 30%, there’s no better time to be a buyer than now.
However, is it a good idea to buy a property amidst the pandemic? It depends on your situation and decision-making. Use the following tips to avoid regret when purchasing a house in the middle of this health (and economic) crisis:
Check Your Finances
The main reason preventing homebuyers from pulling the trigger on their purchase is money. The uncertainty brought by the COVID-19 outbreak has shattered the confidence of many consumers, which is a valid reaction to this trying time.
Before you entertain the idea of taking out the most significant debt of your life just to own a property, analyze your financial standing first. Make sure that you have substantial cash reserves to afford a deposit and that you have a stable job and income.
It is hard to see yourself (financially) in the future when the pandemic has no end in sight. That is why it is imperative to think with foresight and calculate the risks before making a significant decision that could backfire on you big time.
Like other enterprises, financial institutions are hungry for business to bounce back from the effects of COVID-19. However, most lenders are understandably more cautious these days because of the prospect of high employment, not just in the state but also in the entire country.
If you belong to a high-risk industry like hospitality or retail, expect stricter guidelines for a mortgage application. Don’t make an offer to willing sellers unless you get pre-approved first to understand how much exactly you can afford.
Beware of Overpayment
House values have not slid yet, so there’s a high chance that the current properties for sale are overpriced. With fewer buyers to compete against, you’ll have more power at the negotiable table.
However, you should not let your guard down. You should still exercise due diligence to distinguish a real bargain from an overvalued cheap property.
Hire an Agent
Don’t underestimate the value of using a buyer’s agent. Have a professional who will put your best interests above anything else, so you can find the best deals, find attractive properties you otherwise can’t and leverage your advantages as a buyer.
In any crisis, there are always winners and losers. The confusion brought by such an unprecedented economic event could blur the line separating the two groups. If you play your cards right, you’ll emerge victorious after the pandemic is over.