We’re living in uncertain and unpreceded times.
The impact of the C-19 Coronavirus crisis is ricocheting around the globe. Each news cycle brings new information and developments. At the moment, an economic slowdown and job losses look inevitable. However, the housing market is yet to experience the full force of these factors.
Sure, there’s no denying there’s a new level of hesitation in the housing market. And people who are at the beginning of the selling or buying process are most likely to put their plans on hold. At least for the time being.
In reality, some homebuyers and sellers can’t afford to wait. For instance, maybe you’ve found your dream home, or you want to sell your house quickly to move abroad, or you’ve already completed on a property, and it’s too late to default.
Whatever your situation, if you want to go ahead with your transaction, it’s crucial you understand the risks in an ever-changing environment.
What you need to consider if you want to buy or sell your house during COVID-19
How you proceed with your home purchase depends very much on how far along you are in the process. If you’re in the middle, you’re more likely to want to speed things up and exchange as quickly as possible. For example, if you’ve already accepted an offer, or you’ve set a completion date.
To help you navigate these choppy waters, here are five things to consider when moving house during COVID-19.
#1 Limited or no viewings in person
Social isolation means property viewings done in person are going to dwindle or become totally non-existent. But this doesn’t mean you can’t see inside in a property. Thanks to technology, many estate agents offer virtual property tours. And, even before COVID-19 hit our shores, virtual property tours were growing in popularity as not everyone has the time to visit a location in person. For instance, if they live abroad or in another city.
According to a study by the American National Association of Realtors, 45% of buyers reported finding virtual tours useful when house hunting. It’s not surprising as virtual tours offer consumers a unique opportunity to experience a property without stepping foot in it.
#2 Securing a mortgage
Thanks to technological innovations in the finance sector, the process of applying for and securing a mortgage has become simpler. As a result of digitalization like AI and automation, you can now complete a mortgage application online via your smartphone.
What this means in practice is mortgage lenders can make decisions on mortgage applications far faster due to more efficient access to applicants’ financial information.
#3 Conveyancing delays
The more steps or people involved in your house buying process increases the risk of hold-ups. Of course, this is true of any house buying experience, but even more so in the current climate.
Potential delays include the availability of a solicitor to complete deals, registration lags at and difficulties in getting key documents witnessed due to self-isolation as e-signatures are not accepted.
To avoid delays prioritize getting local authority searches completed as quickly as possible.
#4 Risk of transactions not completing on time
It’s important to remember if you’ve already exchanged contracts but not yet completed, you are legally bound to continue. If you or the other party default at this point, you risk incurring financial penalties for breach of contract and even legal action.
One option is to add a force majeure clause into the contract. This will allow you to agree to a postponement of the completion date. But it’s a complex process and involves all parties in the chain to decide together.
#5 Relying on others
Great, you’ve managed to exchange and complete successfully. Before you crack open the champagne to celebrate, remember you still need to control the logistics of physically moving.
Removal companies may struggle to move people as a result of the virus, creating delays along the chain. Rather than moving your belongings, one option is you just take essentials and place the rest of your stuff in storage. This way, everyone can still move but without relying on anyone else.
Try to stay calm. Talk to your estate agent and find out what is happening and what support they can offer. Communicate with your chain. By working together, you have a better chance of agreeing on a way forward or managing delays so that everyone can move quickly and safely.