VIDEO TRANSCRIPT: How To Get The Best Deal When Buying A Home During COVID-19
Finding The Right Home
Hi. My name’s Tyler Ford, EXP Realty, Tucson, Arizona, and I’m going to do a little video on buying a home during COVID-19.
And over the last 10 years, we’ve been on this huge run and it’s been a seller’s market, but due to COVID-19, as we’ve been in lockdown mode, there is things that buyers can take advantage of being more in a buyer’s market. And when we come out of this, just because we’ve got low inventory, could get a little crazy depending on the inventory, and go back to sellers being in the driver’s seat.
But right now, in my opinion, buyers are in the driver’s seat, so just wanted to do a little video on, as a buyer, if you’re looking to buy in this market, how to take advantage of some things.
First thing is finding the right home, and open houses have been canceled, so right now during COVID-19, there’s no open houses. So, your initial search is going to be online, and a lot of agents are doing a really good job doing virtual-type listings where they’ve got videos, floor plans, really good photos.
Your initial search is going to be online, and as a result, though, of this, inventory levels are still super, super low because sellers have not put their homes on the market during this… going into spring, which is usually our buying and selling season. So, we’re still at relatively low levels. In a sense, it’s still a seller’s market, but things are softening up a bit, and buyers are getting things that they weren’t getting prior to this.
A really good place to go search online is if you go to Tucson Homes and Lots, and then if you click on this link right here, click here, it will take you over to my IDX, which stands for Internet Data Exchange. It’s basically a site that you can search for all Tucson homes in the multiple listings service, and there’s a lot of cool features on that. So, just go to Tucson Homes and Lots, and then click there, it’s going to take you over to my site that allows you to search online.
Great place to start is online, and if you see something you like, just reach out, and we can schedule a showing. So, if it’s vacant, pretty easy to go show, but in this market that we’re in, if it’s an occupied one, typically you want to schedule the showing and keep social distancing in mind, and sellers usually are going to leave the home.
So, finding the right home and then getting it scheduled. And then, making the offer. So, the offer price; one thing that you want to look at, some homes are selling super fast because we’ve got low inventory, if they’re priced right, and the listing agent is doing a good job. Homes are still moving in this market. But you want to look at how long it’s been on the market. The longer it’s been on the market, the more likely you are to get a better price, and go into the initial offer with a reduced price from the list price, and more likely to get a better deal based on what we call Days On Market.
Making The Offer
And writing up the offer, one of the things that I’m suggesting all buyers, and even as a seller, I’ve been on both sides lately, but we’ve given seller concessions on the list side. So, as a buyer, what that means is you can get typically up to three percent… you can negotiate it anywhere from two to three percent of the sales price towards your closing costs.
So, you could theoretically get into a home for little or no money other than the down payment. So, all the fees that are associated with the loan, title and escrow, appraisal, things like that, could be covered through seller concessions. And in this market that we’re in right now, I would recommend when you write the offer, definitely writing it with seller concessions, so you could theoretically get into the home with the down payment amount.
And then, on the inspection period, you might… typically in the sales contract, it’s got 10 days. You might want to ask for anywhere from 12 to 15, depending on contractors and being able to get things done, whether people are… For the most part, a lot of the contractors are working, but you might want to buy a few extra days, just so you’re not stressed out during the inspection period.
BINSR - Asking For Repairs
And this next step in the process, and we’ll have a link on this blog post that we’re going to be doing for this video, is the BINSR repairs. BINSR stands for Buyer, Inspection, Notice, Seller Response, and it’s basically once you write an offer, do the inspection, then you’re going to send the BINSR over to the seller either canceling the contract and/or asking for repairs.
So, in the market that we’re in, sellers are much more likely to get to do more repairs. You can get more done when it comes to negotiating that BINSR. So, you want to ask for repairs, certainly ask for the important things. And in a seller’s market, you’re not as likely to get as many things done, but in this market, sellers are much more willing, because they want to get the homes sold because of the uncertainty of what’s going on, to do the repairs. Otherwise, if they don’t agree to do the repairs, then you can cancel the contract.
It’s kind of a one bite of the apple. It’s not a negotiation process. You send it over and the seller says yes or no, and if they change any of that, then you have the ability to cancel the contract. So, really good time right now to get a lot of things done.
Learn More About The BINSR Process: CLICK HERE
Take Advantage Of Low Interest Rates
And then lastly, as a buyer, rates are as low as they’ve been as a result. The feds have lowered rates, so during these times, as a buyer, you could take advantage of these low, low rates. And getting the seller concessions, you can theoretically, like I said, get in for the down payment, you’re going to get a low rate, and one thing that I would definitely look at when you talk to your lender is consider a 15-year fixed mortgage. The amount of money that you’re going to save compared to a 30 is huge.
Have them run a side-by-side comparison of a 15 compared to a 30, and typically, it’s a couple hundred dollars extra per month, but if you look at what we call an amortization schedule, the amount of money that you’re going to save between a 30 and a 50, it’s mind-boggling in terms of the amount of interest that you would save. So, I would encourage you to try to find a home that’s affordable to where you can actually get a 15-year mortgage.
Hopefully this helps in terms of if you’re looking to buy during this time, there are some great opportunities that we didn’t have prior to COVID-19, and take advantage of the low rates, ask for seller concessions, and negotiate the heck out of the BINSR. Hopefully that helps.
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