1.What is happening with the residential real estate market in Massachusetts?
We will start to see how this crisis is playing out in the late April numbers. The market in Massachusetts for the past two years has been one of high demand and low inventory. If this continues expect to see multi-offer situations on desirable properties. Buyers should be working on improving credit, saving money and being prepared to make offers on properties potentially without spending much or any time in the property. Sellers should be prepared for more negotiations on inspection concerns and to potentially offer to cover the cost of a one-year warranty on the property.
2. What are real estate agents doing to manage pending deals? Closing delays?
- Drive-through closings to minimize contact.
- Both buyers and sellers should expect closing delays - Covid-19 addendums are being added to new offers to anticipate the need for potential closing date extensions for various reasons.
3. What is happening with financing for new purchases?
- For FHA/VA, requirements vary according to the lender and are not universal but in general standards are being tightened across the board. Rule of thumb is a credit score minimum of 680 but some, like Chase have already increased the minimum to 700. Most lenders are requiring a verbal confirmation of employment 3 days prior to closing and may expect buyers to bring more cash to the deal.
4. Should I refinance?
Speak with a lender to see if it makes sense for you to refinance your property. Rates have been on a roller-coaster ride as of late. The general guidance for refinancing is that refinancing can be worth it if there's a difference of at least one percentage point between your current mortgage rate and the new rate you can get.
5. My job is secure and I need to buy a home in the next three months, what can I expect the process to be like?
- You will need to have a pre-approval letter to tour a home in person
- Expect to wear protective gear (mask, gloves and booties)
- Limited time in the property and all doors, etc to be opened
- Hands-off policy
- No more than three people in the house and children under 18 are not allowed.
6. I was considering selling my home this Spring, is it better to wait until things have settled down?
As a seller you need to consider the market of the moment. It is best to speak with a qualified real estate agent in your local market to understand inventory and demand in your particular area. If inventory is low and buyers are active looking in your area selling your home now might be easier than you think.
7. Will there be more opportunity in this market for buying investment properties?
In short, yes. With any correction, recession, depression, and natural disaster, there are opportunities. We recommend holding onto your cash for the near future and wait to find the great deals. The great deals of yesterday and not the same great deal of tomorrow. The way in which we are looking at and analyzing deals has changed.
There will be opportunities in the coming months but plan to wait at least until mid-3rd quarter to see an uptick in short-sales and distressed properties coming on the market.
Written by
Kathleen Kelly
The Jarboe Group, Keller Williams Realty
60 Shrewsbury Street, 2nd Floor
Worcester, MA 01604
Cell 508.252.8730