The COVID-19 pandemic has introduced us to several “new normals.” Kids are learning their school lessons from home, with at least one parent also at home working remotely. Wearing a mask has become a regular part of the daily routine. Stores that once had signs that read “No shoes, no shirt, no service” now have included masks to the list. Social distancing has eliminated large gatherings at church, as well as at arenas and stadiums throughout the country.
Another thing that has transformed into the “new normal” is the home buying process, which includes how the mortgage application process has changed. Let’s look at how the Coronavirus pandemic could forever change home buying.
It Starts with the Mortgage Loan
The first factor to consider for a mortgage loan application is you can expect to do it online. Most banks remain in drive-up only mode, with a few financial institutions allowing walk-up business during restricted times during the workweek. Even when the COVID-19 scare fades from our memories, many banks might continue to use online mortgage applications because digital applications deliver a much more efficient process.
Mortgage loans could forever change because of the negative impact the virus has made on the national economy. Although the unemployment rate has fallen below 10 percent, several industries might not ever recover from the economic carnage. Mortgage lenders have already implemented stricter criteria for approving mortgage loan applications. Lenders not only are looking for the right level of disposable income, but they also want to ensure an applicant works in a relatively COVID-proof industry.
Tougher mortgage loan criteria should be here to stay for quite some time.
Smaller Groups for Home Showings
Many states continue to enforce measures that limit the number of people that congregate in any setting. Some states have made social gatherings of 10 or more people illegal, while other states have increased the number of people allowed to attend a social gathering to a maximum of 25. This means open houses have reverted to the same business model used by stores that must limit capacity to a certain number of shoppers in a store at any one time. Realtors have already established maximum capacities for open houses, and the trend should continue after the virus starts to wane.
The reason for that is home buyers have discovered the convenience of virtual home tours.
Virtual Home Tours are the Future
Touring a home by using a web camera is not the same thing as waking through a home during an open house. You need to engage all five senses to get the real feel of a house. However, the Coronavirus pandemic has made virtual home tours much more than a way to form a preliminary opinion about a property. A growing number of realtors have eliminated open houses and instead, they ask potential buyers to go online to take virtual tours.
Advanced technology has made virtual home tours much more realistic. No, you cannot smell the flowers in the front garden, but you can hear the acoustics in the family entertainment room. Virtual home tours allow home buyers to get a good idea of how they feel about a property. It is kind of like buying a car. You take a test drive after liking everything you see about the car.
A virtual home tour determines whether you want to take a house for a test drive by scheduling an appointment to tour the home.
From Urban to Not So Urban
The strict lockdowns implemented in many of the largest cities in the United States have motivated a rapidly growing number of home buyers to look outside city limits for new homes. Whether this trend continues depends on whether local governments continue to impose strict restrictions on city residents.