It is a difficult time to sell your home amid the outbreak of the coronavirus pandemic. So consider yourself lucky if you have succeeded in getting a buyer who is ready to purchase your home at your desired price, as the only remaining part is to finalize the agreement.
However, as expected, this global pandemic has also presented some challenges in the home closing process. For this reason, it is important for home sellers to understand the challenges that they are likely to encounter, and how to address them in order to ensure that their deals smoothly proceed to settlement.
The period it takes to close the deal
As expected, it's taking longer to close on a home during this time. According to Tendayi Kapfidze, a senior economist at LendingTree, from the time an offer is accepted, home closings took an average of 26 days in January, but this has sharply increased to 43 and 60 days in February and March. This trend indicates that home closings may continue to take longer in the coming months.
So what is causing these delays? One reason is that because of the historically low mortgage interest rates, lenders are overwhelmed with handling re-fi requests from customers.
Tendayi notes that the majority of lending firms are occupied with re-fis and experiencing months with record closings, which will typically result in closings taking longer.
Moreover, the various measures of curbing the spread of coronavirus, such as social distancing, are slowing down the home closing process. Below are some of the things that slow down the process.
It is a common practice for buyers to have the homes inspected by professional inspectors to ascertain the condition of the property. The inspection process takes a considerable amount of time, especially during this period, when various measures of curbing the spread of coronavirus are being enforced by the governments. This process, however, can be accomplished through "remote home inspection" where a hope inspector conducts the inspection alone and shares the results with both the buyer and the seller through an online platform.
Normally, a buyer obtaining a mortgage is required by their lender to get a professional appraiser to carry out an appraisal to determine the value of the home. To allow the appraisal process to smoothly and safely take place during the COVID-19 crisis, the relevant government agency has instructed the parties involved to allow a desktop appraisal or exterior-only appraisal. However, with this new procedure, the appraisal process may take longer.
As we know, the coronavirus crisis, has resulted in us observing the social distancing guidelines in order to reduce the spread of the pandemic. This has made it difficult for buyers to conduct the final walk-through of the home. Some are not taking place at all, while others are occurring virtually.
Finally, due to the current pandemic, a majority of the title company offices are not operating, and gatherings of more than ten people are not allowed. This has greatly contributed to the delays being experienced today in home closings. To avoid the delays while observing the social distancing directives, closing can be conducted outside in an open place, in separate rooms, or through a remote or electronic notary.
Remote Home Closings
Recently, some states have temporarily allowed home closings to be conducted through video conferencing. The entire nation may soon embrace this method. But remote closings can only take place in certain situations such as when it is allowed by lenders and when it involves cash transactions.
Just remember that home closing delays being experienced during this period of the coronavirus pandemic are beyond the control of any individual, and that the measures of curbing the spread of COVID-19 are not intended to slow down the home closing process but protect the lives of home sellers and buyers.
Despite the changes/adjustments, our industry has done an exceptional job of continuing to fulfill the dream of home ownership. The coronavirus is an obstacle, but we're nimble enough and dedicated to serve our clients that have a need.
Read the full article from Realtor.com Here.