The Process of Buying Our Home During COVID-19
Buying your first home was already hard enough... Then Covid happened.
6 months ago exactly to the day (6/29/20), Nick and I made settlement on our very first home together. Little did we know we would be signing these documents in our car, with masks, passing documents back and forth while the lawyer walked in and out of the building to verify the paperwork.
Growing up, I was always taught a savings account was to never be touched unless it was for something big or important. I always knew I wanted a savings account to someday be able to put a downpayment on a house and to have enough to pay off my student loans. Once I first started college (Over 7 years ago), was when I knew this is what my savings account would someday be for. Over the last 7 years, I have been saving for the house that I would someday buy.
When We Decided We Were Ready To Buy
Nick and I really got serious about looking at homes in February of this year (2020). We were already engaged for about 6 months, and knew the renting life just wasn't for us anymore. We wanted a home to call ours after we would officially be married and that would could grow into and eventually start our family. We also knew mortgage payments were less than what we were paying for rent, and we wanted something we could invest in.
Our Must Haves List
- 4 bedrooms
- 1+ bath
- Preferably single family (open to semi-detached)
- Not on a main road
- Driveway/off street parking
- Outdoor space/outdoor space to create
- Dedicated laundry space
- A bathtub
- No oil heating
How Covid Affected Our Real Estate Search
Covid wasn't yet a thing in the US, so life here was still extremely normal when we first began the house hunting process. With Covid slowly on the rise, homes began selling within the 24-48 hour mark. I believe we viewed around 6-12 houses before real estate in Pennsylvania was not deemed an essential business and had to be shut down.
It was Friday, March 20th, when all businesses that were non-essential to had to officially to shut that evening. We had just seen our last home that day that we had put our very first offer on. Our realtor pushed for our offer to go through that evening before the real estate market shut down. Unfortunately we were notified the same evening that we didn't get the house.
I was extremely confused, devastated and down. I thought we had found our dream home, and knew we were no longer able to look at any more houses until businesses were able to re-open. I had no idea when that would be and we were in such a time crunch to get our of our apartment by 6/30/20.
In Pennsylvania, real estate is not considered an essential business, which means we were no longer able to meet our agent in person and we were no longer allowed to step inside any homes.
Weeks and weeks kept passing by as we would continue to see homes being listed online. We were very unsure how business was still legally resuming and how new houses being listed on the market were selling now the same day. We eventually had learned buyers were so ambitious, and buying homes based on virtual tours alone.
I eventually came across a beautiful foreclosure on Zillow, and sent it over to our realtor right away. He very quickly arranged us a virtual tour of the flipped property, and we fell in love, and made an offer the same day.
Something amazing that happened with Covid was that mortgage rates dropped to an all time low rate, which is partially why the market was so sought after. We were able to score a 3.25% interest rate, which we were quite happy with.
It was extremely scary, putting an offer on a house site unseen. We hadn't seen inside the closets, or the basement, but were confident enough in the upgrades of the flip that the property was solid. Luckily, our agent was able to find us an inspector who was still working, that we were able to see the property with at inspection only. If we changed our minds about the home, then we were only out the money put down for inspection.
Buying Our House During Covid
Steady employment was the main factor that lenders were looking at when giving you a loan for a home during this time period. Lenders were extremely picky about what jobs were considered secure, and checked every single bank statement every 2 weeks.
Unfortunately with how I work, the lenders didn't consider my job and hours steady, and almost wouldn't put my name on the house. This part of the process was hell.
Nick has a normal steady job, and the lenders only talked to him once and done for financials. However, I on the other hand, received a call almost every 2 days saying they needed more bank info, or that I need proof of financial stability, or that I needed notes from people I work with as proof.
At one point, our mortgage company called our lender and told them to stop harassing me, it was that bad. I was at the point where I couldn't hold my tears back anymore because of the harassment I was receiving almost everyday. Unfortunately, if I wanted the house I had to do what they said.
This wasn't the only thing that had happened. Unfortunately our originally settlement date of 6/19 had been pushed back twice, and was cutting it extremely close to 6/30 Our final settlement date had become 6/29. At this point we were a bit stressed.
We had already told our landlord we were moving out by 6/30, and our entire life had been boxed up for weeks. We were literally digging through boxes everyday for essential things we needed. I couldn't imagine if things fell through and we would have to unpack everything and wait even longer, or potentially be "homeless".
To top it all off, a few days before we were about to close we were notified that our loan fell through on the house. Since the house was a foreclosure, and we were originally going with an FHA loan, the sellers let us know last minute that it wasn't allowed to be bid on for at least 90 days, and we were in the 60 day mark, even though we had approval this entire time. So they basically changed their minds, which we were not even sure how this was allowed due to the fact we had contracts signed and everything.
This meant that we had 2 options. We could apply for new loan as conventional and pass up more money that allowed us to bid early, or we could wait 30 more days until the house came on the market and try to put in an offer and start the entire process all over again. We knew the second option was not even a consideration at this point. We were officially stressed to the max, and I had cried my eyes out for days.
Our mortgage company and realtor were so apologetic, they worked on our case for 24-48 hours straight to try to approve us for a conventional loan, and even took a loss on some of their own money to help make it up.
A few days later we re-signed all contracts and documents, and were ready to wait for closing day. It was a long few days before 6/29 came. We kept wondering "what else will happen"? Luckily, 6/29 came, and it was officially time to close.
Closing Day
Pros Of Buying During Covid
- Rates are at a record low
- Lower home prices
- Knowledge of ever changing market through a realtor
- Increase of your house price in the future
Cons Of Buying During Covid
- More buyer competition with lower prices and less homes on market
- Uncertainty of unemployment
- Buying a home sight without seeing it
- Delay in processes
- Housing market uncertainty
