Coronavirus Pandemic: Should You Still Buy or Sell a Home in 2020?

The coronavirus has homeowners pondering whether they should sell their homes.

If you were considering buying or selling a home in 2020, the
emergence of a
coronavirus pandemic
in the United States likely has you
wondering if that is the right decision amid some financial
uncertainty.

Money expert Clark Howard does not want you to panic. Instead,
he wants you to calmly and rationally take inventory of your
personal situation before deciding whether or not to proceed with a
real estate transaction.

That means evaluating things like your employment situation and
long-term goals for the property in question.

Here are some things Team Clark wants you to think about if
you’re considering buying or selling a home during the 2020
coronavirus pandemic.

Buying a Home in 2020: 3 Things to Consider
1. How Secure Is Your Employment Situation?

Clark wants you to take a long look at the stability of your
employment situation before going through with a real estate
purchase.

Are you in an industry that could see near-term ramifications
from the social distancing practices being implemented as a means
of combating the coronavirus? Will consumer behavior during
recession-like conditions impact the profitability of your
employer?

If there is any doubt in your mind about the answers to those
tough questions, you may want to consider putting your plans to
purchase a home on hold.

2. How Long Do You Plan to Own the Property?

Clark believes this is an important part of the decision to buy
in 2020. If this is a home you’re planning to stay in for the
duration of your loan term, then these are actually favorable
buying conditions in terms of available interest rates.

However, you may want to consider holding off on making such a
significant financial commitment if you’re less certain of your
long-term plans or think you might be moving again within the next
few years.

“If you are planning to own the property for a number of
years, then today’s conditions are fine as long as your
employment situation is stable,” Clark said.

3. Will the Required Down Payment Impact Your Ability to
Weather a Potential Recession?

One of the things required for most home purchases is a
significant lump sum to cover the down payment and closing costs on
a home loan.

If you do not have your personal finances prepared for what
could be recession conditions, you may want to consider keeping
that money liquid instead if you still have a stable place to
live.

Before going through with the purchase of a home, you may want
to do the math on how many months of living expenses you have in
reserve and how losing that money to a down payment might impact
your ability to pay for things moving forward.

Selling a Home in 2020: 3 Things to Consider
1. The Transaction Risk Lies With the Buyer, Not the
Seller

Clark believes the risk in real estate transactions for the
duration of the coronavirus pandemic lies with the buyer, not the
seller. So if you’re looking to sell,  he recommends gauging the
market.

“If buyers go on a buyers strike over these next several
months, then you just know that you haven’t sold your house. But
you have no idea if anyone is going to be interested in buying if
you don’t put it on the market,” Clark said.

In the coming months, there will be plenty of national
discussion about the viability of selling a home. However, real
estate markets behave differently in various geographic locations
— sometimes even from neighborhood to neighborhood. That means
the only real way to know is to put your house on the market and
see what happens.

You may not get the offers you were hoping to receive from a
stronger economy, but there’s nothing stopping you from declining
those offers and waiting for a better one to come along.

2. What Is the Contract Length With Your Realtor Going To
Be?

In good market conditions, realtors may ask you to sign a six or
12-month listing agreement for their services as your listing
agent. When homes are selling quickly, that’s usually not a
problem.

But if the market is moving slowly, you do risk the possibility
of your listing becoming stale in the marketplace. Potential buyers
often become concerned when a home has been on the market for long
periods of time without an offer or purchase. That can ultimately
impact the money you make on your home sale.

In these uncertain financial times, it might be wise to seek a
shorter term contract with your realtor. Clark suggests seeking
90-day listings only. That way, you can take it off the market for
a cooling period if it does not sell right away.

Remember, many of these contract terms are negotiable. Don’t
let a realtor force you into a selling agreement that makes you
uncomfortable.

3. Do You Have a Place to Live Lined Up if Your Home
Sells?

This seems like a no-brainer type of question, but it’s really
worth examining. You should be asking yourself “then what?” as
a hypothetical if you put your home on the market. If you don’t
already have a new place to live lined up, you’ll be entering the
market as either a renter or a buyer with a strict timeline.

That means you’ll need to be asking yourself some of the same
questions we posed earlier in the article: How secure is your job?
How long will you be living in your new home? Do you have enough
money in reserve to weather bad economic conditions?

Final Thoughts

With fears about health and financial well-being at the
forefront for most Americans, these are understandably emotional
times. While it may be difficult, try to take heightened emotions
out of your decision-making process and instead use the facts in
front of you to make a financially prudent housing decision.

Yes, a long-term economic downturn is a possibility. Yes, a
quicker-than-anticipated economic recovery is also a possibility.
No, you likely won’t get the benefit of knowing which happens
before you make this life-altering decision.

Recession or not, everyone still needs a cost-effective place to
live. Rely on answering some of the important questions above to
decide if your individual financial situation warrants making
changes to those arrangements in 2020.

More Coronavirus Advice From Clark.com

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Coronavirus Pandemic: Should You Still Buy or Sell a Home in
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Source: FS – All – Real Estate News 1
Coronavirus Pandemic: Should You Still Buy or Sell a Home in 2020?