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A residential street outside of Detroit. Michelle Gerard

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What Detroit homebuyers need to know during the coronavirus pandemic

Crucial intel on what it’s like to buy a home right now

The novel coronavirus has mostly put life on hold. In Michigan, a stay-at-home order has forced people to remain in their homes and temporarily closed all nonessential businesses.

That’s also true of the housing market. While it’s still possible to buy or sell a home, the COVID-19 outbreak has made it considerably harder. Fewer homes are hitting the market and not all of the services in the homebuying process are considered essential.

But sometimes, life can’t wait. Even now, people may need to move or have reasons to buy a home. While it is more challenging, safely buying is still doable.

We turned to industry professionals for answers on the most pressing questions surrounding the homebuying process. From how homes are shown to what closing looks like, here’s what you need to know about buying a home during the coronavirus pandemic.


How has the housing market changed since the pandemic began?

In some ways there’s been a huge shift in the Detroit market. In other ways, it’s barely noticeable.

From an inventory perspective, it’s as if the housing market is on pause. Few new homes are being listed for sale and the challenges of buying right now (more on that later) have meant that almost no homes have sold that didn’t have a purchase agreement in place prior to the start of the pandemic.

“Since this started, our office has gotten only a handful of phone calls from people interested in listing something,” says Ryan Cooley, owner of O’Connor Real Estate. “In general, I’m advising sellers to wait until the restrictions are lifted and then we’ll get a better idea of the market conditions.”

But because there’s been so little activity, property values haven’t shifted in a noticeable way. Once the market begins operating with some semblance of normalcy, that’s when you might see housing values drop as buyers and sellers try to negotiate new market realities.

“The trickiest thing we’re going to have to deal with when all of this is over is that sellers are going to feel like the market shouldn’t come down, but buyers are going to feel like everyone should be wildly discounting price,” Cooley says.


Are there deals to be had right now? Can buyers make aggressive offers?

It depends on the seller. Most, especially those that aren’t in need of immediate funds, are taking a wait-and-see approach. As we said, the housing market will probably dip post-pandemic, but it’s hard to say by how much and for how long.

But there may be a few sellers willing to budge.

“If a property has been on the market a lot longer and if it’s vacant, a seller might be a little more flexible with the asking price to get a deal done,” says Matt O’Laughlin, partner at Alexander Real Estate Detroit. “For example, some have been willing to pay the first six months of an HOA fee for anyone with a purchase agreement between now and April 30. Developers are getting creative with incentives to get buyers over the edge.”


Can people still get mortgages?

Yes, but with caveats. Mortgage rates fluctuated quite a bit in recent weeks. The Federal Reserve lowered short-term rates, but that caused a flood of homeowners looking to refinance and rates rose as a result.

Overall, however, mortgage rates are incredibly low—if you can get one. Lenders, already worried about people unable to pay their mortgages, have tightened their requirements for who qualifies.

“Lenders are sending out affidavits making people prove that their earnings have not been reduced,” says Sabra Sanzotta, co-owner of Berkshire Hathaway HomeServices The Loft Warehouse. “For those who had a reduction in income, lenders are not okay with that—they won’t take the risk of that person not going back to work.”

And because renovations are not deemed essential, banks aren’t issuing construction loans at this time—another deterrent to buying in a city with a large stock of single-family homes in need to upgrades.


How do I see a potential home?

With difficulty. Home showings of any kind—open houses and even private showings—are not allowed under Michigan’s stay-at-home order.

“Agents are not permitted to go to properties,” says Nika Jusufi, founder of Jusufi & Co. “We haven’t seen language that prevents buyers from going to properties, but it’s assumed under the stay-at-home order, and we’re not taking any chances.”

Not seeing a home in-person is certainly a deterrent to buying. “If you can’t show houses, you can’t close deals,” Jusufi says.

In response, realtors are getting creative, offering tours through 3D-photo or video, Facebook Live, Zoom, and other avenues. You might also be able to see a home during the inspection.


Can I get an appraisal or an inspection?

Yes, appraisals and inspections are still deemed essential under the state’s order. But most appraising is being done remotely or by examining just the exterior and a floor plan.

Extra precautions are being taken for inspections, including clearing out and sanitizing the home if it’s occupied. You may be able to tag along to see the home in person, but you also may have to settle for a lengthy Zoom walkthrough.


Is there protection in case I sign a purchase agreement, but then run into financial trouble?

Yes. In most instances, realtors are now including a “COVID-19 clause” as part of a purchase agreement. If the buyer loses their job, for example, the clause provides an extension to the closing date and/or returns the earnest money that was already put down.

“We’ve included that addendum in all of our deals pending,” O’Laughlin says.


How will closing work?

Like everything else in the housing market, parties are getting creative to keep closings functioning. Title companies and notaries are deemed essential, but people are still trying to do things with as little contact as possible.

As such, closings have been moved to remote settings, in highly sanitized offices one party at a time, or even between cars.

“It’s called ‘curbside’ closing,’” O’Laughlin says. “The agent passes the paperwork between the cars, you throw out the pen afterwards, and limit person-to-person contact as much as possible. It’s just a different way of doing business, but making sure we’re still getting stuff done.”


Assuming I am able to buy, can I move my stuff?

Yes. If you personally move your belongings into a single-family home, then it’s almost certainly not going to be a problem. There could be an issue with a condo in a multi-family building and you’ll want to get that sorted out with property management ahead of time.

But movers are by and large still operating. Some might might be taking different measures than others, so sure to check out multiple moving companies to find out their process. Check out our explainer on moving during coronavirus for more information.


What about the future? Should I be worried?

Though they have an interest in the stability in the housing market, realtors have been urging people not to panic. While the coronavirus pandemic is likely to cause some type of economic downturn, traditionally the housing market is not strongly correlated with the economy at large.

“It’s best to look at this as an event and not a permanent state that’s putting an end to all the wonderful healthy dynamics that were in place before,” Sanzotta says. “I don’t think we should be pessimistic about the future.”