How the San Diego Home Buying Process is Being Affected by COVID-19
California's governor (Gavin Newsom) implemented a shelter-in-place mandate on March 19th, 2020 that applies to the real estate industry AND to anyone planning to buy a home in San Diego.
If you were planning to buy a home this year, it is now clear that the coronavirus crisis and the shelter-in-place order will have an impact in several ways on your ability to complete a San Diego home purchase.
The first thing you will want to consider is whether or not NOW is even a good time for you to continue your San Diego home search.
Read my 10 Questions Homebuyers Should Ask Themselves During the COVID-19 Crisis, and if you still feel good about moving forward with buying a home in San Diego, the rest of this article will help you start planning for the changes you will experience:
Can I Still Buy a Home in San Diego During the Coronavirus Crisis?
The answer at this time is YES, BUT the San Diego home buying process now has some significant hurdles you'll need to be prepared for.
Here are 5 important aspects of your home purchase that are being affected by the COVID-19 Shelter in Place Order:
#1. Property Tours:
The real estate industry at-first was not considered essential. That was changed about one week into the crisis, and now residential real estate IS considered an essential business by the Federal Government.
The California Association of REALTORS® (C.A.R.) suggests that all real estate agents cease doing face-to-face meetings (including open houses and property inspections) and instead to meet virtually wherever possible.
Some sellers have decided not to list their homes (or to take their homes off the market), so potentially-sick people aren't walking through their home. Others are still marketing their homes, usually with a strict protocol for who can see the home (more hoops to jump through than there used to be).
Some are offering personal video tours to my clients and me until a "real" showing can be scheduled.
There are also health considerations for you to think about. Most people would agree that buying a home becomes less important when it might affect the health of you or a loved-one.
I recommend that homebuyers carefully consider whether or not they want to visit properties in-person as long as the shelter in place order is in effect.
And it's possible that future government orders make it more difficult to tour a home in-person. We will take this one day at a time and one property at a time.
Are you prepared to write an offer on a home without first having a chance to tour the home?
If you are, I can help you write your offer in such a way that your purchase contract protects you (and your deposit funds) if you don't like the home after you get the chance to see inside.
#2. Purchase Contracts
This is an unprecedented time, and it's important that you are taking steps to protect yourself.
The terms of your purchase contract are so important. If your contract isn't written properly, you could be less-protected as a homebuyer, AND you could even potentially lose your deposit funds (possibly tens of thousands of dollars) or be sued by a seller if you are unable to complete your purchase.
The California Association of REALTORS® was quick to develop new documents pertaining to this crisis that you will want to get familiar with if you are going to write an offer on a home in San Diego during the coronavirus crisis.
I recommend you review the new forms/addendums/advisories with me BEFORE you submit an offer on a property.
What happens to your home purchase transaction if further government mandates make it impossible for you to complete professional property inspections, get documents notarized, OR have your transaction officially recorded?
What happens to your transaction if the buyer or seller tests positive for COVID-19?
Can you cancel the transaction and get your initial deposit back?
Your purchase contract should address these questions and more, and I can help you with these considerations when you are ready to submit an offer.
Right now (with the California shelter in place order in full effect), the general property inspectors I have spoken to are only willing to inspect vacant homes (OR occupied homes if the seller or tenant isn't present).
They will NOT ALLOW homebuyers to be present for the inspections.
However, the good ones will issue you a thorough inspection report (including photos of the issues) AND perform a video conference call with you to review all their findings.
Termite inspectors are also currently being allowed to operate, and I've also checked with a drain line camera inspector, foundation contractor, electricians, flooring contractors, plumbers, fireplace inspectors, rodent inspectors, painters, etc. They are all considered essential businesses, and many of them are still working.
You never know what you're going to learn when you're doing property inspections (if you are using good inspectors), and there are many situations where my clients will want to hire specialized inspectors for follow-up inspections.
I haven't called every different type of inspector out there (but I've talked to many), and it's possible that inspectors become less willing to do inspections IF government orders become more restrictive.
You are allowed to buy a home without doing property inspections, but I highly discourage that (don't do it)!
If you are prohibited from completing your property inspections/investigation, I think it's best if your purchase contract allows you to extend your inspection contingency and your closing deadlines OR allows you to cancel the transaction without losing your deposit funds.
Sellers don't have to agree to those terms (but you don't have to go under contract with a seller if you're not happy with the terms).
#4. Lenders
Many lenders are actually overwhelmed right now with the number of homeowners attempting to refinance their mortgages (due to historically low interest rates back in February and March).
Your lender may be unable to meet your loan or appraisal contingency deadlines OR your closing deadline.
Your lender may have difficulty getting an appraisal completed due to the shelter-in-place mandate.
Your rate lock might expire before you're able to complete the closing.
Every lender is different, but so far transactions are chugging along.
It's a good idea to ONLY work with a lender you know you can trust AND to stay in close contact with your lender throughout your entire purchase process (before and after you write an offer).
#5. Closings
Currently, closings are taking place across San Diego County without major issues (so long as both buyer and seller want to complete the transaction).
Notaries are still doing appointments. And it may be possible to work with an electronic (remote) notary, depending on your lender's requirements.
The County Recorder is still recording closings (although they are no longer open for in-person business... they are only doing mail-in and electronic recordings).
(It's possible that future government orders could change some or all of that.)
There is no guarantee that, if you enter into a purchase contract today, you'll be able to complete the purchase a couple weeks (or a month) from now.
As long as the terms of your purchase contract protect you - the homebuyer - from all these possible negative scenarios, I think it's totally possible for you to write an offer AND buy a home in San Diego despite the current shelter in place order...
...Perhaps there will be a few more "hiccups" than typical, but if you and the seller are both reasonable and flexible, it's possible.
Also Read: 10 Questions Homebuyers Should Ask Themselves During the COVID-19 Crisis
Also Read: About Justin Gramm & Globella Buyers Realty
Also Read: 5 Reasons to Hire an Exclusive Buyer's Agent
Also Read: What's Included in Globella's Free Buyer Strategy Session?
Also Read: What is an Exclusive Buyer's Agent (EBA)?
