PCSgrades was joined by two military affiliated realtors to help answer questions on navigating the PCS stop movement as it applies to military families buying and selling their homes during the coronavirus pandemic. Many military families are stuck in PCS-limbo and find themselves faced with buying and selling issues as the country waits for the pandemic to end.
Kelly Hasbach– Army spouse and Realtor for military families
Kate Christofides– former Air Force, now Realtor
Your Coronavirus Real Estate Questions Answered by Realtors
If you are scheduled to close on a home in May, should you continue if the Stop Move is extended?
Yes, you should continue with your process. Various states have COVID addendum to protect you as a buyer. If you use the VA Loan, you are protected under the financing contingency of the VA Addendum. This applies if your orders are changed or delayed.
There will be a buying surge in the summer market as many military families try to move at once. Our guess is that there will be a “second Spring” surge. This is a buyer’s market right now while we are in between those waves. This will mean more competition. If you are already under contract and think you will end up at that base, then stay the course and continue forward.
If your interest rate is locked in now, those rates may not be there in another month or two. Talk to your Realtor and lender to discuss those options. When interest rates change, it often decreases your buying power.
If we are selling and our buyers back out because of the Stop Move, what can we do next?
People are scared and nervous, but there are addendums and contingencies in your contract for this reason. It’s ok to go back on the market. People are still doing solid home offers to avoid large Open House scenarios. Everyone understands the current situation and knows that safety is most important. People understand that all the kids are home so there isn’t always time to tidy up and keep everything perfect. There are opportunities for virtual Open House tours. On the financing side, make sure they are a qualified buyer by talking to their lender. Turn on all the lights and open up the cabinets and doors yourself, so then visitors don’t need to touch as much. Communicate with your Realtor and make sure they are giving safe guidelines to visitors.
If we are under contract, but want to back out because of the Stop Order, what will happen to us?
It depends where you are in the process. If your orders change and you’re no longer coming to the city, you will get out of the contract without any trouble. If your orders are delayed, you can probably get out of your contract because the contract is designed to be effective for 60 days. You’ll regain your earnest money if the orders are delayed more than 60 days. If you are buying a home at your current station and want to break the contract, you may lose your earnest money and you will cost the sellers their money. In this situation, consult your agent and talk to a real estate attorney to make sure you understand the full ramifications of backing out of your contract.
If we’re trying to buy a house during this Stop Move, is there anything we should add into our contract to protect ourselves as buyers?
There is a COVID-19 addendum which extends all the contingencies if need be. It has all been drawn up by attorneys in the past week. We’re trying to protect both sides. Make sure you have your contingencies in place to protect you. Trust your agent and know that they have your best interests in place.
Do a video tour first, and if you really love it then just send one person from the family, but don’t take the kids along with you. You don’t need to buy a house sight-unseen, but agents are willing to work with you to make adjustments. We’re doing drive-through paperwork signings and have modified the process a lot.
Every state and jurisdiction (county) has their own rules and addendums. It’s important to find an agent you trust who understands the contracts. There should be COVID addendums in every state. Extend any contingency financing as far as you possibly can– up to 40 days if possible. Encourage your agent to push these as far as the seller will allow it.
Is it advisable to buy a house at our new location if our orders are delayed? Or should we wait until we get there?
It depends on the market where you are going. For example, the hot market may usually be in spring or in winter. If you know you will PCS to a particular base, reach out to an agent and start getting an understanding of the market: what you should afford, how quickly homes move in that market, etc. We are soon going to see a lot more action and competition with more buyers. You don’t have to wait until you get to the area to get under contract. You may be able to extend for 60 days, then close on the home when you PCS. Timing is everything, and having the right agent who understands your needs and concerns is very important. Agents in the new area have the tools to help you from afar, so you can start the process now. We have worked before with families who buy sight-unseen.
What do I need to look for in a good agent?
Look for someone who treats real estate like it’s not a transaction: it’s a relationship. When you treat everyone with respect no matter what their budget is, that is how you build trust and build your business. A good agent should be able to give you attention and the service you deserve. You should have a feeling whether you like the Realtor you’re working with, and it’s a two-way street where you have to respect each other. If someone is treating you like a commission check, walk away from that person or company. Your agent is the person you spend the most time with when you’re a buyer, around the clock. They help manage many ups and downs. You want to feel comfortable reaching out to them and knowing how to communicate with them.
Will this COVID situation all go away in a month or so?
There are going to be residual effects of this for a long time. This won’t blow over in a month. But interest rates are so low right now, so buyers are looking for that. People usually need to sell before they can buy, so focus on selling first and put your home on the market, so you can have cash in hand looking for a home at the next station. You can always move out, get an apartment, or stay somewhere else until you PCS. Other people are only wanting to disinfect the house once a day, so they are doing showings at particular times, and then they can disinfect all at once at the end of the day.
The inventory is so low right now, so put your house on the market and see what happens, because things are being snatched up quickly if they are priced well right now.
What tips would you give for people selling their homes?
Pay attention to cleanliness and show condition. Counters should be cleaned off and de-cluttered. People get distracted by the military I-love-me wall and military awards, and forget to look at the rest of the house. Make sure it is clean and streamlined and pay attention to staging. Online presence is more important, because more people are doing video tours. Floor plans and 360 degree spins help people feel like they are in the home.
From an offer standpoint, pay attention to the whole offer, not just the bottom dollar. Do your buyers have a home to sell or are they in a contingency plan? When you have multiple offers, consider the financing and pending settlements form other sales. People want to sell quickly, so a stronger contingency may be more important than a higher offer. When you focus on dollar signs, things slip through the cracks, and then you’re losing money because of the additional mortgage, utilities, taxes, etc.
What tips would you give for potential buyers now?
A Class A buyer is someone who is ready and willing to make an offer. Try to be as strong as you can, but still protect yourselves from uncertainties. Present the offer in a strong manner, but make sure to align contingencies. Be aggressive as comfortable with home inspections. Focus on what you want to afford, not just on what you can afford. Sellers are looking for a package deal, so if you are a buyer that’s going to perform, you may win out over another buyer. Ask your agent to dig around and discover what the seller is looking for: sometimes it’s emotional and sentimental too. Find any information about the seller that will help your offer. Communication is important, so put your best foot forward and write a letter if you can so they have a visual and want to put you in their home.
See the complete interview of Coronavirus Real Estate Questions below: