Buying a Home During COVID

Here are the lessons I learned buying my first home during the COVID-19 pandemic

Here we are entering our second consecutive year of the pandemic and the housing market continues to roar.  It has been well over a year now that we have been dealing with the impact left by a shift into a more home-based lifestyle. 

With the advent of social distancing, much of the American culture has shifted indoors.  More companies are allowing employees to work from home, either permanently or intermittently. 

Further, much more of our lives have shifted inside as well.  Many of our educational activities are taught in front of a screen, our entertainment, our professions, and even our health and recreation has been performed in-front of a screen (here’s looking at you Peloton). 

With all of this said, the importance of one’s home has expanded quite dramatically in a short window of time.  Since the start of the COVID pandemic we have now asked our home to house our families, our entertainment, our dining plans, etc.  With this we saw an absolute explosion in the real estate market as individuals and families alike looked to relocate to new and novel locations.  Much of this was driven by the mentality, ‘if I can work from anywhere, where do I want to work?’ It was also driven by a need for expanding square footage.  If family were going to be stuck at working from home with their children, they wanted more space.  We saw more and more people migrating out of larger metropolitan cities or buying second homes.

Why we decided to buy a home in a pandemic market

It was during this time my wife and I found out that we were pregnant.  We had two large dogs and were renting our current residence.  We realized the need for a slightly larger home, as well as a fenced in backyard.  With a baby on the way, we too were finding expanding expectations of what we called “home.” 

For this reason, we started to look for properties that fit our needs.  We were looking for a single family home in the area we currently lived.  The home needed to have enough room for us, the baby, and family.  Other needs included room for an office, a garage, and a fenced in backyard.  With our needs in hand we set off on our journey towards buying our first home. 

Here are the lessons we learned.

1. Make offers early and often

One of the first things we learned is, in a market this hot, you do not have as much time to delay an offer. 

My wife and I, being physicians, are relatively thorough and logical individuals.  It felt unnerving reviewing a house that was recently listed on the MLS or online; having to decide if we should make an offer within the day! 

We learned that the average time on the market in the area we were looking was less than 24 hours.  We found it vital to make sure we separated our “wants” from our “needs.”  When we approached homes, we first confirmed that it met all of our “needs” (i.e. number of bedrooms/bathrooms, garage, fenced in backyard, distance from work, location.)  From that point on we would make our offer.  We could figure out the “wants” after our offer was accepted or rejected. 

2. Be willing to make an offer sight-unseen

Now I am not saying this is the best way to go about it, but it may be necessary.  So much of home buying in its early phases is spent behind a computer screen scouring the corners of Redfin, Zillow, local real estate sites, and the MLS.  With this comes beautiful and enticing photos, house after house.  Many of them will look appealing, but not every one will meet your needs. 

I found it important as time went on (and we lost offer after offer) to know my needs by heart.  For this reason, when a home came on the MLS that met our needs and I was working in the ICU, I ultimately decided that it would be best to place an offer ‘sight unseen’ as this would be better than missing out on a property that met my needs.  Surprisingly enough, the home we did this on ultimately ended up being the house we bought! 

3. Do not be discouraged by losing an offer

We had multiple offers refused. 

On one occasion our realtor got laughed at when he went to the seller’s agent with our offer (their asking price!).  However, it just took time to understand that the vast majority of homes during this pandemic market were going for higher than asking price.  If they were not going for asking price, then they likely were being bought with cash. 

As with many who ultimately buy their own home, the size offer you are making can be quite unnerving.  It can seem counterintuitive to offer above asking price, but we found this the most competitive way.  We had multiple opportunities where we were discouraged or confused by our offer refusal. 

In medicine, we often have the opportunity to receive feedback.  You order a test or pursue a diagnosis and the following day you have data that can indicate if you are honing in or not.  In home buying, a process riddled in red tape and legal documents, you often receive zero feedback following an offer refusal.  This can leave many asking, why?

This was a difficult pill to swallow as we wanted to understand why our offers were being rejected.  However, we persevered and ultimately found a home that was a perfect fit for us, meeting every need and want. 

So, stay the course and do not budge on the items that you deem necessary for your lifestyle (within reason). 

4. Buyers have little negotiating power

It is true.  In a market this saturated with buyers, the sellers have all the power.  We found that in order for us to have our offers accepted we had to compromise on every occasion. 

First, we had to increase the amount of “skin in the game” we included with our request for “due diligence.”  In a pre-COVID ear, most realtors could get zero dollars for due diligence.  In this market we found ourselves having to put upwards of $2,000 to be competitive.

Secondly, following inspections, the sellers can (basically) say no to the vast majority of repair requests.  If you are unwilling to accept the house ‘as is’ then they have dozens of other potential buyers foaming at the mouth.  For this, it was a undertaking to pressure the sellers to compromise on things we deemed non-functional and in need of repair. 

5. Don’t skimp on the inspections

Don’t be frugal during inspection time.  If you spend a few thousand dollars to find out the house is an absolute dumpster fire, it will be the best money you ever spent. 

If you find that the house is in pristine condition and in need of minimal repairs, well that is great news too, especially if you paid for a thorough inspection.  You hopefully will not find anything deal breaking, but likely will find many things that need repair. 

Here is where it gets tricky.  Many contracts state that repairs are deemed appropriate if they are ‘proven non-functional’ (and in a certain category of systems).  Repairs (unfortunately for the buyer) often fall into a ‘no-man’s-land’ spectrum of nonfunctional v. aesthetic.  Buyers argue non-functional, sellers argue aesthetic.  A great inspector can document why something is non-functioning.

Take home points

The process of home buying is an anxiety provoking process.  Home buying during the COVID pandemic housing boom is an even scarier experience.  By clarifying your housing needs, separating out your housing wants, and being perseverant, you can still strike gold.  We found a way to recognize the aspects we can control in this process, yield to the parts we cannot, and ultimately were able to buy a home that fit us perfectly. As always…

Stay Motivated!

The Motivated M.D.

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