Ask Phyllis!

Buying During COVID

Dear Phyllis,

I am living in my mother’s house who recently passed. I am not the trustee but a beneficiary.  My husband and I can only afford $500,000 and are looking in Palmdale. I need the money from my inheritance to complete the sale.  With COVID everything is so restrictive. The first time we even looked at a home I had to submit a prequalification letter and sign disclosures before we were even allowed in. And then we were only given twenty minutes to decide whether we wanted to buy the home. Each time we want to see a home we have to sign COVID disclosures.  We finally found a home and decided to write an offer.  The down payment is coming from my mother’s house which will be going on the market next week.  Now my Realtor just sprung on me that if my offer is accepted, I will need to make a 3% earnest money deposit to escrow or $15,000.  I do not have that kind of money. At this point I am wondering if she is the one putting up these roadblocks.  Are things really this tough for home buyers today?  John

Dear John,

I feel your frustration. As a real estate professional, I too am frustrated by all the rules and challenges. Let us address your concerns one by one.  Yes, because of COVID only buyers who are prequalified are viewing homes. And this makes perfect sense, especially with homes that are occupied. 

As far as showing time frames, that is determined by the seller and their Realtor®. But I agree that twenty minutes is a very short timeline. And certainly, puts an extra burden on the agent and the buyers to be sure to be on time.

The earnest money (aka good faith) deposit is negotiable; however, it is customary that it is 3% of the purchase price.  Perhaps you have a family member who will help you with a loan.  But discuss this with your lender. The lender will want to verify the source of these funds and additional documentation will be required. If the money is “seasoned” and in the bank for several months, the additional paper trail may be unnecessary.

Best of luck to you on your move!