If you buy a house and then lose your job, then you are just an unemployed homeowner with no way to reverse the purchase. But if the pandemic costs you your job between the time you sign a contract to buy a home and the sale closes, you could have an out.
It is called a COVID-19 addendum.
鈥淚n the residential sales contract, it protects the buyer from any layoff, any furlough due to COVID. Therefore, the buyer can successfully void the contract,鈥� said , regional vice president at in McLean, Virginia.
It is an extremely rare contractual condition in the residential real estate industry. And there is a catch. Sellers have to agree to a buyer鈥檚 COVID-19 addendum, and many, especially in the D.C. area, are not.
鈥淚鈥檓 seeing it in less than 50% of contracts at the moment, simply because the market is extremely competitive, and sellers have the upper hand due to lack of inventory,鈥� Channell said.
Many couples actively looking for houses to buy have seen their household incomes unexpectedly cut due to a job loss, layoff or furlough. But does the spouse’s or partner鈥檚 unemployment benefits count toward qualifying income?
鈥淯nfortunately they do not. So if a spouse loses a job, that spouse can be on the mortgage, but the unemployment income, and previous employment does not count to qualify them for their new home,鈥� Channell said.
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