It is time for the real estate industry to make a move to digital. There are existing tools and apps available that will help safeguard the population from spreading COVID-19, but the industry’s token use of them is grossly insufficient. Currently, the majority of properties sold and leased today still conclude through too much offline interaction.
Because of this, most housing markets are slowing down. While we are in uncharted territory for what’s happening all over the world, it’s essential to understand that this is not a housing crisis. This is not 2008 when the real estate market collapsed, and a gross over-supply of properties saturated local markets. In fact, many areas report fewer home sales due to an under-supply of homes. A significant percentage of home sellers have left the market over fear (and many of these sellers would also be buyers).
Digital Tools Are Already Available
A recent article in the BBC reported that 450,000 buyers and renters are standing by with plans on hold, a staggering figure when one considers so much of the selling, buying, and leasing processes can occur through a digital appointment. When we examine the totality of the real estate sales and leasing process, it’s easy to find new methods of accomplishing the essential tasks.
Homeowners and landlords can use digital tools such as Google Meet or Zoom (free applications) for interviewing agents for the job of seller representation. At the same time, buyers and tenants can utilize digital meetings to select their representatives. My company has found that digital appointments can accomplish the same goals as face-to-face meetings, and information retention by both the real estate agent and the customer appears to be enhanced when done digitally. I suspect this is mostly due to the structure of the electronic meeting. It requires the agent to plan and prepare to a higher level than does a casual face-to-face meeting that is often disorganized and designed to be focused more on relationship building than on instruction and task completion.
Some Things Never Change
The home staging process is typically handled by the homeowner or landlord with no requirement to impose special social distancing and safety rules. This leg of the process is all about getting the property ready for public consumption. Rooms need to be cleaned and decluttered; excess personal belongings need to be moved to storage. Floors need to be cleaned and possibly polished, and touch-up paint typically rounds out the rest of the process.
The majority of property owners do not require outside assistance for these tasks. For those that do, it is not difficult to follow current safety protocols to finish preparing a home for sale or lease.
Safety Protocols For Real Estate Transactions
Once the home is ready, professional photography is required to demonstrate the benefits of owning or leasing the property properly. Creating imagery is the first time in the process of preparing the home for the market that one will have to consider social distancing protocols, as I believe the pictures are far too important than to be shot by the property owners.
We expect 94% of the prospective buyers to use the internet to find their next home, and the pictures will primarily influence the buyers’ or tenants’ decision to discover more about a property. I have seen too many homes sold below their full market value because their presentation online was inferior to lesser-quality properties. Even with a pandemic, the key to getting full market value for a home is by generating offers from multiple buyers who compete and bid the final sales price higher.
The professional photographer should prepare multiple still photos, but should also produce a 3D tour of the home with a Matterport or similar camera that allows the digital visitor to take a stroll through the home. I am always amazed to see that the majority of real estate listings shown online have images shot from an agent’s mobile phone, and no 3D tour is provided. We have been using professional photography and 3D tours for the past ten years, and we have seen the results in our sellers outperforming the market.
Eventually, a buyer or tenant is going to want to visit the property to make a final decision. The current social distancing safeguards, combined with a little common sense, make this easy to facilitate. But there are sloppy practices in the real estate industry that need to be retired to optimize the safety of everybody involved.
Reduce Site Visits Through Better Preparation
It was not long ago that it took months to determine the creditworthiness and capabilities of a prospective buyer. While they were producing paperwork for lenders to review, we would show them properties to see if they found one they wanted to pursue. But today, an agent can get a buyer and lender communicating digitally, and it does not take weeks to get a preliminary approval and amount the buyer will be able to borrow.
Many in the real estate industry have a laissez-faire attitude about buyers looking at homes, with buyers frequently visiting properties they could never afford. Old-fashioned real estate agents consider this part of the process, but it is grossly inefficient and provides no value to the property owner. We’ve seen this practice regress due to the pandemic, but I see no reason why it needs to return. Consumers, through their agents, should demonstrate adequate qualifications and serious interest in a property before being allowed a site visit. Prequalification standards would significantly reduce the opportunities to spread the virus during the real estate transaction process.
We have been offering both virtual chat tours and pre-recorded virtual tours to allow our buyers access to all the properties in our market area. If professional photography and 3D tours were the standards, then the majority of buyers would need site visits on fewer than three homes.
Fewer site visits would hugely reduce the risks involved with assembling multiple parties in multiple locations, thus making safety paramount.
It’s time for the real estate industry to evolve. If not now, when?
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