Change is a constant occurrence in the real estate industry.
As new technologies emerge and economic cycles continue to shift, real estate has always been on the receiving end of these changes. But perhaps none of these disruptions has been as impactful as the coronavirus pandemic.
In almost overnight, the traditional processes of selling and conducting open houses were almost shut down. The property market was battered by the pandemic. Home sales experienced the steepest drop since 1981 (when mortgage rates hit 18%). The market also saw many sellers pull off their listings and the housing supply took a massive hit.
While the worst may be over, the ripple effects of the COVID-19 on real estate will be felt for years to come. Realtors are still adapting to the new normal and the industry is still in the recovery phase. So what is the reality of being a real estate agent in 2020? We'll look into the life of a real estate agent and the changes that have disrupted the industry due to COVID-19.
Video Conferencing Has Transformed Agents' Communication
Effective communication is critical for any real estate business.
A typical brokerage will consist of real estate agents, sales agents, admin, administrative assistant, and more. Your real estate team (check this article on how to build a rockstar real estate team) needs to communicate regularly to deliver up-to-date info on transaction progress, changing laws, and market updates.
On a typical day, an agent may also need to meet with clients from time to time to update them on the progress of the sale.
However, the coronavirus and the ensuing lockdowns made these interactions nearly impossible due to the prohibition of in-person contacts in 2020. Thanks to video conferencing tools, realtors found a way around the restrictions amid the COVID-19 stay at home policies.
John Maseredjian, a renowned realtor, says he has been using video calls to not just show properties but also handle other important aspects of real estate. Maseredjian, who is also the vice president of JohnHart Real Estate says he has been using Zoom to keep in touch with his clients during the pandemic.
Virtual Walkthroughs are Here to Stay
We live in a digital world, there is no doubt about it.
While technology may have revolutionized most of the old real estate practices, some of the old tricks like house showings still get the job done.
Keep in mind that conducting an open house requires potential buyers to be physically present. But earlier in the year, most states enforced a lockdown that paralyzed nearly every business activity that requires physical contact.
Due to COVID-19 restrictions, agents had to devise ways to interact with their clients and conduct house showings remotely. This gave rise to the popularity of virtual touring tools.
COVID-19 accelerated the use of virtual walkthroughs, 3D mappings, and drone surveys of residential property. These virtual walkthroughs allow buyers to enter a space and explore each room completely with 360-degree movement.
Today's realtors don't need to schedule appointments for in-person house showings. All they need are the necessary tools and apps to conduct virtual tours of the property.
And with virtual tours, buyers can move through the house as if they were physically present; they can look down to see the flooring and even estimate the scale of the room and cabinets all while at the comfort of their coach.
While many countries, the US included, have lifted the lockdowns, some trends that gained traction during the lockdown, like virtual walkthroughs will remain. Industry reports show that virtual showings have increased 10,000% in China and we could see the same happening in the US soon.
Remote Working for Real Estate Agents
Thanks to the popularity of virtual property touring tools, real estate agents have been leveraging these tools to work from home during the pandemic.
Brokers and sellers have figured ways to sell off property completely remotely. According to Alex Horn, a New York City developer, transactions in this climate are taking an enormous amount of coordination. Nevertheless, all the parties involved in a real estate transaction (the buyer, the seller, the bank, and the attorneys) need to be on the same page.
Alex also notes that the ability to utilize electronic notarization-a measure that was introduced on March 19 has further facilitated remote closings. Savvy real estate agents are also leveraging electronic signature solutions to facilitate transactions without the need for in-person contacts.
Contact-less Inspections & Appraisals
After the offer is accepted, the next step is to schedule inspections. The lender may also require an appraisal of the property before the loan is approved.
All these steps require the seller and sometimes even the buyer and their agents to be physically present. Even though COVID-19 has not eliminated in-person inspections and appraisals, it has changed the way these tasks are conducted.
It has become common for inspection companies to advise the seller, the agent, and other parties involved to stay in a certain part of the home while masked and gloved professionals conduct a thorough house inspection. Some lenders are even accepting drive-by appraisals alongside photos of the property to qualify the loans in a bid to minimize the risks of infection.
To Sum It Up
2020 will go down in history as the year that flipped the real estate industry upside down, thanks to the novel coronavirus pandemic.
While the pandemic may have impacted the property market negatively, it also presented an opportunity for realtors to adapt and devise new ways of doing business. And some of the trends that came as a result of COVID-19 will remain even after the pandemic is over.