Market shifts to virtual house tours, remote deals amid pandemic

REAL ESTATE: A "for sale" sign is seen along Route 15  in Yigo on March 30. With social distancing rules to avert the spread of the disease that causes COVID-19, the stateside real estate market has shifted to selling properties through virtual tours and some buyers have made purchases without having set foot in the properties they're buying. David Castro/The Guam Daily Post

Jennifer and Justin Lerma, residents of Alexandria, Virginia for five years, had been searching for a house in that community for themselves and their three dogs for about six weeks when the coronavirus pandemic hit the Washington region.

Their determination to move by this summer - and stay safe - led them to make an offer on a property without setting foot inside.

"Justin found a 'Coming Soon' listing on a Thursday evening and when I checked it out online, I couldn't sleep all night," says Jennifer Lerma. "First thing in the morning, we saw that the listing was live, so we drove by to see the outside and check out the yard, which is our priority because of the dogs. I had our agent ... do a tour with me over Facetime and then Justin talked to him on the phone and we made an offer."

The Lermas, both 32-year-old first-time buyers, had their full-price offer of $617,000 accepted that evening.

"Technology allows us to do things that were unthinkable even just a few years ago," says Keith Gumbinger, vice president of HSH.com, a consumer mortgage information site. "Digital mortgage platforms can remotely verify employment and assets and the ability to communicate electronically means we can function. A decade ago, the housing market would have been completely shut down during a situation like this."

Michael Hernandez, a software engineer and first-time home buyer from Arlington, Virginia, purchased a home sight unseen with the help of Redfin real estate brokerage during the coronavirus outbreak.

Hernandez toured the home via video chat with another Redfin agent.

"I was a little concerned that the ceilings would be too low on the upper and lower levels, so I had her reach up to show me the ceiling height during the call," says Hernandez.

Hernandez's $430,000 offer was $5,000 above the list price, which he says was a "little less aggressive" than his previous offers because of the pandemic. He was able to see the house inside after the offer was accepted.

Addendum in light of COVID-19

Most contracts today include a coronavirus addendum that allows for greater flexibility in the timeline between the offer being accepted and the closing, particularly because of potential issues with inspections, appraisals and closings.

"The addendum says that if someone involved in the process is quarantined or ill or an office is closed or other issues (come up), there's an automatic extension on the closing," says Steve Dean, a real estate agent with Compass real estate brokerage in Washington, D.C.

Buyers can also make their offer contingent on seeing the property in person to confirm that it has been accurately represented in virtual tours and photos, says Kathy Chovnick, a sales manager with Long & Foster Real Estate in Middleburg and Purcellville, both in Virginia. Sellers have the right to negotiate on that point.

Almost everyone applies for a mortgage on the phone or online today, says Stanley Middleman, CEO of Freedom Mortgage, headquartered in Mt. Laurel, New Jersey.

The Lermas were preapproved for a loan with Veterans United before they made their offer and handled the entire loan process online. Similarly, Hernandez had a loan preapproval and was able to move forward without needing any in-person contact with the lender.

Safeguards for virtual showings

Like the Lermas, Hernandez had already toured properties with his agent so he felt comfortable that the agent would focus on his priorities.

"We'd toured a lot of homes with (their agent), so we trusted him to point out the details that mattered most to us," says Jennifer Lerma. "This house was a flip, so I asked him to be sure it had been done well. He checked a railing to be sure it was sturdy, opened and closed the doors, checked the light switches and made sure the caulk was in good shape."

Jennifer Lerma also pulled up photos online of what the property looked like before the flip for comparison purposes and directed her agent to show her how the rooms flow together.

"I think a video chat is much better than a recorded video tour because you can ask questions and make the agent slow down for specific things if you want," says Justin Lerma.

Dana Scanlon, a real estate agent with Keller Williams Capital Properties in Bethesda, Maryland, recently held three virtual open houses on her Bethesda listing for small groups of buyers via Zoom video conferencing, resulting in a sale.

"It helped that the open house was interactive so I could open the closets and go outside and return to rooms to answer questions," she says. "The live tour is an important supplement to floor plans, 3D tours and photos."

Virtual tours, renderings, photos and floor plans have all been elements of Van Metre's new construction marketing that are suddenly more important, says Brian Davidson, group president of Van Metre Homes in Fairfax, Virginia. Van Metre sold 18 houses during the last two weeks of March, some through virtual tours and others to buyers who had previously seen the models or walked through them alone.

"Our Design Center is also virtual now and we have 'Build-Your-Own' home software with every kitchen and master bathroom option available to view," says Davidson. "We'll have every other room of the house available for online customizing within 30 days."

While technology can move transactions forward in many ways, some clients will always prefer to see a property in person and others may have difficulty accessing necessary technology.

"Everyone is embracing virtual visits while we're in self-quarantine, but I think in the future we're likely to see more people use this to self-select which properties they'll see in person," says Eddie Rangel, a real estate agent with Compass real estate brokerage in Washington, D.C. "It works best for new construction and when someone the buyers trust is holding the camera during a live video chat."

Technology that allows people to connect virtually has helped many to navigate work and socialize during the pandemic. In the real estate industry, new tools may have a lasting impact on the way transactions occur. 

0
0
0
0
0

Recommended for you