In March 2020, Covid was dubbed a global pandemic. To slow the spread of the virus, U.S. states issued stay-at-home orders for people working in real estate—at first deemed a non-essential business. Appraisals for real estate contracts were non-essential in Pennsylvania, for example, beginning March 19, 2020.
One month later, Pennsylvania issued revised guidance. On-site appraisals would be allowed. So would in-person notaries, title and title insurance services, home inspections, and final home walk-throughs.
During the season of upheaval, the process of transferring a home changed. So did our priorities. To some extent, our adjustments will become hallmarks of a generation. Here, we look at what was temporary, and what’s now part of real estate for good.
Reasons for Buying Shifted. So Did We.
Our pandemic year tested the potential of the internet to enable remote work and digital nomadism. The internet passed the test, and we left the offices in droves. Some left the urban core for the outskirts. Some bought homes suited for living, playing, educating and working. The real estate market boomed and it hasn’t stopped.
On May 25, 2021, the Dallas Morning News reported:
Nationwide home prices were up 13.2% in March — the biggest such increase in more than a decade. A severe shortage of homes for sale and surging demand has caused U.S. residential prices to increase at unheard-of levels.
As the pandemic appears to wind down, some employees are working remotely for good, while many others are working from home at least part of the time. According to Redfin, businesses will cater to new workers where they are.
And buyers expect more from their homes. Home shoppers notice:
- Homes near amenities. Buyers like to have parks, coffee shops and attractions to enjoy where they live.
- Homes with space. Home offices are in brisk demand. So is space for exercise, privacy, and relaxation at home.
- Clean features. Buyers appreciate extras that keep them healthy, like touchless locks and lights, and antiviral air systems.
Buyers are also attuned to the technology that simplifies their quest for these features.
Real Estate Professionals Have Adopted New Methods.
Mortgage brokers were already making the shift to the online world; in 2020, they accelerated the trend. Title companies and loan servicers can now transfer and receive documents using software. Mortgage approvals and home inspections do not require the buyer’s in-person presence. Professionals learned to adapt to physical distancing rules, and adopted new methods, including sanitation know-how and online inspection tours. In the words of Dan Steward, president and CEO of Pillar To Post Home Inspectors®:
When you are forced to evolve your systems and practices to survive challenging times, you learn that you can evolve when necessary — and, sometimes, more efficient methods come from this challenge.
Because 3D floor plans and tours are now standard, real estate moves quickly. Decisions that once took weeks can now be made in days. Sellers are relived that a single video can show a house in clean and staged perfection infinitely. Fancy open houses are unnecessary; a more casual approach, focused on the serious buyers, has taken hold. Indeed, in many aspects the new 3d technologies are better than open houses.
And the new methods do not rule out safeguards. Buyers can still change their minds if the inspection report falls short or a contingency isn’t met.
Even Closings Can Be Handled From a Distance.
During the virus scare, closings were carried out much like visits to the veterinarian. People signed documents in the parking lots and handed them over to employees dressed in PPE. Future closings are more likely to happen from home, by way of eSignatures and remote online notarization.
Alternatively, notaries might start making house calls, according to Realtor.com. The publication quotes Las Vegas broker Lance Kalfeltz, who reports: “I have one client who lives about two blocks from the escrow office, but still opted to pay the $125 extra to have a notary come to his house.”
In general, digital home closings are a developing phenomenon. Laws, regulations, and customs depend on where the home is. Professionals need to follow the developments to work with new generations of clientele.
☛ Notice anything new on your notarial certificate? It may state whether the notarization was done in a physical meeting or remotely. See Notaries Go Remote: A Digital Shift Is Changing Notary Language.
Real Estate Agents Have Adopted New Sales Methods.
Real estate agents have collectively come up with creative solutions for working with challenged sellers and buyers. Agents are using different mechanical options — for example, they’re deploying smart door locks that work remotely. They’re also becoming adept with audio-video technology. They understand the way remote signings and notarizations work. They perceive the value of YouTube and Facebook Live in the art of connecting the buyer to the right house.
Graphics and home descriptions in agents’ online listings are increasingly robust now. Today’s buyers spend a lot of their research and browsing hours online, and they expect listings to contain:
- Detailed and comprehensive interior measurements.
- Descriptions of upgrades, extra rooms, exercise options, and accessory dwelling units (in-law cottages).
- Local ordinances involving permission for additions, decks, etc.
- Notes on local shopping and amenities.
- Keywords to help guide quick searches for specific details.
Expect brokers and agents to enhance their websites dramatically if they have not done so already. Expect them to be available on social media, with updated information about homes and markets. Professional leadership in the real estate field will involve the creation of actionable tips and online support.
Briana Strauss of Constant Contact describes social media as a way to “[d]eliver valuable information to boost certainty in uncertain times.” Strauss urges agents to develop a heightened awareness of their clients’ lives and challenges, and more attuned to the financial resources their clients might need.
Now That Social Gatherings Are Back…
The recent months have changed the way we do real estate. Now, we can assess the innovations. Much of what we introduced in an emergency situation was well worth refining and keeping in place. An exemplary development is the rise of online everything — showings, loan approval processes and title work. Quick-thinking deed recorders in several counties, like Cook in Illinois and Sarasota in Florida, have offered eRecording for mortgages and deeds; they had the right mindset for our times.
Even inspections can be performed remotely, and the result is a video experience that buyers can keep and review with their agents or advisers at their leisure.
Of all the key Covid workarounds, could the least likely to prevail in a post-pandemic world be the remote appraisal? The most useful, accurate appraisal examines not only the house itself, but also its setting and surroundings. That perspective generally requires an on-site inspection. But technology will enhance appraisers’ work, too. Watch for drones carrying out virtual appraisals, using damage detection software to spot more than the human senses could ever uncover.
For the real estate sphere, the post-pandemic era will be a time of dramatic change. And we promise to keep you posted as it unfolds.
Supporting References
JD Supra®: Pennsylvania Shuts Down On-Site Appraisals for Residential Real Estate Contracts Entered Into After March 18, 2020; see also Pennsylvania’s revised guidance in April 2020.
The Dallas Morning News (Tribune Content Agency): Dallas-Area Home Price Gains Top Nationwide increases (May 25, 2021).
RisMediaTM: Ask the Expert — How Covid-19 Has Altered the Home Inspection Industry (Sep. 30, 2020).
Lisa Johnson Mandell for Realtor.com: Covid-19 Completely Transformed the Way We Buy Homes — But Will It Stick? (Mar. 17, 2021).
Cicely Wedgeworth for Realtor.com: One Year Into the Pandemic, Our Outlook on Home Has Totally Changed — Possibly Forever (Mar. 11, 2021).
Briana Strauss for Constant Contact Blog: Adapting Your Strategy as a Real Estate Agent During COVID-19. (updated Jan. 11, 2021).
Dominic LoBianco for Rocket Mortgage: The Evolution of Showing Homes During Covid-19 (May 17, 2021).
And as linked. Photo credits: Liza Summer, via Pexels.