Coronavirus and the Real Estate World
I suppose this could not have happened at a more appropriate time. The building in which I had my office suite had a fire on Nov. 30th, 2019. Although the fire was only in one suite on the second floor the smoke and water damage in the building was EXTREME. All 22 tenants in the building had to vacate the building while it was going to be rehabbed. The estimated return date is Nov. 30th, 2020.
I decided that I would not find another office space and work out of my home. I had done this before between 2014 and 2016, my last three years with a major brokerage before becoming independent and starting my own brokerage. Without a lease, this lowered my cost of doing business.
I had started meeting with my agents once a week at a Starbucks. This worked well until the coronavirus changed everything. Fortunately, on March 23rd real estate services were considered an essential business on the governor’s executive order. It also required social distancing. WAIT, WHAT? Real estate is a relationship type of business. It requires meeting belly to belly with people and talking about their real estate concerns and challenges. How would this be possible? My Starbucks closed, so I could not meet with my agents.
I was planning to take a trip to California to visit my son, his wife, and my turning 3-year-old granddaughter in March. That got canceled. My son suggested that we do a video call on an app called Duo. That happened and I was quite impressed. I got to see my granddaughter, talk to her, and see what new toys she was interested in. I believe communications are enhanced when you can see someone’s face and body language. I thought this might work for real estate. I started having Zoom calls with one of my agents. It was very productive. I could show her computer screens, programs, marketing materials and show her how to do certain things on the computer. But, would this work for customers?
Normally when I list a house I must see it, and not just the outside. I need to tour the house. A good Realtor can tell a lot by just walking through a house. The last time I listed a house and was not able to go inside, I got burned. The assumption is that it is a normal/average house. I priced it as such. Once I got inside, I could not believe what I saw. The owner had a meth habit. Windows had been boarded up from the inside among other things. The house had not been taken care of. I had priced it two times higher than what it should have been. I will never list a house again without touring it.
On April 20th, 2020 the governor updated his executive order. It states that real estate services should be conducted virtually or by telephone whenever reasonably possible, and any professional services requiring face-to-face encounters should be postponed unless the failure to meet in-person will have a significant adverse impact on the client’s financial or legal position. WAIT! Isn’t that what real estate is all about? A client’s financial and/or legal position?
So how was this coronavirus thing going to affect the real estate business? I started reading trade reports and Facebook trade groups on how other Realtors across the nation were doing business. It seems that 1 in 4 buyers will buy a house without touring it. WOW! I read that sellers were not willing to list their houses during the pandemic because they were afraid that buyers would tour their houses and steal their toilet paper and hand sanitizer. Open houses were being done virtually either by buyers watching a video or listing agent showing the house on Zoom and touring the house and talking with the buyers and their agent at the same time. I learned many years ago that you do what the seller wants you to do as long it is legal and ethical. I was ready for the challenge.
In 2007, a Zionsville investor found me on the internet. Over the past 13 years, I have bought and sold 8 homes for him. He called me in March and wanted me to sell one of his rentals in Pike. He wanted to know what it was worth. He was going to rehab it and it would be ready to list by the end of April. Knowing how he rehabbed a house, he was every Realtor’s dream. I came up with a home value for him. It was not set in stone and I would have to see the house after rehab for a final value.
On April 29 I got to see the final product. I was impressed. A very nice 3 bedroom two story with new carpet and paint. It had a very traditional floorplan. I listed it that day. I asked him how he wanted showings to be arranged. Indiana Association of Realtors had just come out with new documents for listings and showings during the pandemic. Basically they were disclosures on how the seller wanted showings and a document that all buyers had to sign in order to tour the house. It asked that buyers take “reasonable precautions” and if someone in the visiting party is diagnosed with a confirmed case of COVID-19, or if a visiting party or any person visiting the property with visiting party has had direct contact within the past 14 days with an individual with a confirmed case of COVID-19, the undersigned agrees to immediately inform Broker.
I am not an attorney! Healthline.com says that 25 to 50 percent of people with COVID-19 are unaware they have the virus. They also said that people with no symptoms are the source of 44 percent of diagnosed COVID-19 cases. It seems to me that we are probably in direct contact with people who have COVID-19 and are not even aware of it. Would these documents help? Would a visiting party touring the house even know that they have COVID-19? It seems to me the only solution to the virus is to be quarantined to your own residence for 3 or 4 weeks and not be in direct contact with anyone.
Back to real estate…after going through the documents with my seller, he said “I want to make showings as easy as possible. They don’t need to sign the disclosure.” Fine. In the next 8 days, I had 23 showings and 5 offers. Again, a Realtor’s dream. An offer was accepted and we close in June.
Not only are Realtors changing the way they do business, but title companies also jumped in as well. I see some title companies are doing closings where the buyer and seller are in separate rooms. I also read where one title company will do an “at the curb car closing”. You never have to leave your car. Remote closings, where you close in a different city or state with a notary have become common. Notaries are a must at all closings. You have to prove to them who you are and they notarize all signed documents. Originally, virtual notarization was to become legal in Indiana as of July 1st. That means that you could close on a home over the internet. Because of the pandemic, the governor moved it up. The title companies are working as fast as they can to make this happen. Now that is what I call social distancing.
I did absolutely no marketing for the house. This just goes to show you that we still have a strong market during the pandemic. With only 60 houses in Pike on the market, it is definitely a seller’s market. A balanced market in Pike would be about 500 homes for sale.
It will be interesting to see how real estate and this pandemic play out.
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