Buying or Selling During COVID-19: Here is What You Should Prepare For
Condensed content from Article by Cara Ameer (award winning Broker Associate, REALTOR, real estate media contributor & speaker based in Northeast Florida) published by Inman News
In light of recent events, here are six things every buyer and seller should know when it comes to transacting real estate during this tough time.
1. The buying and selling landscape has changed
Buyers might feel that sellers and agents should be rolling out the red carpet for them to look at homes. Please understand that this process might not be as instant as it was last week or even two days ago.
While just about every real estate company and builder is putting preventative procedures in place, please know that showings involve the risk of potential exposure to multiple other parties, as well as to the properties you’re seeing and those who live there.
Not every seller or occupant may be comfortable with strangers going into their home. Your exposure becomes their exposure. You might be asked to remove shoes and wear booties, leave unnecessary items outside the front door, use hand sanitizer and anti-bacterial wipes, and refrain from touching anything in a private residence during a showing.
Buyers might also be asked to keep the viewing time to a minimum — 15 minutes versus an hour spent sitting on the couch or standing around the kitchen island and envisioning their lives there.
While buyers might expect instant gratification with access to properties, patience is also a huge virtue for any seller trying to sell right now. We’re early on into the quarantine process; we’re in unchartered waters when it comes to knowing what the pace of showing activity will be.
That activity (or lack thereof) will be different for every seller, depending on price range, area and the level of risk where the property is located. Just because there haven’t been any showings in two weeks doesn’t mean there aren’t potential buyers for the home.
The good news? With everyone spending loads of time at home — most likely in front of a computer — anyone who’s in the market to buy a home will be searching online. Having a video posted with the listing will be key to generating a lot of interest on the property, as well as the ability to share that across various social channels. It’s possible to get an offer based on the video alone.
It just happened on a property I had listed, and it was from a legitimate, serious buyer. This is the second time in six months that I’ve had that happen. (The last time was on the verge of yet another hurricane headed toward Florida).
The power of video really stands out in times of stress, especially when physically seeing a property might not be possible. If the property is empty, hosting virtual open houses are also a great way to invite potential buyers without physical interaction.
If sellers are serious about selling, stay the course. With interest rates at an all-time low, there are buyers who will absolutely be taking advantage of favorable conditions to leverage their buying power. While it might seem like a desert as far as buyer traffic goes, once COVID-19 starts to wane, showing activity could bounce back with force.
2. The transaction will likely be socially distanced
Agents will likely ask buyers to take their own car to meet at showings. If buyers are coming from out of town, encourage them to rent a car for their protection and the protection of their families (and your safety, too!) If you thought being mashed together in an airplane was bad, multiple people in one vehicle is much too close for comfort in times like this.
The National Association of Realtor (NAR) guidelines have permitted agents to ask buyers and prospects about travel history and potential exposure to the coronavirus. The guidelines also permit asking if clients or anyone they’ve been with is sick or has a fever.
Suyers shouldn’t shrug it off or take offense if they’re being asked these questions by anyone involved in setting up a showing appointment — whether your agent, the listing agent or the brokerage is asking please answer correctly and patiently — they are all trying to follow the laws and keep everyone safe. Under these circumstances, a seller has the right to understand the scenario of potential visits to their home.
Open house events have largely been prohibited and severely frowned upon due to shelter-in-place orders in several cities, counties and states. Where allowed, open houses are by-appointment-only and occur only after an agent has gone through a series of qualifying questions with the buyer prospect.
Agents are simply not in a position to let somebody, anybody or everybody in a home for the sake thereof right now. This doesn’t mean they don’t want to sell the home. It simply means they have to be responsible about how they handle it.
While no one likes the idea of lost income, the idea of losing a life is far worse than any economic impact. If agents meet clients at a home, they will be practicing social distancing. They might even have the home open for you to view while they stay outside. It might be best to engage in follow-up conversations via phone after the showing ends.
Buyers should understand that they will most likely not be able to meet with their agent at their real estate office and might need to agree upon a mutually agreeable location outdoors. Phone and video will be your best friend in times like this.
Sellers might be frustrated at a sudden drop in activity, and demand that their agent be “doing more” in the form of lavish spending on ads or other kinds of promotion — print, digital, mailings or other activities that you think will sell the house.
Please understand that open houses and broker caravan types of events are not being encouraged in this type of environment. Not to mention, due to restrictions imposed by state and local governments, some real estate companies are outright prohibiting them for the safety of all involved. Also understand that the costs of selling a home add up for the agent, and the longer those costs are accumulating as the home is on the market that takes a serious dig at your agents’ ability to provide for their family and staffmembers.
3. Now is not the time to try to take advantage of someone else
Buyers might be tempted to throw out multiple low-ball offers at sellers to see what will stick. Buyers might feel as if they are entitled to a deal during these unusual circumstances. Please reconsider.
While they certainly can negotiate, trying to rub salt in the wound of what’s already a trying time will not be appreciated or celebrated. Don’t approach an offer with the intention of playing to a seller’s vulnerabilities or an overblown sense of despair in the market.
Everyone is in unchartered territory, and this is an uncertain time on many levels. No one is exempt. Consider making a fair offer. You might be surprised to find that you will get further with a seller that way, versus starting ridiculously low and asking for pie-in-the-sky concessions.
On another hand, you don’t know what other offers a seller is getting for their home. Offers are still coming in, and another family who puts in a fair offer might outbid you.
4. Delays will inevitably happen
Right now, life isn’t going according to anyone’s plan. Major life events such as graduations, anniversary parties, showers and weddings are being postponed or cancelled. Sadly, even celebrations of life due to a loved one’s passing can’t be held.
The same is likely for a real estate transaction. Whether a buyer or a seller, help them understand that there may be delays with all facets of the transaction process as human interaction is compromised over the next few weeks or months. They’ll have to plan accordingly. Inspections, appraisals, loan processing and underwriting, as well as issuing the clear to close and getting the package from the lender to the title company, will be challenging during this time. Inspectors whose work can be potentially hazardous in the best of times have to take special precautions now like never before. Their job entails physically touching and testing numerous components in a home, many of which could be germ-infested. Appraisers also face a similar risk by having to physically enter numerous properties to do their job.
A closing date is just that — a date. And while everyone can do their best to make that date, in this situation, we’re dealing with circumstances beyond anyone’s control.
Buyers should allow themselves plenty of float time if they’re terminating a lease. It might be better to plan for an extra month or two to vacate their rental versus cutting themselves short. There could also be challenges encountered with hiring moving crews during this time.
Also, buyers should be considerate of a seller’s request to lease back for a certain amount of days after closing. Before sellers try to move mountains to get their house packed up and vacate, they will want the comfort of being able to close on the home and have their proceeds securely in their bank account.
Buyers and sellers need to be flexible and understanding with each other regarding obstacles out of their control during this time. To that end, addendums that address delays in transactions due to the coronavirus have been released for use by various state real estate associations to help manage delays that might arise, as well as the need to cancel the transaction and etc.
5. Adjust your expectations & Accept that you might not have all the answers
We’re living in unpredictable times. No one has all the answers — and that includes real estate agents. While people are doing their best to obtain information and updates from their company’s real estate leadership, local, state and national Realtor associations, along with national, state and local officials, this situation is rapidly changing. What happens today might be drastically different tomorrow.
It can be easy to panic at the thought of the unknown. Will things get better after mid-April when many of those “temporary” closures and lockdowns are supposed to end? Those are arbitrary dates and deadlines, and we don’t know if they will be extended.
Real estate is a business based on results and outcomes. Sellers, ask your agent for recent data — that is the best evidence for what is going to happen going forward, but don’t expect them to predict the future. You can ask for the number of days recent closes in your area were on the market, you can ask about the closing price of those homes, and get an estimate for how much you expect your home to close for — even if that isn’t your asking price.
Achieving those same results might not be possible now or in the next few months, and everything is up for grabs. Whether you’re buying or selling, it’s important to stay flexible and focus on the process instead of the outcome.
Although outcomes are uncertain at this time, there are processes we can control. This means staying the course and not reacting in a knee-jerk manner to every headline or “breaking news” update. It’s all breaking news, no matter the channel, designed to get mesmerizing attention 24/7. Things might all appear to be doom and gloom right now, but that is what keeps viewers engaged–fear spreads fast.
Sellers don’t have to suddenly pull their homes off the market. Buyers don’t have to abandon their property search right now.
If clients are in a position to do so, they can put the current mortgage market to work for them. Never before have buyers been able to leverage their purchasing power, and for sellers, this same purchasing power may enable a buyer who is able to get into their first home, a move up property or their ultimate luxury dream home.
No matter what, it’s important to remember that everyone has to live somewhere. Our homes have never been more important to us than right now. They are a place of solace, respite, work and the ultimate shelter from the storm — no matter what kind of storm that is.
At the end of the day, our home is the one sacred place where we can work through our deepest fears and challenges, rejoice in the happiest of times and simply relax and be who we are without fear of judgement or criticism.