During the statewide safer-at-home order, residential realtors were considered an essential business, so they could still market homes and show them virtually, if not in person.
However, adjustments had to be made.
Given the current low inventories and the likelihood of pent-up demand once things open up, one local real estate executive does not expect the pandemic to have a detrimental impact on home prices.
According to Dave Stark, president of Stark Company Realtors, many residential realtors have been doing more virtual tours, and sometimes not only does the potential buyer “walk through” without the realtor because of social distancing, they will purchase the house after only seeing it online.
“Don’t hold me to this exact number, but anecdotally, I’m hearing that 25 percent of the offers we’re getting are sight-unseen offers,” Stark says. “Many people are looking online, doing virtual tours, driving by them, and satisfying themselves that it’s worth taking a shot at, and so they’re doing it. There are risks that go along with that because obviously, at some point, they will do an inspection. We’ve seen some making the offers contingent on a walk-through at a later date, which carries some risk for the seller. So, people have to feel their way along with that.”
Taking precautions
| “We’re lucky at this time compared to the last recession. Our industry is well positioned to handle something like this.” — David Stark, Stark Company Realtors |
In most cases, however, buyers still want to see the house in person. When that happens, all the necessary precautions have to be taken. Everybody is set up with gloves, masks, and hand sanitizer. Surfaces are not to be touched. Only the essential decision-makers come through; no extended family and friends can take part. Sellers are expected to thoroughly clean their home after each showing.
“We’re trying to keep it as neat and tidy and contained as we possibly can,” Stark explains, “but at some point, people do want to see it. So, for those sellers that are comfortable with it, that’s what we do.”
Another trend Stark has seen is that a lot of sellers are opting not to put their house on the market right now, so the number of new listings is down quite a bit. That’s created an interesting dynamic because there are a lot of buyers, and when good listings come on the market, multiple people want to look at them. According to Stark, his clients are still getting multiple offers at a time on a house on the day it hits the market — sometimes up to eight or 10 offers.
While business is down, the expected pent-up demand is the silver lining. “Our agents are telling me anecdotally that they have a lot of people waiting,” Stark says. “A lot of them [had] two, three, four, or five people waiting for this [stay-at-home order] to lift before they list[ed], so I think you’re going to see a flood of listings and activity [now that] the stay-at-home orders are scaled back a little bit. So, it’s been an interesting dynamic that we’ve had to try to juggle.
“We’re lucky at this time compared to the last recession,” he adds. “Our industry is well positioned to handle something like this. We’re not a like a restaurant that’s really dependent on daily receipts to keep things going and pay people. We have a long transaction cycle. We have big ups and downs, day to day and month to month, in terms of what our revenue streams are, so if people put it off for a month or two, that doesn’t necessarily make much difference to us.”
Home sour home
The safer-at-home situation that people find themselves in might even produce customers where none existed. At least, that’s the theory of one Stark Company agent, and David Stark is in no position to argue.
“One of my agents had a good thought. She said, ‘You know, there are a lot of people who have been sitting in their house for a month or two and they are going to think that if they ever go through this again, they don’t want to be in this house. They’ll want a new one,’’’ Stark recounts. “That might be a little bit of an exaggeration, but I do think a lot of people are going to come flying out of their houses and want to do something — and looking at houses is something they are going to want to do.”
Pent-up demand is likely to be a short-term effect, but Stark also expects a deeper interest in remote house hunting to linger for quite a while. In fact, the industry has been working to develop better virtual tools and the pandemic has intensified that effort. Stark invested in a small, handheld gimbal that can be affixed with a cellphone for video capture as an agent walks through a home and talks with a prospective buyer with the help of computer technology.
“It allows for much better video production, it allows for a much steadier camera, and it just allows you to do a better job with that sort of thing,” Stark says. “We’re doing more with virtual open houses, which is just a variation of what I just described, or video tours are being pre-shot and put up on the website. We are just this week prioritizing video tours on the website in terms of the picture array that we have for each house, so yes, the answer is that there will be more of that.”
E-closings
There also will be greater use of electronic documents. Stark Company Realtors’ house lender just added some virtual closing opportunities for certain documents that don’t need to be notarized, which reduces the amount of time that has to be spent at the title company signing things. “This streamlines the process, and I think you’ll see that continue,” Stark predicts. “Wisconsin has passed an online notary law which [took effect May 1]. It still won’t solve all the problems with this, but you’re going to see more and more of it being done virtually.”
In some ways, Stark says the pandemic has provided an affirmation about the simple fact that homes are important to people. Everybody lives in a home in one form or another, whether it’s an apartment or a condo or a single-family house. “Whether they rent it or the own it, everybody has one and for somebody who owns, it has to be transferred and moved and it’s a process that’s very important to people,” Stark notes. “Even with the obstacles we’ve had to overcome during this pandemic, the need to do it is strong as it ever was, and I’m not sure it won’t get stronger after this.”
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