The COVID-19 pandemic has impacted all industries, including real estate, pushing brokerages to adapt new methods of communication and transaction processes, and create contingency plans and precautionary steps to keep everyone healthy.
Brokers and agents are having to react quickly. Like everyone, Rett Harmon, principal and REALTOR® with CENTURY 21 Novus Rettro Group in Georgia, is figuring it out day by day.
“Nobody knows what to do,” says Harmon. “We are all trying to protect everyone we work with and their families. There is no exact procedure for handling something like this. I think everyone is erring on the side of caution.”
What’s changed since the emergence of the virus? On the surface, the markets remain active. Interest rates are at historic lows and several brokers and agents have been managing multiple offers in the last week.
“Overall, demand remains strong across our footprint,” says Lennox Scott, chairman and CEO of John L. Scott Real Estate in the Pacific Northwest. “So far, we have seen a continuation of the robust spring market with low inventory and, as a result, have seen little effect on how quickly a home sells, which does put pressure on buyers to see homes and make offers on homes that pique their interest.”
There is one, segment, however that has been noticeably impacted: sellers. With each passing day, the environment shifts a little more.
Ali Berry, broker/owner of Quest Realty in Michigan, says that he’s started to see a good amount of people who want to wait to list. Their primary concern? Having strangers walk through their home and unknowingly spread the virus.
“I think we will have a lot of people that are reluctant to list their home until things really blow over, which will further increase the lack of supply, creating an even hotter seller’s market for those that do list now,” says Berry.
Harmon agrees that COVID-19 is impacting sellers the most, slowing down showings and open houses, as well as other in-person meetings.
“Their kids are also home,” says Harmon, “and sellers are paranoid about the germs. It’s the same with listing appointments.”
As with anything, however, there’s a spectrum, says LP Finn, operating officer of Coach Realtors®, which spans from Queens to Suffolk County, N.Y.
“The impact is noticeable on many fronts, and I think we’re seeing that with our sellers. Homeowners on one end of the spectrum are very concerned, while the other end is saying, ‘Bring on the buyers,'” says Finn. “We also have the same kind of spectrum with our agents.”
The buzz phrase right now is “social distancing.” What does that mean for an industry that thrives from in-person interactions?
Social distancing is the best way to slow the spread of the virus and “flatten the curve” so that the healthcare system can manage the number of people who are sick at one time, according to health experts.
“Social distancing is becoming our new norm,” says Matt Dolan, broker of Sagan Harborside Sotheby’s International Realty in Massachusetts. “We are taking extra precautions to stay healthy and developing specific protocols for our line of work.”
Even office-level interactions, however, have been sparse as a precaution.
“We have asked our agents to work remotely as often as possible, scheduled our team meetings to be hosted via video conference and we have also asked our brokerage, escrow and lenders to utilize DocuSign when acceptable,” says Gil Torres, broker/owner of Exclusive Realty & Mortgage, based in West Sacramento, Calif.
Most brokerages have recommended that their agents work remotely, if possible.
“With any situation in real estate, it’s important to plan for all potential outcomes, yet have the flexibility needed to be nimble as things change,” says Scott. “We’ve been working closely across departments and keeping in touch with our office leadership and brokers to understand the current situation and anticipate future needs. Above all, we are ensuring our plans and recommendations are in alignment with current Department of Health guidelines and our brokers’ needs.”
How are brokers shifting their business model during this time?
Finn says it’s simply about modifying the business.
“We are working on a three-part plan: people, production, prudence,” says Finn. “With step one, we’re really trying to show care and concern for people when working with them. We ask ourselves, ‘How can we accommodate their feelings?’ because we have a responsibility to them.”
In terms of production, Finn is proactively increasing engagement between upper management and the leadership team, and between the leadership team and agents, to create an open flow of dialogue.
“Prudence—this is more internal, but we have to make prudent business decisions that will allow us to weather storms and protect our company—all while not reducing service or our fiduciary responsibility to our sellers for as long as we can,” says Finn.
Dolan is taking a similar approach, focusing on three things as well: safety, technology and experience.
“Safety comes first. We are taking precautionary measures to protect our clients and other industry professionals,” says Dolan.
Then, as health guidelines necessitate less in-person contact, staying connected via technology and social media is more critical than ever. Agents are relying more heavily on automated programs that help them manage the increased need to engage with clients and prospects virtually. RISMedia’s ACESocial program, for example, has seen an increase in demand as real estate professionals seek to increase their role as a trusted advisor and information source in this uncertain time.
“Technology is coming to the forefront,” says Dolan. “We are using technology and providing creative solutions to bring new options to buyers and sellers. And experience—in difficult times, we lean on our learned knowledge and apply it to these new challenges.”
Daniel de la Vega, president of ONE Sotheby’s International Realty in South Florida, agrees that brokerages should keep supporting agents and clients as much as they can—and for this, technology is the answer.
“We have the technology, tools and culture to ensure we don’t miss a beat,” says de la Vega. “We are leveraging technology, including our in-house digital texting assistant, OTTO, so agents can easily text with any questions that might arise.”
What does this mean for showings and open houses?
Brokerages across the U.S. are taking steps to prevent the spread of the virus during open houses and showings, whether by holding virtual open houses, scheduling appointments, disinfecting before and after or canceling them altogether.
Dolan says he is being extra vigilant about wiping down surfaces, doorknobs, cabinet pulls, etc., and asking prospective buyers to remove their shoes upon entering a property.
“When driving clients in our cars, we are extra mindful of cleaning off seats and disinfecting surfaces,” says Dolan, adding that, ideally, clients are driving their own cars.
Melinda Estridge, owner of the Estridge Group at Long & Foster Real Estate in the Washington, D.C. Metro area, has been bringing Clorox wipes to her open houses, also wiping down counters and doorknobs before and after the open houses.
“I think there may be more of an issue in the coming weeks,” says Estridge, “but if a buyer views a house with an agent and they use plastic gloves to open doors, etc., then there should be no threat to a buyer being exposed.”
“This past weekend we had open houses via appointment in 20-minute windows,” says Finn. “People could come see the house, but they had to make an appointment online or through the office.”
Harmon is also taking greater advantage of social media, reporting that some agents have been doing live Facebook videos of a property instead of holding public open houses. So far, they’ve had a good response.
Scott says his brokerage has added a new addendum to listing agreements that addresses open house and showing concerns.
“Should a seller choose to move forward with an open house, they can select a public open house or private showings,” says Scott. “For the former, this open house would be a metered open house, only allowing small groups to enter the home at one time.”
Scott says these measures will help ensure that only serious buyers are allowed into a home and that the homeowners and agent are more protected.
Many areas have opted to cancel all open houses out of an abundance of caution. Westside Estate Agency sent a message to all agents, for example, briefing them on a new policy to discontinue open houses for the time being. In San Mateo and Santa Clara counties, Sotheby’s International Realty asked its agents to cancel all open houses following a health directive that prohibits any gatherings that bring together 10 or more individuals at the same time, in a single confined space, according to an email sent to RISMedia.
Virtual options are becoming more commonplace.
Mariana Pappalardo, team leader of the Mariana Pappalardo Group at Golden Gate Sotheby’s International Realty, based in San Carlos, Calif., is leaning on a virtual tour app called Yaza.
“I’m trying not to feed into the fear,” says Pappalardo. “We just get as many tours on Yaza so our customers can start touring the properties right away. I recommend that agents collect content and share it with everyone who isn’t able to go to an open house or showing.”
Peter Sisson, CEO and co-founder of Yaza, says he saw a sudden change this past weekend, particularly in reference to Sotheby’s International Realty’s decision to cancel open houses.
“Lots of agents are wondering how they will be able to stay on the job and earn a living without putting themselves, friends and family at risk,” says Sisson. “With Yaza, the agent records narrated showings once and then the homebuyers tour houses in the app from the safety of their homes. This way, they only need to visit properties if they know they want to make an offer.”
Other companies, such as Propy, a virtual closing software platform, and Ideal Properties Group, a NYC brokerage, have been providing online services that can help agents continue working with buyers and sellers without causing too much disruption, all while ensuring they stay healthy.
“Showings on Demand is Ideal Properties Group’s way of addressing the current need of our associates, customers and clients,” says Aleksandra Scepanovic, managing director of Ideal Properties Group. “We are acutely aware of everyone’s need to minimize social exposure and congregation. By scheduling, organizing and hosting showings and open houses one-on-zero (agents will be broadcasting from a home to a virtual audience), agents continue to have an ability to service their clients.”
Natalia Karayaneva, CEO of Propy, says she’s observed a noticeable impact to the industry and a trend toward online collaborative workflow or virtual closings.
“Propy’s collaborative closing platform allows buyers, agents, brokers, title companies and lenders to close entirely paperless and contactless, and securely,” says Karayaneva. “We have seen a spike of $100 million in transaction volume from Asian homebuyers investing in U.S. properties, as well as a spike of inbound requests from brokerages to use our transaction platform in addition to or in replacement of SkySlope and dotloop.”
Title and notary services have been speedbumps in many brokers’ transactions during these last few weeks, and many are turning to virtual solutions. Jeff Hall, division president of Florida Title & Guaranteed Agency recently emailed Berkshire Hathaway HomeServices Florida Realty agents, notifying them that all associates have the capability to work remote, and that the company will be providing remote notary services for those who need it, although it is subject to lender approval.
The rental segment is also experiencing changes.
Similar to residential sales, the rental industry is focusing on virtual transactions and showings.
Lindsay Dillon, vice president of Partnerships & Marketing at RoOomy, a virtual staging and 3D modeling company, says that with virtual tools, today’s renters can experience a property’s key features from afar and “shop for their future space before stepping foot on the property.”
Lou Baugier, CEO and co-founder of Vero Leasing, agrees, stating that not everything can be put on hold during this pandemic.
“There are still expiring leases and renters looking to move for a variety of reasons,” says Baugier. “That said, brokers and landlords are forced to think differently about how they connect with prospective tenants and the tools used to convert them from leads to renters.”
A program like Vero Leasing, says Baugier, can take just 30 minutes or less to apply for, sign a lease and secure an apartment, which is a shorter time frame compared to the five- to eight-day industry standard.
In terms of property management, Harmon says everything has moved online as they are closed to the public.
“Tenants who are paying rent can pay online or can use our rent drop box,” he says.
Despite the concerns and fear of the unknown, spirits remain high. Brokers shared the following thoughts:
“Be smart, use common sense and use this time to brush up on skills,” says Harmon. “Stay in touch with the people you know digitally or by phone to see how they are doing. Don’t panic.”
“There’s a lot of noise out there, so we are trying to cut through all that to provide focus and prevent inaction,” says Finn.
“The ultimate goal is to ensure that our clients do not experience a change in the level of service that we provide, while doing our part to reduce the spread of the virus,” says Dolan.
“The health of our clients, sales associates, managers, staff and community is our top priority,” says Mayi de la Vega, founder and CEO of ONE Sotheby’s International Realty in South Florida.
“We hope the steps we take now will help meet the strong demand we are still seeing,” says Scott. ” We send our prayers and love to those who have been affected by the coronavirus in our local communities and around the world.”
“We will continue to monitor the updates concerning our industry, state and local communities,” said Carrie Zeier, owner and CEO of RE/MAX Elite, based in Nashville, Tenn., in a statement to her agents. “This is not a time to panic, but a time to come together, stay informed and practice safe precautions in order to avoid business disruptions.”
As the coronavirus and its impact on the industry unfold, RISMedia is providing resources and updates. Get the latest.
Liz Dominguez is RISMedia’s senior editor. Email her your real estate news ideas at email@example.com.