Ask Brian is a weekly column by Real Estate Expert Brian Kline. If you have questions on real estate investing, DIY, home buying/selling, or other housing inquiries please email your questions to [email protected].
Question from Andrew in New Hampshire: Hi Brian. My wife and I have been planning since early January to sell our house this spring. We painted the inside this winter and installed new carpeting shortly before everything shut down. We’ve been trying to wait things out but time isn’t on our side. We want to go ahead and list the house within the next two weeks but could use a few tips about how to go about it considering the pandemic. The little that we know is that New Hampshire is allowing some real estate activity but with restrictions. We’re assuming some restrictions will remain even after the stay at home order is lifted.
Answer: Hello Andrew. COVID-19 is bringing change to both the home buying and selling experience. Along with considering what this means to you as a seller, you should consider it from the buyer’s perspective because there is substantial overlap. I believe you are correct to assume that the changes occurring now will be with us for quite a while. More changes are almost certain to happen as we continue learning more but here are some of the highlights we already know.
The market is still active but some buyers and sellers have gone into seclusion while others are working through the changes. We don’t have much data but home prices seem to be fairly steady for the spring market. But given the economic conditions, many buyers are likely to be forced out of the market and home prices could drop. Andrew, if your house is ready, you might be wise to list it sooner rather than later. This spring might be the last good opportunity before circumstances become worse. There are all kinds of numbers out there but Redfin reports that early information generally shows a 20% decline in buyers and a 60% decline in sellers early this spring. The result is that prices have not been falling. Buyers and sellers need to go into the process with an open mind and be as prepares as possible for the unexpected.
Clean the house both before and after showings. Keeping your house extra clean has always been foremost while it is listed but today keeping everything sanitary is of the utmost importance. You need to do this both for appearance and for safety. In the past, it was encouraged for the seller to be away from the house when it is shown to prospective buyers. Now, the stay at home orders makes it more likely that the seller will be home during viewings. Having hand sanitizer, masks, plastic gloves, and a polite social distancing reminder at the front door is a very good idea. It’s also a good idea to have a questionnaire about any exposure to COVID-19. But all of this comes after you have listed the house. How to choose your listing agent has also changed.
Live virtual showings are more important. Pre-recorded 3D tours have been around for years but today the strategy taking on more importance is the live virtual showing and the live virtual open house. These are real-time video viewings of the home. Pre-recorded 3D tours are still important for prospective buyers to get an initial feel for your home any time that they want. However, the change is being able to schedule an appointment for a live virtual personal showing by your agent. This is an opportunity for the agent and buyer to interact while the buyer tours your home remotely. Buyers can request close-ups and ask detailed questions of areas of special interest. Agents that have previously specialized in remote sales (such as foreign buyers or corporate relocations) are likely to have more experience with this strategy and technology. There are a few things that the agent should be comfortable with such as being able to do the tour using different apps that the buyer is most familiar with. Another desired skill is being able to visually and verbally explain what the buyer is seeing on their screen. Panning a view from a seven-foot doorway to a tall ceiling while explaining what the buyer is seeing is a good technique to emphasize high ceilings.
Live virtual open houses can be an event. This is mostly the same as the live remote tour for individual buyers except these are for a group audience. There could be separate events for other agents and prospective buyers. How your listing agent markets the event to draw the most eyeballs can be a distinguishing factor. There will be less opportunity for detailed questions so your agent needs a plan for explaining each perk and part of the property.
Creativity and out of the box marketing. When interviewing listing agents, you should have a list of interview questions asking how technology will be used. Beyond 3D and live tours, ask about other creative approaches that an agent has developed. While you should appreciate creative approaches, also scrutinize these for effectiveness. Agents can be expected to try a lot of out-of-the-box ideas but not all will bear fruit.
A virtual sales contract clause. A buyer may make a purchase offer without ever visiting your home. You’ll want to manage any potential increased liability. While buying without a personal visit isn’t new, it hasn’t been common in the past. That makes it a good idea to include language in the purchase agreement where the buyer acknowledges that the buyer (not the listing broker, agent, or seller) is responsible for personal verification, walk-throughs, and professional inspections to confirm the property condition meets expectations and is satisfactory.
Andrew, real estate sales are still happening and more changes will be coming. One thing that hasn’t changed is that spring is still the most popular season for both sellers and buyers. We’ve been in this for a few months now with innovations demonstrating that the real estate market will change to meet the challenges. The bigger unknown is what the market will be like late in the summer or fall.
We are all be in this together figuring out how the industry will evolve. Please add your suggestions and comments that will help others.
Our weekly Ask Brian column welcomes questions from readers of all experience levels with residential real estate. Please email your questions or inquiries to [email protected].