Editor’s note: All of HomeLight’s coronavirus information for buyers, sellers, and agents is available on our COVID-19 hub.
Even in the midst of a pandemic, some people will still have to sell their houses — and it’s your job as their agent to help them do it.
That means getting creative at a time when much of the country is under a shelter-at-home order — and in-person showings, listing appointments, and open houses are all largely off the table for now. It means taking extra precautions and changing up protocol around property inspections and appraisals. It also means settling on the right listing price for a home in a volatile market, with many unknowns as to both the trajectory of the coronavirus and its economic impact. And it means taking responsibility for public health into your own hands and doing the best you can to “flatten the curve.”
The National Association of Realtors (NAR) provides guidance to help address some of the common issues related to real estate transactions at this time. It’s being continually updated based on recommendations from the WHO (World Health Organization), the CDC (Centers for Disease Control), and the White House. NAR has also prepared a Sample Preparedness Plan for handling exposure risk on the job — what you are legally allowed to do in your state, county, or municipality will vary, as different areas have different rules around staying at home, sheltering in place, and whether or not real estate is considered an essential service.
Beyond that big-picture view, you’re going to need real-world tools and tactics you may have never used before in the midst of unprecedented circumstances. So what exactly will you need to list and sell a house during coronavirus? We talked to experts and consulted official guidance to bring you this primer.
Pricing the listing
At this time, you and your sellers should be considering your approach to pricing carefully. As the economy grinds to a halt and the stock markets continue to ping-pong, we don’t know exactly where the housing market will land. But it appears the country is heading toward recession, and that could certainly affect the housing market, especially with increased numbers of would-be buyers who suddenly find themselves in precarious financial positions.
Still, there will be buyers who simply have to take the plunge right now, just like there are sellers who have no other choice but to list their home at a less-than-optimal time. Your first job is to find the price that will attract as many of those qualified buyers as you possibly can for your listing. But how low should you go in this market?
The real estate site Curbed called coronavirus “the wild card in the housing market,” and noted that it could put a damper on demand. However, it noted: “Still, don’t expect home prices to drop. It would likely just slow down the pace at which they are rising.”
The experts we talked to agreed. Eric Schuell, a top-selling agent based in Connecticut, doesn’t anticipate seeing prices bottom out — far from it.
“We still have an element of supply and demand, which means there are not enough listings — period,” he says. “Buyers have diminished off the board as well, but I also think that with this supply and demand, the prices are going to stay the same because there are still people who have to buy a house.”
He cited one client who went under contract four weeks ago on the sale of their home and paid full price on a new home. “We didn’t know this was coming, so they had to buy,” Schuell notes.
In his own experience, David Aurigemma, another top-selling Connecticut-based agent, sees significant reason for pricing optimism, explaining the market is “just that much more fierce.”
“The inventory was already so low, and now it’s even less than what it was three weeks ago. Your home will sell. People are looking,” Aurigemma says.
“I think that the crisis just makes the inventory more limited, and people are willing to pay exactly what a home is being offered for.”
He’s noted no dropoff in the last two weeks during the pandemic, and notes that some sellers removing their homes from the market puts the remaining ones in better position for a premium-price sale. “Some are putting themselves on pause a little, so it gives remaining sellers a great position to get most of their asking price, if not more.”
Andrew Helling, editor of the real estate site REthority.com, also points to limited supply. “The reason why housing prices have skyrocketed the past few years is because the population is growing quicker than the amount of houses being built,” he says. “While the strong economy has added confidence to someone who would otherwise be on the fence, the main driver behind the increase in prices is the lack of supply. A recession as a result of the coronavirus will limit supply even further.”
In terms of hard data, the California Association of Realtors reported in a flash poll conducted between March 14 and 16 that more than half (54%) of Realtors had clients who backed out from buying a home because of coronavirus, and less than one-half (45%) had clients who backed out of selling a property. HomeLight’s own flash poll conducted March 13 through 17 showed that 41% of agents had seen seller activity slow down, and 45% had seen buyer activity slow down, since the advent of the virus.
We may be in the midst of uncharted territory without firm answers, but when this crisis is over — and it will be — Schuell expects it to be a major boon for the housing market.
“Some sellers just don’t want to be a part of it [right now]. They don’t want people coming, they don’t want people going, and they don’t even want me at the house — and we have to respect that,” he says.
“All I can say is we’re going to have one hell of a summer when this is all over — the people in the pipeline who want to sell but are holding off right now… It’s going to be a really great summer coming up. I am 100% confident in that.”
Marketing the listing
Leveraging your network to find qualified buyers who are in a similar situation as your sellers — in that they need to move now, and don’t have the option to wait — will be one of the best ways you can prove your worth as an agent right now, and could save everyone time and stress. So make sure that first and foremost, you’re marketing your listing to the buyer’s agents you know, and providing them with all of the virtual tools they’ll need to familiarize themselves with the listing and share it with their buyers.
At a time of widespread shelter-in-place orders around the country, open houses are probably out as a way of marketing the listing (unless they’re virtual ones), and home tours might almost feel like a distant memory already to some agents.
These days, you’re smart to double down on virtual and digital offerings. Videos and photos are going to be more important than ever, so make sure they shine.
“I think video is even more important than photos right now — video is going to really play a huge part in this new market,” Schuell suggests. He also noted he’s done FaceTime showings since the pandemic broke out. Agents in other markets have offered Zoom open houses, walking attendees through the house and answering questions live, and there are plenty of opportunities to schedule “tours” like this using social media platforms as Schuell has done.
To minimize face-to-face meetings — or manage when they are not possible at all — provide more information upfront than you normally would. Consider disclosing details on systems, warranties, materials, and other data that can be collected in a digital file and distributed to interested buyers. You might also include receipts or permits for any work done on the home and any other details buyers usually want. Not only will this upfront extra step save in-person back-and-forth, but it will save time as well — and that could be of the essence when you’re looking for a quick sale in a chaotic economy.
If you are offering home tours — ideally only in vacant properties, to well-qualified buyers who are not feeling ill — make hand sanitizer available at the door, provide tissues, make sure there is soap at all the sinks, disinfect surfaces with Lysol afterward, and take every CDC-recommended precaution. Some states are allowing agents to show homes to only one buyer at a time, which means that one half of a couple must wait in the car. Remember, whatever you can do to keep the house safe and clean is both your professional responsibility, and now also your social obligation.
“With vacant properties, I put a sign on the door saying there’s soap and there’s paper towels inside and to use them,” Schuell says. “We want you to wash your hands before and when you go in and then upon leaving when you go in. And if you’re not feeling well, don’t enter the residence.”
As a workaround at a time when inspections can be tough to come by — and absolutely impossible in states where real estate is currently considered non-essential — consider getting a pre-listing inspection if that’s an option where you do business.
“The seller can get the inspection done before even listing and use that to help market the house,” suggests Mike Marlow of Veteran Home Inspections. If that’s still available to you in your market, or real estate is considered an essential business, consider urging your sellers to order a pre-listing inspection.
Whether you do a pre-listing or a buyer’s inspection during closing, here are some best practices to follow:
- The inspector should walk through the house alone, unaccompanied by the buyer, seller, or either agent.
- Inspectors should wear protective health equipment (gloves and a mask at minimum) to protect both themselves and the sellers.
- More than ever, it’s important for sellers to ensure that inspectors have access to all required areas of the house in order to minimize any need for the inspector to touch surfaces in the home.
- After the inspection, the house should be thoroughly cleaned, especially any surfaces the inspector had to touch.
Importantly, there is some flexibility now around appraisals, and you’re going to want to share this with the buyer’s agent — because it’s potentially a huge boon: On March 23, the Federal Housing Finance Agency directed Fannie Mae and Freddie Mac “to provide alternative flexibilities to satisfy appraisal requirements and employment verification requirements through May 17, 2020.”
In short, to help alleviate some of the closing burdens caused by coronavirus, Fannie and Freddie will allow mortgage loans to go through with “appraisal alternatives” in order to “reduce the need for appraisers to inspect the interior of a home for eligible mortgages.”
In addition, if lenders cannot obtain verbal verification of the borrower’s employment before loan closing, lenders can instead get verification via an email from the employer, a recent year-to-date pay stub from the borrower, or a bank statement showing a recent payroll deposit.
The closing table
To help slow the spread of coronavirus, you should not be interacting with clients in any way right now face-to-face. Depending on your state or region’s shelter-in-place mandates and current ability to provide e-notarization services, you will need to leverage technology to different degrees in order to get listings across the finish line, and you might have to get creative. (For example, in a recent episode of HomeLight’s podcast for real estate agents, The Walkthrough, one agent described handing closing documents through a window to protect a medically-compromised household member.)
However, if you are still interacting face-to-face with clients, you may assess potential health risks by asking about their possible exposure — but avoid possible Fair Housing violations by asking all clients the same screening questions.
In general, as NAR advises, “Brokers should use their best judgment when formulating a plan.”
Note that your “seller does have to disclose to potential buyers someone in the household has tested positive for COVID-19, through the seller’s disclosure notice pertaining to anything on the property that could materially affect the health or safety of an individual,” according to the Texas Realtors guidance.
Seller’s disclosures vary state-by-state (and some states are caveat emptor), and this is brand-new legal territory; Look to your broker or local Realtor association for region-specific advice on how to handle a seller who tests positive for coronavirus before closing.
(Note, too, that the buyer could request a deep-cleaning, and if the seller will not agree to pay for it, the buyer can delay moving into the property to allow time for the risk of exposure to recede.)
After the sale
Of course, to best serve your clients, you’re also going to need to make sure they have somewhere to move to if their house successfully sells in this pandemic — and that means forecasting the challenges of related logistics at this time. A coronavirus addendum can protect not only buyers, but also sellers who might require some flexibility in the closing timeline in order to deal with moving snags, so talk to your sellers about adding one onto the purchase agreement.
Consider that it might not be possible or feasible to hire movers, for example, so that’s something they’ll need to plan for themselves; Coordinate the logistics with them as best you can to smooth out the home-selling process at such a chaotic time in the world. Even if real estate services are considered essential in your area, moving services might not be.
And it’s a good practice to make every effort to be a soothing presence in general — while keeping yourself and your clients safe — amid the worldwide crisis. Most agents are used to acting as partial therapists to their clients; This ability is going to become more critical than ever for clients who have to uproot their lives and finish a home sale during one of the most precarious times in any of our lives.
Header Image Source: (Markus Spiske / Pexels)