With over 310,000 confirmed cases of Coronavirus nationwide as of April 5th, the COVID-19 pandemic is no doubt turning the real estate business upside down. Different locations within the US housing market face various restrictions among the general policy of social distancing, depending on the severity of the problem there. Local authorities have imposed varying degrees of policies in order to limit the further spread of the pandemic, ranging from a complete housing market lockdown (in markets where the residential real estate industry is not considered an essential business, such as the Virginia real estate market), through some limitations on the way real estate transactions are being conducted (where residential real estate has been classified as an essential business, such as the California real estate market), to continuing business as usual (where the spread has been less invasive, such as the Nebraska real estate market). In any case, both real estate investors and real estate agents find themselves in a position where they have to adapt to the new reality forced by the Coronavirus pandemic to continue buying and selling real estate. To help investors and agents protect their real estate business during these tough times while staying healthy and safe, we’ve put together some tips on how to go about buying and selling property in the time of COVID-19. We’ve consulted with a number of real estate professionals to offer you their expertise on how to continue making money as a real estate investor or a real estate agent during a crisis.
Under the current circumstances, virtual is becoming the new reality of the real estate business. At first glance, this situation has the potential to turn into the worst nightmare of all real estate professionals. Real estate is a people’s business, where relations between agents and clients are crucially important for success. At the same time though, both real estate investors and agents are famous for their ability to adapt to the ever-changing reality of the business as this is the only way to survive and thrive in this highly competitive industry. In 2020 real estate professionals have been quick to react to the developing COVID-19 pandemic and come up with creative yet practical ways to continue buy and selling real estate. Going virtual has been one of the most popular techniques to maintain real estate transactions in this challenging reality.
The advancement of real estate technology has provided property buyers and property sellers as well as buyer’s agents and seller’s agents with a wide range of options and tools to choose from. Which option they go for depends on the policies related to residential real estate in their US housing market in addition to their tech skills.
While virtual reality has been slowly entering the real estate industry for a few years now, the Coronavirus has forced agents and investors to accept high tech as the new reality. This is particularly true for markets facing a complete lockdown where real estate is not considered an essential business. This means that open houses and even individual property showings have been put on halt indefinitely. Some of these locations include:
- Virginia real estate market: Similarly, Robyn Flint, writer and researcher for Free.Advice.com as well as a founder and owner of a real estate rehab company and a licensed realtor, highlights the fact that Virginia real estate agents have been instructed to work with clients through virtual means as much as possible. This is because realtors are not considered essential personnel, so they are restricted against open houses and showing homes under the policies of social distancing. However, Flint stays positive as “luckily the majority of our business can be done from home.” According to her, with the approaching spring selling season, it is still a good time for buying and selling real estate, with some modifications and precautions. In the local market, homes for sale priced around the average price are doing quite well, while distressed properties are not faring well right now. Flint reminds real estate investors that buying rental properties to build an investment property is still a good investment strategy at the moment as the opportunities to create passive income have not slowed down. After all, people will always need a place to live. Another advantage of buying an investment property in Virginia or any other US housing market is the historically low mortgage interest rates.
- Arizona real estate market: Another location facing a total housing market lockdown is Arizona. Jeff Fisher, a Scottsdale real estate agent, confirms that the Governor passed an executive order under which people should stay home except for essential functions, which exclude open houses and property showings. According to Fisher, “hosting virtual showings is a great alternative” for buying and selling a home under this strict lockdown.
In these markets with strong lockdowns where real estate is not considered an essential business, virtual tours have become the new reality. The good news for both investors looking to buy a rental property and listing agents is that with the recent advancement of real estate technology, making a virtual tour has become accessible even for those without a technical background. There are many applications which professionals recommend, and one of the most commonly used in the real estate industry amid the COVID-19 pandemic is Matterport.
Matterport, as described by Rob Jensen, a Las Vegas real estate broker specializing in luxury guard dated real estate, provides three different options for virtual tours when listing a home for sale or when buying a property. First, you can have a 3D doll house view of the entire home or select a particular floor. Second, the platform provides a top-down floor plan view. Third, real estate investors and home buyers can walk through the whole house and have a look at the kitchen appliances, bathroom finishes, and all other details.
Justin Paulhamus, a real estate broker and independent operator in the Washington real estate market with 4J Real Estate, highlights the importance of uploading these 3D tours into the MLS. As many companies are no longer coming to handle virtual tours, real estate agents have to come up with more creative options like using Matterport and other similar software tools for homemade videos in attempts of shoring properties.
Shawn Breyer, Owner of Atlanta House Buyers, testifies that property buyers like seeing virtual tours. Importantly, they allow buyers to filter through properties without having to spend time going to them and risking exposure, while still being able to see the property in detail before making any purchasing decision. Virtual tours are becoming the new norm even in the Atlanta real estate market, where real estate is considered an essential business.
Showing listings through virtual tours has some important benefits over FaceTiming clients. First of all, as mentioned above, a virtual tour video can be uploaded on the MLS listing of a property, on the real estate website of the agency or brokerage, or even on YouTube or social media giving access to the home for sale to hundreds of real estate investors and home buyers. That’s why this option is very time-efficient. Moreover, virtual tours are highly interactive and give property buyers the option to look into various details. From the point of view of agents, virtual tours allow them to showcase their professionalism as virtual reality is becoming the norm under the current situation. From the point of view of real estate investors, making a 3D tour of their property permits them to go for buying and selling real estate online without the help of an agent, if that’s how they prefer to conduct real estate transactions.
Actually, many real estate agents and brokers choose this option even in US housing markets which are not under complete lockdown and where real estate has been deemed the status of an essential business. These include:
- New York real estate market: Marie Bromberg, real estate agent with Compass in the NYC housing market, calls New York City “the epicenter of the epicenter” in the COVID-19 pandemic. New York is currently under an edict similar to “Shelter in Place” in other states, colloquially referred to as the “New York Pause.” Only essential businesses are allowed to continue working, albeit under restrictions. “Residential real estate agents are now considered essential businesses, but with NY having just experienced its highest death toll (as of Monday) in a single day, we need to take serious precautions if we intend to show, and most agents (including myself) are opting to stay at home.“
- Las Vegas real estate market: Rob Jensen testifies that most Las Vegas real estate agents have basically stopped doing open houses although they are allowed to continue working even amid the Coronavirus pandemic. As a result, the Las Vegas housing market has “slowed down considerably.” In his opinion, 3D showcase is one of the best ways for property sellers to sell and buyers to look at home listings. According to him, “Now is the time for property videos to really shine and show off the house a little more like a movie trailer, with music, a voice over, and also capturing movement with fire pits and waterfalls.”
- Chicago real estate market: Jake Tasharski, a Chicago real estate broker, says that real estate services are deemed essential during the Stay at Home orders in Illinois and across Chicagoland. Nevertheless, “In an effort to support safety around social distancing, most in-person showings have halted.” Tasharski highlights the fact that many real estate investors see this environment as ripe with opportunity for buying and selling real estate. All listings of his brokerage are leaning heavily on videos, photos, and floor plans in an increasingly virtual world. When needed, after a potential property buyer completes a virtual tour and requires a closer look, agents schedule private FaceTime tours.
Virtual Open Houses
The creativity of seller’s agents and property sellers has also expanded in another direction, namely conducting virtual open houses. Justin Paulhamus says that open houses are no longer an option in the Washington, DC real estate market and the Maryland real estate market. As an alternative, real estate agents schedule virtual open houses as live events on Facebook and Instagram in an attempt to continue buying and selling real estate.
Similarly, Jennifer Okhovat, a Los Angeles real estate agent with Compass, says that she is still selling properties by promoting them virtually through FaceTime and Skype tours. Although the Association of Realtors deemed real estate as an essential business in the California housing market and agents are permitted to do face-to-face showings even under the Stay at Home social distancing policy, they are not doing actual open houses on any properties.
Ashley Baskin, a licensed real estate agent serving on the advisory board of Home Life Digest, also highlights the fact that agents in the California real estate market are recommended to work with property sellers and buyers by providing virtual showings as much as possible. This makes buying and selling real estate still possible even though the velocity has drastically slowed down during the Stay at Home period.
Buying and selling real estate is not only about seeing or showing a home for sale, respectively, but also about communicating with the seller/buyer or his/her real estate agent. Needless to say, this is another aspect of the real estate transactions business which has been immensely impacted in the entire US housing market. Even in locations where real estate is considered an essential business and showings are possible, real estate agents are urged to work remotely and virtually as much as possible. After all, social distancing and Shelter in Place are prevalent policies amid the COVID-19 spread.
The multiple opportunities provided by technology have once again come to the rescue of real estate investors and agents. “There are still plenty of options when it comes to making real estate deals remotely during a crisis. In today’s technology driven market, there are a plethora of platforms which give access to all the tools and resources needed to buy and sell a variety of properties,” Sergei Belous, Co-Founder and CEO of UpFlip, says.
A lot of the necessary communication associated with buying and selling a home has been transferred to online platforms such as Zoom, Google Hangouts, Skype, FaceTime, and many others in order to halt face-to-face interactions.
Here is how Mary O’Neill, realtor with Carbutti & Co. Realtors in Connecticut, has embraced the new way of buying and selling real estate online in today’s market, where technology has been able to keep real estate alive. Technology is helping both property sellers and property buyers. After a virtual tour through FaceTime, home sellers and real estate agents use Zoom for video conferencing to meet online and review the comparative market analysis of the home for sale. Meanwhile, home buyers and real estate investors buying rental properties benefit from a 360-degree tour of listings from the comfort of their home owing to Matterport.
Get Your Property Inspected and Appraised
Open houses and property showings are by far not the only aspects of the process of buying and selling a home which have been affected by the Coronavirus pandemic across the US housing market. Home inspections and real estate appraisals have also been impacted, to say the least.
With respect to home inspections, Vee Khuu a real estate investor in the Denver housing market, a real estate coach/consultant, and a podcast host of The Real Estate Lab, offers two possible solutions. He emphasizes the fact that while a buyer can view a home virtually, he/she cannot do a physical inspection in the same way. Indeed, conducting a thorough home inspection is a must for buying positive cash flow properties with a good cash on cash return and cap rate or a top-notch home. This means that real estate inspectors are expected to wear masks though there are cases in which home sellers deny them entry. However, if an inspector is not allowed into the property for sale and the seller is not willing to extend the closing date, buyers are left with the option of asking sellers to leave a certain amount of dollars in escrow until a physical inspection of the property has been performed and defect items are taken care of.
Uriah Dortch, a professional home buyer and real estate broker in Raleigh and Durham from The Inspiring Investment, also has a recommendation when it comes to scheduling home inspections if this is still an option in the local US housing market. Namely, while working remotely as much as possible, property buyers should schedule visits and inspections on the same day, and both parties should wear gloves and other personal protective equipment (PPE). Currently agents are allowed to be buying and selling real estate in the Raleigh real estate market as an essential business but not in the Durham real estate market.
Real estate appraisers are facing major changes to the way in which they conduct business amid the COVID-19 pandemic. Jake Tasharski in Chicago states, “Coronavirus related restrictions are changing the way lenders finance and title companies facilitate closings.” He specifies that some mortgage lenders are doing exterior only or online home appraisals, and while “the new normal is not easy, the market is overall adapting where it can.”
The situation is similar in the Silicon Valley. Brad Le, realtor in San Jose with Elevate Group, says that Wells Fargo had real estate appraisals on hold for the first two weeks of the Shelter in Place policy, after which it approved drive by appraisals.
Overall, the highly competitive residential property industry has been adapting relatively well to the current situation, driven by the motivation of both investors and agents to continue buying and selling real estate, even with the Coronavirus challenge.
Figure Out Financing
Financing rental properties – or your own home – becomes even more important during a recession when economic growth is suppressed and the vulnerability of the labor market increases. However, the situation created by the COVID-10 pandemic is not all bad for real estate investors looking to buy a rental property and for home buyers. On March 15th, the Fed announced a second Fed interest rate cut within just two weeks. The 1% cut resulted in a 0% interest rate. While this does not mean 0% mortgage rates, the interest rates on mortgage loans are forecast to continue dropping in 2020.
Andrew Helling, an Omaha real estate agent and owner of REthority.com, considers that with the record low interest rates, “we are still at the front end of what would be a historic financial slowdown.” Meanwhile, real estate professionals might benefit from the fact that the industry has not faced any legal restrictions in the Nebraska real estate market yet.
This means that now is the best time to invest in real estate for buyers who expect to retain their jobs despite the Coronavirus as their mortgage payments will be small. Monthly mortgage repayments are usually the highest source of recurring expenses when owning an investment property, regardless of whether you rent it out as a traditional rental or an Airbnb income property. Lower interest rates increase the likelihood of positive cash flow income properties and enhance the rate of return on a rental property.
In terms of qualifying for a mortgage, Jennifer Hollowell, Remax realtor in the North Carolina Triad Area, reminds real estate investors interested in buying an income property at the moment that this can be done remotely. Thus, getting a loan is not an issue during the pandemic as long as the buyer has good credit to support the approval.
Sign Real Estate Contracts Electronically
In the US housing market 2020, with or without Coronavirus, real estate contracts no longer need to be signed in person. For the sake of both real estate investors and real estate agents and brokers, documents can be signed electronically with the help of real estate investment tools such as DocuSign and Dotloop. Additionally, signed documents and other contracts can be stored on Dropbox.
Buying and Selling Real Estate as an Investor – Work with an Agent
A tip on how to buy and sell properties during the COVID-10 pandemic specifically for real estate investors is to hire an agent. Working with a real estate agent holds many benefits, particularly for beginner investors. However, it is even more advantageous under the current situation when real estate transactions cannot be carried out normally. Expert agents will help investors make 3D virtual tours when listing a home for sale and share the video on their platforms such as the MLS, their brokerage website, and social media channels. Getting maximum exposure is crucial in the current US housing market where driving for dollars and looking for “For Sale” signs is not a viable option under the Shelter in Place policy. Scott Hartis, realtor in Charlotte emphasizes the importance of setting up proper seller marketing to optimize potential showings.
No doubt buying and selling real estate currently faces major restrictions in many locations across the US housing market. Nevertheless, Ryan Dosenberry, owner of Lakeshore Home Buyer, expects more property sellers to emerge with the declining economy, and many of them may look for quick and easy transactions. This should actually encourage real estate investors and home buyers to watch out for good deals in the coming weeks and months.
Jonathan Faccone, managing member and founder of Halo Homebuyers L.L.C., also considers the present to be a great time to buy an income property as more and more homeowners might consider taking an alternative approach to selling their home.
One final tip for real estate investors interested in buying and selling real estate right now as well as for agents working with investors is using Mashvisor’s real estate investment software app. Using online tools for conducting real estate market analysis and investment property analysis is the perfect solution at the time of the COVID-19 pandemic.
Here are the things which Mashvisor can do for investors:
- Neighborhood analysis: The importance of location for real estate investments has risen even further as different markets face various degrees of crisis and recession. With the help of Mashvisor’s heatmap real estate investing tool, investors can perform neighborhood analysis in any US city or town to identify the areas with the lowest property prices and the highest traditional and Airbnb rental income, cash on cash return, and Airbnb occupancy rate. Once they are ready to focus their property search on a few most suitable neighborhoods, they can have a detailed rental market analysis for each one of them. Our rental property calculator will provide reliable estimates of the median property price, the average traditional and Airbnb cash on cash return, rental income, and other key metrics for any neighborhood in the US housing market.
- Investment property search: With the tools available on the Mashvisor real estate investment app, you don’t have to even think about leaving the safety of your home to find positive cash flow properties. Real estate investors as well as agents working with investors can search for properties which match their precise expectations in terms of budget, return on investment, property size, and property characteristics.
- Rental property analysis: Mashvisor’s investment property calculator allows investors to analyze investment properties for sale quickly and efficiently. Moreover, the side by side comparison of the rental property analysis for renting out on a long term or a short term basis allows investors to determine the optimal rental strategy in their market of choice: traditional vs. Airbnb.
To start looking for an investment properties with a high rate of return in any US housing market now, sign up with a 15% discount with promo code BLOG15.
The course of the COVID-19 pandemic is unpredictable, which means that the process of buying and selling real estate might continue changing in the upcoming weeks. However, in line with industry trends which started way before the outbreak of the Coronavirus, real estate investors and real estate agents’ safest bet is switching to virtual technology and online tools for staying safe and remaining competitive.
For more information on the impact of COVID-19 on the US real estate market and how to protect your real estate business during these uncertain times, read our blogs on Coronavirus real estate trends.