{"id":404,"date":"2020-04-29T17:43:00","date_gmt":"2020-04-29T17:43:00","guid":{"rendered":"https:\/\/www.realtrends.com\/blog\/2020\/04\/29\/how-agents-are-adapting-to-covid-19s-impact-on-real-estate\/"},"modified":"2025-03-13T02:02:14","modified_gmt":"2025-03-13T02:02:14","slug":"how-agents-are-adapting-to-covid-19s-impact-on-real-estate","status":"publish","type":"post","link":"https:\/\/www.realtrends.com\/blog\/2020\/04\/29\/how-agents-are-adapting-to-covid-19s-impact-on-real-estate\/","title":{"rendered":"How Agents Are Adapting to COVID-19\u2019s Impact on Real Estate"},"content":{"rendered":"

The COVID-19 pandemic has brought the real estate industry to a near-halt, and what at first seemed like a temporary stoppage is starting to look like the new normal for at least the next year. And the new normal feels pretty strange: no more open houses, showings over Zoom, drive-up closings. <\/span> <\/span><\/p>\n

<\/p>\n

Here\u2019s the good news: most economists will tell you that real estate doesn\u2019t decline too much in a recession<\/a>. Housing, after all, is a necessary good. People will keep buying and selling houses; it\u2019s up to agents to figure out how to adapt to these new circumstances so they can flourish. <\/span><\/p>\n

Here are just a few ways that the industry is going to change going forward, followed by a quick look at where the market might be headed.<\/span><\/p>\n

Remote Showings Are Here to Stay\u2014 and That\u2019s Okay<\/span><\/h2>\n

The idea of selling someone a home without them ever seeing it in person may seem strange, but it\u2019s been happening for years; it\u2019s long been routine for foreign buyers to buy luxury properties, sight unseen, after remote viewings. According to Redfin data<\/a> from 2018, 1 in 5 buyers made offers without ever seeing the property in person; in 2017, an even more impressive 35% of buyers did. That percentage will undoubtedly go back up.<\/span><\/p>\n

Agents today will want to lean into live streaming open houses, 3D tours, and maybe even virtual reality tours. Let\u2019s quickly touch on each one, and discuss how to maximize their appeal.<\/span><\/p>\n

Open Houses in the Quarantine Era<\/span><\/h3>\n

There are two ways to do a virtual open house: live, or static. The first option will use platforms like Zoom, Google Hangouts, Facebook Live, or Instagram Live. If you\u2019re doing a live open house, you should be comfortable in front of the camera, and experienced interacting with viewers. You\u2019ll essentially be performing, and without the cues and responses you\u2019d get from an in-person buyer, you\u2019ll need to have the composure and confidence to conduct yourself independently. <\/span><\/p>\n

Experts suggest doing a practice run first, so you\u2019re comfortable with the technology, and can iron out your talking points. Don\u2019t forget to hold your phone horizontally, for a wider view, and make sure you switch between the front-facing and rear-facing cameras, depending on whether you\u2019re addressing the audience or showing features of the home.<\/span> <\/span><\/p>\n

If you opt for a static virtual open house, the process is a little simpler. All you have to do is film a video tour of the property, and make it available along with the listing. <\/span> <\/span><\/p>\n

Just remember that a virtual open house should be held to the same standards as a real life one. Make sure the home is impeccably staged, and film during hours when the property is getting the most natural light. And as with photos, a professional videographer\u2014 especially one who specializes in real estate\u2014 can make a huge difference in the quality of your presentation. Not only will they ensure that the video is professionally shot, they can edit and enhance the video in post-production. <\/span> <\/span><\/p>\n

Videographers aren\u2019t cheap, though, so consult with your seller before you go out and hire one.<\/span><\/p>\n

Embracing 3D Tours<\/span><\/h3>\n

You know how you can go on Google Maps and look 360 degrees around a neighborhood? A 3D tour is just like that, only you\u2019ll be looking at the inside of the home.<\/span><\/p>\n

Making a 3D tour isn\u2019t actually as complicated as it might seem; Zillow has a free app<\/a> you can use to make your tour, and many videographers have the experience and equipment to make one. Not that a 3D tour requires any specialized equipment\u2014 you can make a great one with nothing more than an iPhone, though you might want to use a tripod with a phone mount to make sure the video looks smooth. <\/span><\/p>\n

 <\/span>A 3D tour will give prospective buyers an immersive, substantial sense of the property, second only to an in-person tour; just remember to follow the rules of a normal showing. Stage the home beforehand, use good lighting, and show every area of the house; not just the main areas of interest. <\/span><\/p>\n

The Future for Agents<\/span><\/h2>\n

In the near term, the market\u2019s headed for at least a mild downturn. According to a recent survey by Clever Real Estate<\/a>, both buyers and sellers are pulling back from the market. 55% of homeowners who planned to sell in the next year either pulled their listing off the market, or are delaying their listing indefinitely, while 80% of prospective buyers are delaying their home search, or are only looking for steep bargains. <\/span> <\/span><\/p>\n

If Americans continue being hit in the wallet by the pandemic, it\u2019s reasonable to assume that we\u2019ll see a boom in discount agents and services<\/a>, as sellers look to save every penny possible. Agents who make the shift early to a discount model will have a big advantage as the market reawakens. It might also be a good business move for agents who specialize in selling to consider working more on the buy side, too.<\/span><\/p>\n

If the market does flatten, agents should be prepared to argue against two main options for sellers: FSBO, and the \u201cwe buy houses for cash\u201d buyers. The latter group will prey on fearful or anxious homeowners to pay rock-bottom prices for homes; be prepared to make a simple but firm argument to these sellers that a conventional sale is always more lucrative, even if they have to perform home repairs first. <\/span><\/p>\n

And when it comes to FSBO, there\u2019s often a surge in solo home sellers when money is scarce; these sellers think they\u2019re saving 6% on their sale, when in fact, they\u2019re leaving far more money on the table<\/a>. <\/span><\/p>\n

As recently as 2018, the National Association for Realtors found<\/a> that while the median sale price for FSBO listings was $190,000, the median sale price for agent-assisted sales was $250,000. Even after paying a 6% commission of $15,000, the home that sold with an agent brought in $45,000 more than the one that was sold by the owner. <\/span><\/p>\n

Use these powerful statistics to steer your clients away from selling FSBO. <\/span><\/p>\n

Where\u2019s the Market Going?<\/span><\/h2>\n

So what\u2019s happening to the real estate market right now? It\u2019s not exactly down; it\u2019s more that it\u2019s in a holding pattern. In New York City, the epicenter of the U.S. pandemic, the market basically closed down overnight. The week that the city mandated closures, almost 450 listings were pulled from the market. Contract signings declined by almost 50%, and the number of live listings was down 79%. Those listings will presumably come back when the uncertainty surrounding the future goes away\u2014 but not before.<\/span><\/p>\n

One big picture shift that\u2019s already happening is that interest is going up in rural markets. Data from Redfin<\/a> found that in late March, average online views of homes in rural areas had increased by a staggering 115% compared to the previous year, and by 88% in small towns. At the same time, views of properties in cities with populations over 1 million had slid by 10%. <\/span><\/p>\n

This would represent a massive reordering of the real estate market. The U.S. has been trending towards dense urbanity for years now, with the population becoming 5% more concentrated in major cities each decade; by 2010, 80% of the population<\/a> lived in urban areas. If this trend reverses because of the pandemic, that\u2019s a lot of potential commissions that would move from the cities to the rest of the country.<\/span><\/p>\n

Of course, the question is if this shift is going to be cyclical or fundamental. In other words, will people move back to cities after the pandemic is over, or will they remain dispersed? A lot of that will depend on how long the pandemic drags on, and how bad it is. If it\u2019s over by the end of 2020 with relatively few deaths, all the people that fled New York and other cities will most likely return. If it goes on for a year or longer, we could see a more permanent change in behavior.<\/span> <\/span><\/p>\n

Right now, industry analysts are settling on a middle ground\u2014 adopting a wait-and-see attitude in urban areas, but banking on increased interest for second vacation homes<\/a> in remote locations (although buyers looking to buy a rental or second home should crunch the numbers<\/a> to ensure they aren\u2019t stretching themselves thin).<\/span><\/p>\n

It\u2019s a strange time for the real estate industry, but agents can flourish if they adapt to the times. So brush up on your Zoom etiquette, grab your 3D camera, and get out there. Change can be great\u2014 if you embrace it.<\/span><\/p>\n

Author bio:<\/strong> Luke Babich is the CSO of Clever Real Estate, the online referral service that connects home buyers and sellers with top-rated agents. Luke is a real estate investor in St. Louis, MO with over 24 units who specializes in multifamily units. His first investment was a house hack with Clever’s cofounder, Ben Mizes. <\/i> <\/span><\/p>\n

 <\/span><\/p>\n

 <\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

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