As virtual homebuying and selling becomes the new normal, here’s how to do it right
nstead, the couple relied on a FaceTime tour hosted by their real estate agent. Reflecting the pandemic-era reality of homebuying and selling, the Brownes were as thorough as could be from afar — the virtual tour lasted for an hour.
“It’s definitely nerve-wracking,” Lauren Browne says of making a major purchase from hundreds of miles away.
When the Brownes got a chance to tour the property, the Asheville home was almost precisely what they expected. The musty smell in the garage wasn’t captured on FaceTime, of course, but Lauren says that mild surprise was far from a deal-breaker.
“I felt like we had already seen the house,” she says.
Just as the COVID-19 pandemic has reshaped work, school and sports, the coronavirus also has remade house hunting. Buyers increasingly are bidding on properties even though they have yet to set foot inside.
“In the past, I’ve tried to avoid doing sight-unseen offers and contracts,” says Jon Corbin, the Brownes’ Realtor and broker-owner of The Buyer’s Agent of Asheville.
After all, there’s a reason savvy listing agents bake cookies and play classical music for showings — smells and sounds affect a home’s desirability.
A new reality for the housing market
These days, however, consumers and agents don’t always have the opportunity to fully immerse their senses in properties for sale. Sellers have been reluctant to open their homes to strangers, and out-of-town buyers might not be able to navigate travel restrictions.
The intense shortage of homes for sale in many markets also plays a role. Buyers know they’re competing for homes, and if they wait for an in-person tour, the offer might arrive too late. As a result of all those forces, buyers have embraced the new reality of getting to know homes virtually.
“It’s definitely a whole new world,” Corbin says.
Now, he tells buyers to make an offer first, and take the tour later.
Here are four ways virtual buying is changing the housing market:
1. Agents play a bigger role
Corbin spent an hour giving the Brownes a FaceTime tour. When buyers can’t get inside a home themselves, that sort of hands-on service becomes more important.
Corbin says he gives buyers an unvarnished picture of the property. He had one set of clients who liked a home that faced a high-traffic street. Instead of downplaying that issue, Corbin disclosed it fully.
“I made a clear point to let them know there was a busy road,” Corbin says. “I went outside on FaceTime and let them see and hear the traffic. I make a special effort to tell them everything – good, bad and ugly.”
The buyers decided the road wasn’t a big concern, and they moved ahead with the deal.
While Realtor commissions have been on a downward trend for years, the coronavirus has given agents a new way to prove their worth.
Lauren Browne says she and her husband relied on Corbin to act as their eyes, ears and noses before they could scrutinize the properties themselves. “We did have to trust his opinion,” she says.
2. Offers, contracts come with an escape clause (as always)
For buyers, the idea of offering six figures (or even seven figures) on a property without touring it can be jarring, says John Gandolfo, a broker at Century 21 American Homes in Oceanside, New York. He reassures them that there’s some wiggle room should the house not meet their expectations.
“People say, ‘Wait, I’m buying a house without walking through?’ You’re making an offer virtually, but you will get an opportunity to physically walk through the home prior to signing a contract,” Gandolfo says. “If something doesn’t meet your expectations, you do have an opportunity to walk away.”
Contract law varies from state to state, but in general, there’s ample time for a buyer to walk away with little penalty. In North Carolina, the standard real estate contract includes a 30-day due diligence period. During that time, the buyer can back out for any reason, or for no reason.
So even if your offer on a $500,000 home is accepted, it’s still possible to ditch the deal if you realize traffic noise or barking dogs are too much for you. However, make sure you understand how long you have to back out without penalty.
Contracts often include contingencies for such issues as home inspections and mortgage approval. Keep in mind, though, that in a strong seller’s market, homeowners often favor bids with fewer escape hatches.
During the pandemic, Corbin has been adding language to his purchase contracts that allow for a physical tour. “Before you close, you want to see it in person,” he says.
While making an offer sight-unseen seems risky, real estate agents say it’s rare for deals to fall through once the buyer shows up in person. “If you do your due diligence, you have a very good idea of what the place is,” says Michael Berry, an agent at Highline Residential in New York City. “There shouldn’t be any major surprises.”
3. Agency relationships matter more than ever
Agency law is an arcane corner of real estate regulation — but in a market like this, your legal relationships with agents can be crucial. If you’re a buyer who’s dealing with a seller’s listing agent, that agent must deal with you honestly and fairly — but he or she doesn’t have a duty to disclose information that might make you less likely to buy the home.
“Naturally as a listing agent, if the dog next door barks, I’m not including that in my marketing,” says Mike Ferrante, associate broker at Century 21 Homestar in Solon, Ohio. “You have to rely on the eyes and ears and nose of your buyer’s agent.”
Getting that level of service requires a buyer to sign a buyer’s representation agreement with an agent. Sellers usually agree to pay a commission — typically 2 to 3 percent of the sale price — to a buyer’s agent.
Corbin, who specializes in that type of agency, says hiring a buyer’s agent is a wise move.
“I’m an exclusive buyer’s agent, so my fiduciary responsibility is to their best interest,” Corbin says. “I feel it’s my job to point out things they would want to know about, such as cat smells or traffic noise.”
4. Sellers still need to bring their A-game
If you’re selling, don’t think virtual tours mean you can skip cleaning, decluttering and staging. If anything, buyers are paying even more attention to online photos and marketing videos.
“From the seller’s standpoint, nothing has really changed,” Ferrante says. “They’re still decluttering. They’re still making the home look as good as they can. The actual preparations for sellers don’t change.”
Gandolfo marches into soon-to-be listed homes armed with powerful cameras. “Whether we’re shooting a still or a video, we’re using wide-angle lenses,” Gandolfo says. “Every nook and cranny is going to be seen.”
And new 3-D tours, from a company called Matterport, let buyers spend as much time as they want virtually examining listings. “There’s not a corner of your house that can’t be scrutinized by a buyer with a 3-D tour,” Ferrante says.
What you can do
How to navigate the world of virtual homebuying:
- Tap in to tech tools. Use Google Maps and Google Earth to get a feel for the neighborhood and nearby traffic patterns. If the seller has created a virtual tour or a 3-D tour, examine the photos and zoom in on areas of the home that might be problematic.
- What’s missing from videos and images? Look for potential trouble signs. Are the window shades closed to hide bad views? What parts of the house aren’t shown? Are too-small rooms pictured from perspectives that make them look bigger? Are there more pictures of the inside versus the outside, or vice versa? “If you have the right photographer — and most real estate agents have the right photographer — you can make a small place look bigger. You can make a dark place look brighter,” Berry says.
- Consider hiring a buyer’s agent. If you’re shopping from afar, it might be wise to hire a Realtor whose allegiance is to you, rather than to the seller.
- Understand contract law. If a home doesn’t meet a buyer’s expectations, the buyer usually can back out penalty-free. However, you’ll need to understand state law, and include in your offer a provision for a physical tour.
- Sellers still need to clean and declutter. New virtual tour tools let shoppers zoom in on every corner of your home.
By: Jeff Ostrowski | 9/10/2020| www.msn.com/en-us/money/realestate |