Housing Market Shifts To The Cyber Side Amid The Pandemic

Article by the Washington Post

Jennifer and Justin Lerma, Alexandria residents for five years, had been searching for a house in that community for themselves and their three dogs for about six weeks when the coronavirus pandemic hit the Washington region.

Their determination to move by this summer — and stay safe — led them to make an offer on a property without setting foot inside.

“Justin found a ‘Coming Soon’ listing on a Thursday evening and when I checked it out online, I couldn’t sleep all night,” says Jennifer Lerma. “First thing in the morning, we saw that the listing was live, so we drove by to see the outside and check out the yard, which is our priority because of the dogs. I had our agent [Steve Gaich with Compass] do a tour with me over Facetime and then Justin talked to him on the phone and we made an offer.”

The Lermas, both 32-year-old first-time buyers, had their full-price offer of $617,000 accepted that evening.

“Technology allows us to do things that were unthinkable even just a few years ago,” says Keith Gumbinger, vice president of HSH.com, a consumer mortgage information site. “Digital mortgage platforms can remotely verify employment and assets and the ability to communicate electronically means we can function. A decade ago, the housing market would have been completely shut down during a situation like this.”

Michael Hernandez, a software engineer and first-time home buyer from Arlington, Va., purchased a home sight unseen with the help of Redfin real estate brokerage agent Carly Guirola during the coronavirus outbreak.

“I’d been looking for several months and lost some bidding wars to other buyers,” says Hernandez. “Because I narrowed the area to Hyattsville near Metro and the Arts District, I knew the area pretty well and had looked at several houses that were similar to the one I bought.”

Hernandez toured the home via video chat with another Redfin agent.

“I was a little concerned that the ceilings would be too low on the upper and lower levels, so I had her reach up to show me the ceiling height during the call,” says Hernandez.

Hernandez’s $430,000 offer was $5,000 above the list price, which he says was a “little less aggressive” than his previous offers because of the pandemic. He was able to see the house inside after the offer was accepted.

Most contracts today include a coronavirus addendum that allows for greater flexibility in the timeline between the offer being accepted and the closing, particularly because of potential issues with inspections, appraisals and closings.

“The addendum says that if someone involved in the process is quarantined or ill or an office is closed or other issue, there’s an automatic extension on the closing,” says Steve Dean, a real estate agent with Compass real estate brokerage in Washington.

Buyers can also make their offer contingent on seeing the property in person to confirm that it has been accurately represented in virtual tours and photos, says Kathy Chovnick, a sales manager with Long & Foster Real Estate in Middleburg and Purcellville, both in Virginia. Sellers have the right to negotiate on that point.

Virtual property showings

Every real estate agent and brokerage is focused on upgrading their technology to provide 3-D tours, video tours, robust photos and live-chat tours that enable buyers to see properties virtually.

“We had professional photos of my listing in Brambleton that went on the market in late February, but we didn’t think we’d need a virtual tour,” says Chovnick. “The sellers suggested that they film a video tour and we promoted it with Facebook, Instagram and YouTube and got more than 50 views after open houses were banned.”

The seller, Brad Gogot, used his GoPro camera to shoot his four-level townhouse and edited it with music. After seeing the video, the buyers requested an in-person visit and made an offer.

“We left the house and disinfected everything before and after with bleach,” says Gogot, who planned to take the house off the market if they hadn’t received an offer after the video aired.

If you must do a live video chat with the homeowners or the listing agent, says Guirola, you should ask them to show you the furnace, water heater and the ceilings.

“You want to see lots of angles and not let them skip any rooms or corners,” she says. “The home inspection is always important, but I stress it even more as a safeguard for buyers who are purchasing based on virtual visits.”

“It’s hard to see everything from photos, so I asked my agent to open the cabinets in the kitchen and the pantry,” says Hernandez. “The video chat was at night, which was good because I could see how much lighting there was. I think the video tour is a good way to see if the house matches the photos and to ask to see everything, not just the good parts of the house.”

Guirola and Hernandez looked at the property disclosure before the video tour and created a checklist of questions to address. Guirola recommends taking notes during the video tour to follow up on by looking at photos, recorded videos and asking the listing agent.

“It’s really important to have your own agent rather than the homeowner or the listing agent show you around,” says Hernandez.

Like the Lermas, Hernandez had already toured properties with his agent so he felt comfortable that the agent would focus on his priorities.