And like with all industries, there’s also a new normal when it comes to real estate.
What can homebuyers and sellers expect in the coming months? RE/MAX agents share what they’re seeing around the globe.
Increased safety measuresSafety precautions are now even more of a must to make sure each house showing or open house event is as sanitary as possible.
Wearing a face covering and using hand sanitizer gel have quickly become the norm. Sellers often have special instructions for agents, like requiring temperature checks or asking guests to wear shoe coverings inside their homes.
In many cases, there are now limits to the quantity of people allowed inside a house at one time – and it will likely stay this way to maintain social distancing.
Competition among buyers in some marketsThe current seller’s market in many parts of the U.S. has created greater competition among buyers trying to purchase homes without going over budget. The commotion is driven by change as lifestyle factors like remote learning and working from home are shifting peoples’ wants and needs in their living spaces.
Lisa Harris, an agent with RE/MAX Center in Georgia, recently sold a home that received a staggering number of offers. The house is in a desirable Atlanta suburb, but it was also priced well.
“Limited supply in Atlanta resulted in one of my listings receiving 86 offers. When we closed, and the closing attorney said that was definitely a record for the highest amount of offers he’s ever seen on one house,” Harris says.
One increasingly popular strategy used in attempts to win bidding wars is having an escalation clause. Written in the offer contract, an escalation clause increases the buyer’s offer by a certain dollar amount to ensure they aren’t outbid. In order to prevent things from getting out of hand, those who implement an escalation clause typically include a price cap to avoid spending beyond their means.
“When we’re doing [escalation clauses], I say to people, ‘If the house is, for example, $350,000, and [you] only want to go up to $360,000, and then you heard you lost the house for $362,000, will you be upset?’ The buyers usually say yes – that they would be,” says Loparo on the logic behind using escalation clauses.
However, Harris cautions that sometimes sellers are looking to conduct a more straight-forward sale.
“A buyer can also make their offer stand out by offering a higher sales price, removing appraisal contingencies, eliminating contingencies for their old property to sell, having an expedited closing, reducing the inspection periods or paying with cash," Harris says. "Today’s savvy sellers are willing to analyze all factors."
Virtual transactionsVirtual homebuying and selling practices will likely stay in place for convenience, efficiency and to provide safe alternatives for concerned homebuyers and sellers. In order to prevent unnecessary in-person meetings, buyers are beginning their home search online, touring homes via video calls and even signing digital contracts.
“I try to make sure the buyers are serious. We have many clients that are just ‘looking around for when we retire someday.’ I don’t feel it’s [the best] time for those types of buyers, especially entering occupied homes, so I have a walk-through, unbranded video for buyers to preview prior to coming to the home [for an] initial impression,” shares Sue Benson, an agent with RE/MAX Realty Team in Naples, Florida.
Now more convenient than ever, digital communication tools – like the RE/MAX Real Estate Search app and video call platforms like Zoom – allow both buyers and sellers to work alongside their agent with minimal in-person contact.
“Without a doubt, tech has been the best ally to sellers, buyers and agents. With virtual home tours in demand, our cellphones are now our best tools. This is most likely to stay for a while – or forever,” says Tonny Madrigal, an agent with RE/MAX Executive Realty in San Jose, Costa Rica.