How COVID-19 Has Changed the Homebuying Process

If you’re a real estate agent, you know that a market mired in a pandemic is like no other. JMCo partner John VanDuzer recently sat down with Lisa Fetrow, a realtor with M.M. Parris Coldwell Banker, to discuss the state of the residential real estate market. Among the areas they covered were how COVID-19 has changed the homebuying process

One of the bigger differences these days is that buyers are more serious. Either they need to buy (for example, moving to the area), or they truly want something they can’t get in their current home. “There’s not a lot of people who are out just kind of thinking, ‘Well, it’d be nice to have a new house,’ said Fetrow. “They’re serious buyers with qualification letters.”

This presents a positive for real estate agents. Unless buyers contact a lender to see what they can afford, agents can’t be sure what price range to search for them. So most realtors will ask for (or even require) a qualification letter as part of the homebuying process to make sure their efforts aren’t in vain.

In short, serious buyers save time—a good thing in a market with low inventory. They also reassure sellers who don’t want a slew of people parading through their home during a pandemic.

These buyers also hold extra weight now as lenders have become stricter with their requirements. With unemployment increasing and furloughs everywhere, it’s harder to verify income. And credit reports are taking a hit as those not working might have outstanding credit card bills. Banks and other institutions are now verifying employment and pulling credit reports closer to the closing date, even if the application is in process and these measures had already been taken.

“Anybody that was starting a new job, they needed 30 days of pay stubs to make sure that everything’s going forward and looking good. The credit reports at this point can’t be older than 60 days,” Fetrow explained. “So if you were shopping, and you’ve been shopping for a long time, the lenders are having to re-pull those to make sure that nothing has changed, you haven’t gone behind on credit cards, etc., over this time where maybe your income was hurt.”

Beyond buyer qualification, shopping itself has also changed. Technology has played a significant role in the homebuying process. For starters, nearly all listings are online. While that’s been a trend for the last two decades, the ability to browse listings remotely has become even more important these days. Today, Fetrow said 99% of home buyers are looking at homes on the internet.

In addition to services like Realtor.com, Zillow and Truilla, social media is a driving force in the sales process. Buyers are getting to know agents via these channels, establishing a personal rapport that has traditionally happened with in-person contact.

“Multiple people have connected to me for real estate through social media… it became a more real feeling, just like it would if we met (in person) and then I became your Realtor,” Fetrow said. “Now we’ve got these connections because the social media aspect has allowed for that.”

These trends have spurred innovation in the technology used on listings. Drone footage and video tours have paved the way for even more new methods of remotely viewing a home. Fetrow also mentioned Matterport tours. These are 3D virtual tours in which you can walk through rooms, measure dimensions and more—all from the comfort of the buyer’s home. These efforts help provide as much of a “being there” feel as possible.

Buyers who do visit prospective homes have seen changes as well. Agents and their clients are taking separate cars to listings, wearing masks and sometimes donning gloves as well. Some Realtors take things further by asking buyers to not touch anything in the home. The agent will open doors, turn light switches on and off, demonstrate appliances, etc. Sellers will often leave doors open and lights on so the agents can minimize physical contact.

According to Fetrow, buyers and agents alike are adjusting quickly to these no-touch measures in the homebuying process. “I think everybody, and especially the Florida Association of Realtors has been working so hard to make sure that we were continuing to be able to work through this and be one of those needed entities. We make sure we follow all of the CDC guidelines.” Fetrow also mentioned a COVID disclosure they use in which the buyer and seller affirm whether there’s been an exposure and state how it will be handled.

The goal is a buying process that helps maintain the market while keeping agents and clients as safe as possible. It’s a responsibility that Fetrow said the real estate industry takes seriously.

“I think that our industry has been on top of it in making sure that we’re able to continue to conduct business as we need to, because the reality to home buying is that it doesn’t stop,” she said. “There’s people who are still coming here for jobs and needing to have a home, and if our whole industry had shut down, thousands of closings wouldn’t have occurred that needed to—so that people had somewhere to be.”

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