Columnist Bernice Ross reached out to the Inman Coast to Coast Facebook group this week to find out how agents are pivoting to cope with today's COVID-19 market. Here are some workarounds for the issues agents are facing in the field
BY BERNICE ROSS
The real estate industry has weathered almost every type of disaster imaginable and has worked through it. That’s exactly what seems to be happening right now with the COVID-19 pandemic.
I asked the Inman Coast to Coast Facebook group about what problems they’re facing and how they’re pivoting to cope with today’s COVID-19 market. Here are the issues that the community responded with, plus a few strategies to consider.
1. Slowed-down leads
“Showings are slow. Zillow leads have slowed down significantly as have leads into our website. We have pumped up the marketing efforts online to counteract this (as others are cutting, we are increasing).” – Erica Ramus of Pottsville, Pennsylvania.
“My agents (who are in multiple states) report a slow down but not a stall. Increasing hesitancy by some buyers who were actively looking and now pulling back. A few transactions have canceled (i.e., more than normal), mostly due to stock and energy investment drops.
“Our website has 3 to 4 million visitors a year, and that traffic volume has dropped, starting most notably last Thursday. However, there are still many visitors shopping, and the ‘quality’ of those visits (by metrics we study) remains about the same, meaning few people looking but those looking are showing same patterns.” – Glenn S. Phillips of Hoover, Alabama.
Slowing markets represent an opportunity to increase market share, but not by doing self- promotion. Instead, stay focused on how you can best help your community.
For example, use Zoom.us, Facebook Live, or YouTube Live to highlight businesses and volunteers who are going the extra mile during this crisis.
Interview a talented teacher about how parents can help their children have more fun while learning at home. Contact the owner of a local gym for some workout routines people can do from home.
2. Closing problems
“Had two closings that were supposed to happen this week postponed indefinitely due to the buyer being quarantined. (Same buyer for both properties).” – Manny Menezes of Seehonk, Massachusetts.
Ask for an extension on the transaction close date. Moreover, to minimize closing problems, have your buyers and sellers sign a power of attorney in case they are ill or quarantined.
3. Delays, price reductions and cancellations
“The impact is already being seen in the real estate industry, according to a report by real estate marketplace Point2Homes, which noted that interest in buying a home has taken a nosedive.
“The firm said that, from Mar. 9 to Mar. 16, Google traffic saw a 35 percent decrease in home searches. Over 350 homes withdrew or canceled from MLS across Massachusetts in the past four days alone.” – Bill Wendel of Cambridge, Massachusetts.
Wendel goes on to mention that one in four properties had already reduced their price. One out of 20 had reduced their price by 10 percent or more, and one out of 12 were listed for less than the assessed value.
Use this type of data to illustrate why sellers need to be realistic about their asking prices. If you haven’t done so already, it’s time to dust off those old price reduction scripts.
4. Down payment issues
“Buyers today told me their 20 percent down is now about 6 percent, and the lender can’t qualify them there for a sale in process.” – Lisa Sevajian of Andover, Massachusetts.
Many buyers believe that they must have a 20 percent down payment. Educate them about how low down payment loans work and have a lender determine if they qualify.
According to Down Payment Resource, 84 percent of the homes are eligible for down payment assistance. Given that DPR’s average amount of down payment assistance is $13,000, this can go a long way in bridging their down payment gap.
If sellers have the cash or equity, they may be willing to carry a second mortgage to cover the difference.
5. Difficulty conducting in-person appraisals
“Photo shoots getting delayed, condo associations denying access, but agents getting creative and preparing for changes.” – Ines Hegedus-Garcia of Miami, Florida.
“Some businesses are ‘essential’ and are open, such as grocery stores, pharmacies, and banks. Real estate agents and appraisers and inspectors are deemed ‘non essential’ and must shelter in place.” – Mary Pope-Handy of Los Gatos, California.
On Monday, March 23, FHA, Fannie Mae, and Freddie Mac eased their appraisal requirements for interior inspections on certain “eligible” mortgages. This means that they will be able to drive by only and/or conduct “desk appraisals” without entering the property.
6. A tale of two markets
“We have a ‘tale of two markets,’ sometimes in the same neighborhoods. Different buyers, at different stages in their lives, are handling this and reacting differently. Some segments are a ghost town. Some are insanely busy. Some sellers won’t list. Some are scrambling to list now.” – Brandon Kekich of Northville, Michigan.
As Kekich himself wrote: Over communicate. Over counsel. Ask more and more about them. They’re all stressed whether they say so or not. The cream of the crop, those who care for their people, will rise during this time.
7. Shelter-in-place orders affecting inspections
“My Monday closing has not been recorded yet. A cash purchase is being delayed potentially 30? 45 days? Due to no smoke detector inspections being done.” – Lisa Sevajian of Andover, Massachusetts.
See if you can take a snapshot with your phone of someone installing the smoke detectors. Or better yet, you can also do a video of the install. Both of these will include a timestamp and date. You can send that to the appraiser, bank or mortgage broker, and see if that might work.
8. Shifting gears on open house
“No open houses. We are showing still.” – Erica Ramus of Pottsville, Pennsylvania.
“Buyers still active but also cautious. No longer doing open houses.” – Erica Collica of Detroit, Michigan.
“… So, until at least April 8, it’s no in person appointments, no open houses.” – Mary Pope-Handy of Los Gatos, California.
In some areas, regular open houses are alive and well. Florida-based Jim Weix, for example, found 126 open houses on his MLS, scheduled for last Sunday. Other open houses come with the caveat of being “by appointment only.”
Agents who can’t hold an open house are going digital. Pasadena-based Kendyl Young is holding “No contact open houses” by using her phone to stream walk-through showings to buyers. Tara Siegel, who works in Northern Pennsylvania is conducting “on demand” showings using virtual tours.
We’ll get through this
Mary Pope-Handy explains how she is approaching the current COVID-19 pandemic:
“Even though there may be more disruptions over the next year until we create new antivirals and create a vaccine, we will do our best to help our clients.
“I’ve been talking with my clients and preparing listings to go on the market as soon as it is possible to safely move about in public again. I’m feeling optimistic that we will get through this just like we got through the Great Recession, 9/11, the Dot-com bust, and the Loma Prieta Earthquake.”
Bernice Ross, President and CEO of BrokerageUP and RealEstateCoach.com, is a national speaker, author and trainer with over 1,000 published articles. Learn about her broker/manager training programs designed for women, by women, at BrokerageUp.com and her new agent sales training at RealEstateCoach.com/newagent.