Everyone morning when we wake up, we have to wonder, “when will this all end?” But in fact, that’s the wrong question. The coronavirus will not just end on a specific date. The question should be: “How should we adapt and change to deal with this virus, and the next virus that comes our way, so we can continue?” It is very unlikely that everything will return to the exact same way as is it was before. Safeguards will in place into the distant future for the real estate industry, business and life in general.
The coronavirus has wreaked havoc on our economy and the death toll is heartbreaking, so it’s hard to see the good. But looking at the bright side of things, it’s good this crisis didn’t happen 40 years ago when I started my career. If it had taken place then, the coronavirus may not have been identified until it was even more widespread. Moreover, from a real estate point of view, there were no virtual tours of homes, no digital contracts and no electronic closings. The transformation of the real estate industry in the last four decades has helped us weather this difficult time. Today with coronavirus, change has accelerated very rapidly. In fact, many of those adaptations will likely become a permanent part of the real estate industry. However, while all updates might prove to be superb tools, nothing will replace personal visits between home buyers and their potential home.
Forty years ago, Multiple Listing Service (MLS) books had just come on the scene. Prior to that, Realtors® would gather in meetings where each person would bring a three-ring binder of listings. Someone would stand up front and announce which listings had sold. New listing sheets would be distributed for new homes coming on the market. The MLS book was an incredible upgrade and was so convenient, at the time. A book, published weekly, of all the homes available was compiled in a single publication. Now in our “real time” world, the printed book seems so archaic. Back then, potential buyers could only see one exterior photo of the home to determine if they wanted to view it in person. Now with the MLS online, every listing has about 40 pictures, plus virtual tours, street views, mapping technology with satellite imagery, Walk Scores, and much more. All of that adds up to pretty much everything you need to know to make a home purchase decision without even going to see it in person. This week, coronavirus safe practices allow you to make an offer on a home without a personal visit. If the home seller accepts the offer, then a personal inspection – replete with safety procedures – will allow for a visit and inspection.
Earnest money and contracts with original signatures used to be written in person and hand delivered. Now earnest money can be wired directly, and contracts delivered and signed electronically. Initially, the danger of electronic delivery of contracts was that the buyer and seller would not review them in as much detail as they should have and would just click to sign. Technology has evolved, however, and Realtors can join their clients to meet and virtually review the contract by using platforms and apps such as Zoom and others.
Forty years ago, mortgage loan applications were done in person. Then, once the application was completed and verified, lenders would meet with buyers for a final loan application sign off. I even remember in-person credit report interviews. There was no such thing as an automated credit score app. Nowadays, a buyer can fill out an entire application online, and almost all their verifications are determined electronically, eliminating the need for face-to-face, virus-spreading meetings.
Closings have also evolved quickly in the past few weeks, too. Closings in the past usually had to be “wet,” in other words, buyer and seller had to be present to sign in person with “wet” ink. During the coronavirus crisis, Governor Polis declared that in-person notarization of documents would not be required. This was one of the last hurdles for a closing to be completed 100 percent electronically. Technology has quickly caught up to safeguard the notarization process and odds are pretty good that these protections against fraud will continue to improve.
As an essential business, real estate has been continuing along, albeit at a slower pace than before. People need a place to sleep regardless of what is happening in the world. Babies are still born; marriages and divorces happen; people need to downsize; people need to move to change jobs; people need to sell their homes to raise cash in order move on to another chapter of their lives – or maybe just to have money to buy food.
When restrictions are lifted, real estate will lead the way towards an economic recovery. Every time a house sells, a whole string of economic events take place. For example, after buyers close on their home, they purchase consumer goods like furniture to fill it. When a seller closes, they usually have money to buy another home and buy other consumer goods. In the process of the transaction, a lot of people earn money and then go spend it. Also involved in the real estate sector are construction trades (roofers, concrete workers, plumbers and electricians), service trades (house cleaners, window washers, landscapers and handypersons), professional services, (Realtors, mortgage lenders, appraisers, inspectors, title companies and attorneys). The list goes on and on as it sends a wave of economic stimulation through the economy.
Remember, coronavirus restrictions can change daily so consult your Realtor for updates on current procedures for homebuying and selling.
By Duane Duggan. Duane has been a Realtor for RE/MAX of Boulder since 1982. Living the life of a Realtor and being immersed in real estate led to the inception of his book, Realtor for Life. For questions, e-mail DuaneDuggan@boulderco.com, call 303.441.5611 or visit boulderco.com.