In challenging times, it’s a smart idea to revisit the fundamentals of good business. This spring, go Back to Basics with Inman.
It is no secret that the COVID-19 pandemic has fundamentally altered the way we will live going forward. In addition to the varying aspects of social distancing, masks and other precautions that will continue for the foreseeable future, I believe we will also see significant changes in the way homes are bought and sold.
In this new reality, we’re going to see two fundamental groups of sellers emerge — those who understand the new realities and move to get in front of the morphing market and those who, entrenched in the past, will try to keep doing business as usual.
Overall, the professional real estate community is moving quickly to accommodate the new reality. Many real estate agents already have the tools to hold virtual listing appointments and host visitor-free online open houses. Title companies have been doing remote signings only and are evaluating continuing this practice going forward. Some brokerages are reexamining the need for brick-and-mortar offices. It’s a strange new world.
In addition to adapting to new methodologies, we must also factor in COVID-19’s effect on our nation’s economy. Unemployment numbers have reached staggering levels and will dramatically lessen the number of qualified homebuyers.
Further limiting the buyer pool are those who, while still employed, have lost their down payments due to the recent stock market plunge. Of the remaining buyers, a significant number have concluded that “the sky is falling” and, while trolling for bargains, have been lobbing in lowball offers like a pitching machine. Adding to the uncertainty are transactions that were cancelled (some on the day they were set to close) for economic reasons.
With these metrics in place, we believe it’s safe to say that the short-term effect will be a moderate reduction in overall home prices lasting through the third quarter.
With open houses banned in many areas across the country, we are faced with continuing restrictions on the ability to view homes. Consequently, buyers are relying more on media to help preselect the homes they find most viable than the tried-and-true method of showing up in person. The immediate result has been a dramatic decrease in traffic through active listings.
With showings down significantly, sellers must rethink the way they market their homes if they want their share of the decreasing number of visits. Therein lies the predicament; many sellers are having a difficult time adjusting to the new realities and need extensive coaching to help them understand the current market realities.
In light of the unusual circumstances in which we find ourselves, I recommend following these five critical steps to maximize a seller’s potential:
1. Prepare extensively
Preorder inspection reports, obtain clearances and upgrade as necessary. With fewer homes being visited, the ones that sparkle will be the ones getting the most visits and offers. Money must be spent wisely. The goal is to remove potential objections, not to over-improve.
2. Stage fully
Set the stage for pictures. With limited access to homes, buyers are shortlisting properties based on what they can see on their mobile devices. It’s become somewhat like online dating. Buyers are giving sellers a mere seven to 10 seconds to grab their attention and keep them looking at any property. If they don’t like what they see online, they won’t visit.
3. Photograph beautifully
Still photos are no longer enough, and phone pictures are out. Invest in professional pictures and factor in drone footage, video, 3D tours and floor plans to help buyers better visualize themselves in a home.
4. Document completely
Have all required documentation available, including inspection reports and disclosures. Make sure all are readily available online so buyer agents don’t need to contact listing agents to get copies.
5. Price strategically
This is not the time for sellers to be overly optimistic and go for unrealistically high prices. The market is softening, and sellers must price ahead of it. Buyers are currently looking for bargains, and if any home is priced too high, they will swipe left and move on.
Get everything right, and your listings stand a great chance of selling. Miss any category, and you may help sell your competitors homes instead.
Carl Medford is the CEO of The Medford Team.
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