Real Estate-in-Place: What Can We Still Do?
April 1, 2020
On Monday morning, it was announced that 6 Bay Area counties – San Mateo, Santa Clara, Alameda, Contra Costa, San Francisco and Marin – will co-sign an extension to keep the local shelter-in-place order in effect through the end of April. While this probably comes as a surprise to no one given the state of things, it serves as a harsh reminder to anyone hoping for a quick return to normal, that this is, in fact, the new normal.
So how is real estate adjusting to the new normal? Like most industries that rely on some degree of in person interaction, day-to-day operations in the real estate world have been significantly hamstrung by efforts to slow the spread of COVID-19. There was some confusion among agents early on as to whether showings could continue under certain circumstances (such as a home being vacant), but as guidelines from local and state authorities have come out, it has become clear that any outside activity should be avoided where possible. In a statement issued last week, the California Association of Realtors did not mince words in declaring that real estate activity does not fall under the category of “essential business”, except as needed to maintain continuity of housing construction.
The real estate industry is not exempt from [the statewide shelter in place order] except as needed to maintain “continuity of operation … of … construction, including housing construction.” Therefore, REALTORS® should cease doing all in-person marketing or sales activities, including showings, listing appointments, open houses and property inspections. Clients and other consumers are also subject to these orders and should not be visiting properties or conducting other business in person.
As you could imagine, this has thrown the proverbial wet blanket over the typically hot Spring real estate market. Since the Bay Area SiP took affect on March 16th, 319 homes have been pulled off the market in Santa Clara and San Mateo Counties combined. And buyers, for the most part, are putting their plans on hold as we all wait at home for this to blow over. The sobering reality for us in the business is that there are simply very few circumstances in which a real estate transaction can be completed without being able to physically access a home. That being said, this does not mean the market needs to come to a complete stand still. If you are a motivated buyer or seller, there is still a lot that you and your Realtor can accomplish to help get you closer to your goals, even if that falls just short of completing a sale.
First, for any buyers or sellers who are currently in contract and are worried that the shelter-in-place will keep them from closing on time – have no fear. Most sales, unless contingent on a buyer inspection that has yet to happen, should be able to proceed as planned. Forms can be signed via Docusign, banks are still issuing loans, and title companies are still processing closing paperwork. Your Realtor should be able to help you navigate the closing process from the comfort of your respective homes.
What if you are a seller whose home was already on the market when the shelter-in-place hit? In this case, you have a couple of options. The obvious one, and what many in this situation are doing, is to take your listing off the market completely, and wait for this to all blow over. If you go this route, your Realtor can still work the phones and send out emails to their network trying to draw up interest in anticipation of re-listing when the SiP is lifted. The other option is to just keep your home on the market and weather the storm. This may sound like a fool’s errand, but it is the best way to keep as many eyes on your property as possible if you’re in a situation where you need to sell sooner rather than later. By staying on MLS, you can still enjoy the same level of exposure as you would have pre-COVID-19. Plus, our local MLS has announced that it is suspending the accrual of days on market for the duration of the SiP, so you don’t have to worry about your listing getting stale during a period of minimal activity. Depending on whether you had any video or virtual tours done before the SiP, interested buyers should be able to get a pretty good feel for the home without having to physically be inside of it. Further, if you are selling a fixer or a home in a state of deferred repair, there is a chance you may even be able to close on a sale before the SiP is lifted. Builders will often buy a property sight unseen if it’s something that will wind up being rebuilt anyway.
Of course, the above applies to any seller – not just those were already on the market. The main challenge if you weren’t already on the market is putting together all the marketing materials you would normally want to have when you list your home for sale. You can still complete your seller disclosures under the virtual guidance of your agent, but getting any sort of inspection completed is unlikely. Having professional grade photos/video done is tricky as well. There are still companies we know of that will go out to shoot a vacant property, but anything occupied will need to be shot by the occupants. Cell phone photos and video usually aren’t ideal for posting on MLS for everyone to see, but they may be sufficient to send directly to buyers that you know already have interest. Either way, with some strong outreach and phone work, your Realtor still has a good shot at attracting buyer leads. Even if you ultimately fall short of getting your home in contract, you’ve done everything you can to prepare your home for a quick sale one the SiP is lifted.
Last but not least – for motivated buyers who feel like they have no other option but to put their search on hold – this is when your Realtor can really prove their worth. For the most part, it’s a safe bet to assume that most of those 319 homes that were pulled off the market are still for sale, or will be for sale again in the near future. It is the job of your agent to be scouring that list for homes that meet your criteria, making phone calls to listings agents, and uncovering as many hidden opportunities as possible. They should also be making regular calls to their network to uncover any other opportunities that may be lying in wait. If you are able to find something you’re interested in, but there are no photos or video of the property, your agent might be able to set up a video tour with the seller, or at least have them snap some phone photos to send your way. You may even be able to get your hands on disclosures and reports depending on how prepared the seller is. The goal is to equip yourself with as much information as possible so that when this is over, you are positioned to make your move as quickly as possible.
If you have any questions about how to push your own real estate goals forward during the shelter-in-place, please feel free to call anytime. We still have our full team at your disposal (from home, of course), and would be happy to help in any way that we can. You can reach our Broker, Bryan Jacobs, directly at (650) 642-8915.
Please stay safe, healthy, and home (when possible). We hope to get back out in the field with you all very soon.