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8 months into the pandemic, most industries have had to adapt their services for the growing online community, and real estate, is no exception. Although traditionally an in-person exchange, agents and brokers have had to re-think and re-invest in changes to ensure purchases continue to move forward. The good news is that technology is now readily available to assist both buyers and sellers with this innovative “user-friendly” sight unseen process.
Redfin’s Lily Katz writes on July 30, 2020 and updated earlier this month on October 7th in her article Survey: Almost Half of Recent Homebuyers Made an Offer Sight-Unseen, the Highest Share on Record ( https://www.redfin.com/news/buying-house-sight-unseen-increases ) that “virtual tools have helped home buyers feel more comfortable shopping online to choose a home and even make an offer, without first stepping inside." Buying a home remotely has become easier as touring technology has improved. According to Katz, “Views of virtual 3D walkthroughs on Redfin.com have surged 243% since late February, and video tours led by Redfin agents now account for 10% of all Redfin home showings, up from less than 1% at the beginning of March.”
As the chart below shows, 45% of Redfin's consumers who purchased a home in the past year made an offer on a property without first seeing it in person. This is up from 28% in 2019 and the highest share since at least 2015, when Redfin first started collecting such data.
Sight-unseen offers will continue to rise in the upcoming months, according to Daryl Fairweather, Redfin’s chief economist. “I predict that by the end of the 2020 home-buying season, the majority of home buyers will have made a sight-unseen offer.” He continues, “The pandemic has changed the way many people view homes, and on top of that, the market is highly competitive. If you aren’t using this strategy, another buyer who is could beat you to the punch.”
According to a July 29, 2020 article entitled Many Homes Selling Sight Unseen in Hot Real Estate Market ( https://insurancenewsnet.com/oarticle/many-homes-selling-sight-unseen-in-hot-real-estate-market# ) Dick Selzer, points to a recent Zillow survey, where 36% of respondents said they would buy a house online and 43% said they'd sell a house online. And these days, he notes, we have the technology to make the whole process fairly straightforward. The Zillow survey, which is discussed at https://www.prnewswire.com/news-releases/home-shoppers-are-trending-toward-buying-sight-unseen-selling-virtually-301094618.html states “Digital tools widely adopted during the coronavirus pandemic are giving people the ability and the confidence to buy or sell a home in a tight real estate market where homes are selling at their fastest pace in two years. A new Zillow® survey finds consumer demand will likely keep those tools in place and lead to more online real estate transactions in the future.”
Even with these tools literally at our fingertips, clearly a majority of people still want to see a home in person before placing their purchase money down, however, when asked to choose between taking an in-person or a virtual tour after the current outbreak has ended, "one out of three say they would choose the virtual or video tour - a meaningful departure from traditional shopping behavior.” Zillow economist Jeff Tucker articulates, “The home shopping tradition of loading the family into the minivan and touring open houses all weekend may be over… Now shoppers are realizing they can use virtual tours to either skip in-person shopping, or at least to whittle down their options and visit fewer homes in person, making it easier and less time-consuming to find their next home. That speed advantage can give buyers a leg up in today's fast-moving market."
There is no mistaking that virtual and video tours are becoming the new standard. “Of the surveyed Zillow Premier Agents, 86% said they started or continued to use virtual or video home tours during the coronavirus outbreak, and 72% said they are likely to continue providing those tours after the current outbreak has ended. And Zillow found that three out of four adults in this country want the option to tour a home remotely through virtual or video technology if they were home shopping right now.”
On May 17 and 18, the National Association of Realtors conducted a flash survey of its members on the impact of the coronavirus on their market. Of those who are working with home sellers with active listings, the majority reported changing how their clients’ homes are viewed while the home remains on the market. 92% reported that home sellers have made changes, including stopping open houses or requiring all those who enter the home to take appropriate precautions before entering the home.
In a separate survey conducted by realtor.com® in April 2020, shortly after the COVID-19 outbreak in the United States, 24% of 1,300 consumers surveyed said they’d be willing to buy a home and 30% would be willing to rent one, without first seeing it in person. On April 17, 2020, Realtor Magazine reported in Survey: Quarter of Consumers Accept Virtual Home Buying ( https://magazine.realtor/daily-news/2020/04/17/survey-quarter-of-consumers-accept-virtual-home-buying ) that “Listing data, detailed photos, and virtual and live-video tours will suffice for a growing number of consumers who are looking to buy a home; they don’t need to physically visit the property before making an offer." Furthermore, "Younger demographics appear to be the most comfortable using virtual tools in lieu of physical, in-person showings - 29%. Further, 21% say that COVID-19 has made them more likely to move into a home sight unseen in the future.”
Nate Johnson, chief marketing officer at realtor.com® reiterates that “As real estate agents and consumers seek out ways to safely complete these transactions, we believe that technology will become an even more imperative part of how we search for, buy, and sell homes moving forward.”
Survey respondents indicated the following technology features are most helpful when deciding to buy a new home virtually:
· A virtual tour of the home - 61%
· Accurate and detailed listing information - 58%
· Accurate and detailed neighborhood information - 53%
· High-quality listing photos - 51%
· The ability for the agent or landlord to show the property via video chat - 39%
House Hunting Online: Can you sell a Property Sight Unseen? An informative webinar hosted by the Matterport Editorial Team on October 7, 2020 which can be found at https://matterport.com/resources/content-library/house-hunting-online-can-you-sell-property-sight-unseen?utm_source=Web-Direct&utm_medium=Web-Direct&utm_term=Webinar&utm_content=Website&utm_campaign=WBR-2020-09-17-Global-RRE-Sight-Unseen speaks again to the real estate industry’s increase of virtual viewings that has led to the growth in buying or renting without viewing the property.
The webinar acknowledges that technology has decreased buyers’ hesitancy, reflected by millennials who grew up with the internet and who, as stated before, are more likely to buy a home sight-unseen as compared to older buyers.
Also discussed is how virtual tours have proven to drive higher offers and help sell homes faster. According to webinar, and somewhat obvious, “Virtual tours give agents the opportunity to reach a wider audience by making virtual open houses available 24 hours a day to prospects living anywhere in the world. People can house hunt safely within the comfort of their own homes, limiting contact and minimizing risk in this current environment.” Additionally, these tours are a tremendous time saver for agents since prospective buyers can “walk through” the home to see if it’s right for them before requesting an in-person showing, thereby, weeding out the not-so-serious buyers. It’s a win win for sellers too because they have less traffic in their home, especially now with safety and social distancing being of concern.