How do you sell a home without an open house?
This is a question Bay Area realtors have had to answer very quickly if they want their listings to sell in what is typically the hot spring season.
In early March, Bay Area shelter-in-place orders did not include real estate as an “essential” business and all showings came to a halt. During this time, realtors could only do virtual walk-throughs, which some doubted would ever be enough to close a deal, especially on the higher end. “It’s hard to imagine virtual tours of luxury properties being sufficient,” said Neal Ward, who specializes in selling such homes in San Francisco. “But I think that everything I possibly knew a few weeks ago has the potential of changing moving forward and we have to be ready with tools and practices to adapt appropriately.”
On March 28, real estate received the “essential” designation. Open houses were still out, but private showings taken with precautionary measures were back in.
Today, buyers look through disclosure packets and take a virtual tour before they see a home in person. This additional screening eliminates a lot of non-serious buyers, said East Bay realtor Deidre Joyner. “In our niche market we have older housing stock and it is not unusual for an older home to have repair recommendations,” she explained. “If a buyer can rule out a home based upon a property inspection report, then we are weeding out potential buyers who were likely never going to write an offer.”
If a buyer does make it to an in-person tour, it’s not uncommon to have to sign a release acknowledging the risks of the virus before entering the home.
Realtors do say buyers tend to have a better experience than they might have had at a crowded open house, despite the addition of masks and hand sanitizer to the very personal home buying process. With only a pair of buyers and an agent allowed in the home at once, buyers have the time and space to thoroughly examine the home. “Buyers seem to enjoy private showings more than open houses,” said Bebe McRae, who sells properties in the East Bay with partner Alexis Thompson.
They are also enjoying the more “transparent” pricing that realtors are now recommending to their clients, McRae said. The thought is that if open houses are out, the chances of multiple offers dwindle. So, pricing a home low in order to elicit a bidding war no longer makes as much sense.
“Since we are trying to limit the access, I have recommended to all of my selling clients to raise the price closer to a price they are willing to accept,” Joyner agreed. “I believe that buyers appreciate transparency and clarity during this time.”
While there are some definite benefits to being a buyer during this period, realtors said the dynamics of low inventory and high demand haven’t changed that much. Some buyers might be scared off, given the economic uncertainty, but there are still more buyers than sellers and the buyers who remain are highly motivated. “Since SIP, I have gotten a family into contract and this week I am showing properties to three sets of buyers,” said Joyner. “While some buyers are watching from the sidelines, there are others who are in a position to purchase.”
Many sellers are also still moving forward with listing their properties, Joyner said. She was working with nine sellers before shelter in place orders came in. Of those, one decided not to sell at all, and two are on hold until they can find a place to move. The others are all moving forward, despite the new restrictions.
It’s too soon to tell how sales prices will ultimately be impacted by the new restrictions. But, looking back to the last financial crisis of 2008, Ward said his well-heeled sellers would likely just sit out the spring season rather than rush to sell in a down market.
“I do not feel that we will see properties coming onto market on the northside due to financial distress of the sellers. We did not see this in 2008 and I feel we won’t see it now,” he said. “Fortunately, in the Bay Area we have a very strong and diverse economy along with supporting good buyer demand and as always limited inventory. I believe buyers now more than ever will place greater value on their homes.”
Published on 2020-05-07 11:17:15
