In the best of the times, homebuying is a fraught process – stressful, time-consuming and marked by friction across several steps of a months-long process.
There’s searching for the house, finding an agent, scheduling the time to see the house, and for many would-be buyers, even making an offer can be a bumpy task. That’s because buying a home means they may have to sell a property they already occupy, qualify for a mortgage, and get all the home inspection boxes checked.
These are hardly easy times, and as the country makes its way through the economic headwinds and social distancing that have become the hallmarks of the pandemic, the real estate market has been upended.
After all, there are face to face meetings tied to meeting with real estate agents, with touring properties, with buyers and sellers gathering to sign forms (multiple copies) and sign checks.
In an interview with Karen Webster, Drew Uher, CEO of HomeLight, an online real estate platform that brings consumers and real estate agents together, said the traditional homebuying process is poised for disruption. Platform models can change the dynamics of showing and buying homes, eliminating friction that has marked traditional, face-to-face interactions.
With a nod to the real estate market at large, Uher said “ real estate is down, but it's not out.” He noted that depending on the markets where one looks, listings and escrow volumes are down between 30 percent to 80 percent as both buyers and sellers have pulled back.
But the industry is starting to come back, said Uher, off recent troughs. As HomeLight has found in its own research, as of the end of April, its agents report that 58 percent of sellers and 51 percent of buyers say they will delay plans to return to the market for a few months. However, these agents also state that a third of clients on both the buy and sell sides have “already started to resume their plans.” And there is reason to believe the recovery will be long-lasting. There’s enough inventory on hand, at about a three-month level, to keep home prices steady.
These positive longer-term trends are in part due to the fact that sellers choose to put their homes on the market because of life changes, such as divorce, births, death, and job losses or new employment. In the wake of the pandemic, he said, many of those life-changing events are happening with speed, and may translate to pent up demand that unfurls as soon as people feel comfortable listing their properties.
Getting to that level of comfort? Well, that can be streamlined a bit with the aid of technology.
Eyeing The Digital Transformation
To that end, the company last month announced its Move Safe Certification program. That program adds new functions alongside its agent matching service, and certifies agents (now at 7,000 certified agents and counting) according to their ability to meet with clients virtually, use an electronic signature for documents, ensure the properties are clean and limit showings to serious buyers.
As Uher told Webster, “we're certifying our agent base to make sure that they're using best practices and then, communicating that with clients.”
People will still want to inspect properties in person, but that part of the process will come later in the equation, said Uher. Pre-coronavirus, the goal for agents would have been to schedule listing presentations early on. But now, he said, roughly 90 percent of agents have been using Zoom and other video platforms to meet with clients, virtually, before they ever set foot on a property.
He said that he company now has offerings in place that handle all aspects of the transaction, including the Closing Services feature launched early this year – focused on title and escrow services for agents and home sellers – to Simple Sale, which matches sellers with iBuyers, and where cash offers are made online in minutes.
From Paperwork To E-Signature
As for paperwork, Uher said that the industry is likely to move, increasingly, toward remote, online notarization.
Signing documents online, from closing or settlement statement to bill of sale can remove steps in the equation, and improve safety.
In this environment, too, contingencies demand some flexibility in homebuying. Uher said that in order to actually afford a new home, sometimes buyers have to sell their current properties to qualify for the new mortgage. In some cases, they may have to move to a rental, which can be disruptive. HomeLight can purchase the existing home from owners, directly, allowing them to rent (and live in) that dwelling. That offering helps eliminate contingency factors and can boost liquidity for a future home transaction across its platform.
“It solves the mechanical problem,” of homebuying, he said “and also solves the safety problem” as a transaction takes place without endless streams of people circling through on-premise viewings.
Looking ahead, Uher said there will likely be shift toward transactions in the suburbs and to rural areas in the U.S.
Metro areas like New York City and San Francisco may see less interest, as pivots to work-from-home scenarios show that one need not be physically present to work in tech and finance.
People will likely gravitate toward locations with relatively lower tax rates, especially as they grapple with the continued fallout of a rocky economic climate.
Along the way, the real estate market will likely be forever altered, through platforms that streamline the process, digitally, to make them, as Uher put it: “Simple, certain and satisfying.”