What real estate transactions may look like in the not so distant future.

Originally posted March 2020.

Homes that get multiple offers are often sold in an "auction" atmosphere. If you think back to the last auction you saw on TV or participated in online, you'll remember this basic element of Auctions 101: the starting price is lower – sometimes quite a bit lower than the final sale price.  In fact, it's the low listing or starting price that gets people excited about the possibility of scoring a great value, whether they're bidding on an antique on eBay or on your home. And when it comes to your home it's that same low-price-seeking excitement that will bring more buyers.

In real estate, more showings are an inescapable prerequisite for more offers.   More offers generally mean a high sale price.

This doesn't mean you have to give away the farm, just that sellers who get multiple offers have most often priced their properties from a retailer's or auctioneer's perspective. Working with your expert agent, review the comparable sales data, and then do your best to list your home at a slight discount, not at a slight premium, compared to the recent neighborhood sales. That will get buyer attention. 

It is for this reason, among many others, that it is important to use an agent who is locally based.  They will know the market and have the resources to make things happen during your sales or purchasing process. 

Also, current events have made it clear that having a tech-savvy real estate agent is essential in creating a successful transaction.  Up to the beginning of March, it was another great real estate year.  San Mateo and Santa Clara Counties sales were nearly the same as 2019, then with Stay At Home orders, all in-person home tours stopped, and 3D home tours on Zillow skyrocketed 188% by the end of March.   Virtual home tours online were up 408% even as listings were down 27%.  This tremendous shift made us all more reliant on the Internet for up to date information, especially since all home tours are by appointment only.  And, of course, there was the explosive use of video conferencing with Zoom, Google Meet, Microsoft Teams, and Cisco's Webex.

We know traditionally agents and clients have gotten together to sign contracts, review documents, prepare listings, and review buying opportunities.  Now, at least for the moment, none of that is possible, and like most time-bound events, there’s no going back.  Tools like Docu-Sign have become more important than ever as we work remotely.

Brokerage company's like Redfin, Compass, and Keller Williams have built their own online home search platforms with mobile apps in anticipation of forthcoming changes.  And, a few agents have developed their platforms independently looking to serve their clients at an even higher level.  Then there are agents who rely on their local MLS to create all of their content, rarely optimizing seller exposure or buyer content.   These individuals will not be able to fully serve their clients.

While most clients, on both the sellers’ and buyers’ side of transactions, have gone online to either compare their property to others or find the perfect home, never have these services been more essential to than now.  These services allow buyers and sellers to match and fit their needs and their dreams to the reality of the marketplace by using virtual walkthroughs.

The question arises how does one interpret this electronic information when time is limited.  This, again, is where a skilled agent or broker can be invaluable.  With the experience of knowing neighborhoods, construction types, comparables, and quite often the agent listing a property or bringing buyers, the agents/brokers can sift through a tremendous amount of information clearing the way to a successful transaction. 

Will we view homes as in the past?  Of course.  The difference will be that everyone will be able to preview a large number of properties online in greater detail, faster.  Currently, users can filter their searches and record their preferences streamlining future searches, ultimately saving time.   Also, as AI takes hold, the characteristics for every home previewed will be logged and recommendations made.  We expect that disclosures, the documents that tell the history of the home, will be immediately available to all potential buyers as they are searching.  Then, we see all downloads being recorded allowing seller agents to communicate directly with interested parties or their representatives - these links will be posted in the MLS.  Agents will send all contract documents as they do now, but how contract documents are reviewed is likely to change.  Contracts might have automated instruction sets highlighting significant facts.  Disclosures will be accompanied by audible and visual cues including animations to illustrate key points.   Virtual tours will be the norm.  These tours will be augmented with drag and click options.  And as homes are physically toured, we can expect dynamic interfaces that identify areas of interest.  These might take the form of geo-location and lasers on personal cell phones – pinpointing both good features and inspection callouts  (privacy controlled by the user).  

As agents and brokers, we will have to actually step up our game, because as one can imagine, nearly every aspect of a transaction from the first moment that an agent meets a buyer or seller, most likely online, everything will be recorded.  Everything has changed with COVID-19, and will continue to change.  New disclosures and the PEAD releases are now required with each property viewing.  With these changes and others the entire process will be highly curated, and having a skilled agent will save time.  It will be critical to have an agent who acts with extreme professionalism at all times and has the tools and skills to offer and find properties in a competitive market.  While, yes, there have been more online visits, the home buying process will be further streamlined.  Having a great tech-savvy agent in your court is more important now more than ever.