Business | Real Estate
Real Estate Practices During COVID-19
During this challenging time, the real estate market appears to be staying the course in Beverly Hills, but new guidelines and best practices mandated by the Greater Los Angeles Realtors Association and the California Association of Realtors (CAR) are making the process more complex. The Courier spoke to some of the top agents in town to find out how they are navigating the new rules.
Luxury real estate broker Joyce Rey, (who is responsible for over $4 billion in sales), did an analysis of westside properties over $5 million recently. “There has been a 38 percent decrease in closed sales during this period than at this same time in 2019,” she told the Courier.
In a world where virtual viewings have become an industry standard, when a coveted in-person viewing is booked, no more than one agent and two other individuals can be present in the dwelling at the same time during a showing.
“I was very lucky that I had three deals in escrow before the shelter in place,” said top residential broker Linda May of Hilton & Hyland. “Right now, people are doing deals but mostly with clients who saw the houses prior.”
As for the lucky few who can enter a home, the seller (or even a building manager) can’t be on the property. According to May, “If the house is vacant there isn’t the concern with touching surfaces or disturbing personal stuff. We can’t meet and take the client around to several different properties anymore so it’s very limiting right now.”
Before entering, the prospective buyers must agree to wash their hands or use sanitizer, don their own protective face mask, disposable rubber gloves and booties, but this has not been easy to enforce at times.
“The challenge is to get people to do what they are supposed to do,” said Jade Mills of Coldwell Banker Residential Brokerage who has sold $5 billion in the market to date. “One time, I had to turn someone away,” said Mills. “It’s only fair when you are coming into someone else’s home that you follow the rules. We are very sympathetic to our sellers who have strangers in their homes,” added Mills. “It is more challenging but I’m still extremely busy and we just put a property in escrow, so things are still selling. We just have to do it differently.”
As if the paperwork was not already a cumbersome part of any sales transaction, now signed declarations are needed before an in-person viewing can even take place. Anyone entering a property must provide information that to the best of their knowledge, they are not currently exhibiting any COVID-19 symptoms and have not been in contact with a person with COVID-19. This rule also applies to the seller.
According to Rey, “Special documentation requires a signature on the part of everyone who is going into a property; so they are aware of the risks. If something should happen, they [buyer or seller] can’t blame the broker.”
If anyone who enters the property is later diagnosed with COVID- 19, the person must immediately inform the listing agent, who will then make the best efforts to inform everyone who entered the property after the fact.
“We are all respecting the strict COVID-19 rules and observing them,” said May. “How we pre-vet is amazing. We need to make sure we are careful and asking all the right questions.”
“We’re just acting with a lot more precaution but, surprisingly, people are still very interested in seeing properties and we have had closings,“ said Rayni Williams, co-owner (with husband Branden) of Williams and Williams Estates Group. The Williams are also combating the challenges with technology. “We started a live Instagram video chat on Tuesdays at 11 a.m. (@WilliamsandWilliams) which is a virtual caravan where we talk about the market, our listings, and answer any questions,” she told the Courier.
Listing agents are also advised by C.A.R. to not leave brochures and flyers at the property, but instead utilize the MLS system to highlight the property.
“We have completely pivoted and hit the reset button in a big way,” said Mills. We are doing a lot of 3D videos and trying to prequalify every buyer before we bring them in.”
Despite the new hurdles, the market is not dropping due to the virus. “The prices have not dipped much because there has been such a retraction of inventory,” informs Rey. “People have taken their properties off the market and as a result, the shortage has buoyed prices. We are seeing a five percent decrease in pricing, but not a major dip for the most part.”
“We’re adjusting and adapting,” said Williams. “The key to life is being flexible, rolling with punches and marching on. We have to be advisors for our clients and be ahead of everything. We are doing daily calls and Zoom meetings. I tell my clients we made it through one of the worst recessions [in 2008] and it was one of our best markets. Even if the market dips down — and it will — it will come right back. It’s going to get worse before it gets better but if you’re smart and act swiftly you will survive.”
And, the demand for homes is still strong. “We are all working just as hard as before, but we are being creative and positioning houses differently,” said May.
As an example of the “new normal,” May was called by another broker about one of her listings in Bel Air. “The broker wanted to do a FaceTime showing for her client but had not been to the house before. We asked if she would mind going through the house virtually with us first. Then, she walked through with her client and it was like she had been to the house already.”
While virtual tours are not something new, “They have just become more sophisticated,” said Rey. “There is a far greater emphasis on online viewing than ever in the past. The Matterport 3D tour of the house is the most popular now. They show a model of the home called a ‘doll-house’ where you can actually see through the walls with a special camera. We are trying to use every very trick of the trade to attract people.”
In recent cases, “Some of the people who got into deals in February and early March have dropped out entirely or are renegotiating the price,” said Rey. As for the future after COVID- 19. “I think our market is going to go crazy,” said Mills. “We will just boom after this. There is only one Beverly Hills.”