As governors across the country started to issue stay-at-home orders due to the Coronavirus, known as COVID-19, many real estate platforms began to halt operations. Open houses with droves of people wandering around in close quarters were no longer deemed safe.
While some real estate options struggled to adapt to maintain business operations during social distancing and stay at home orders, REX has kept its door open to help Americans sell their home or find a new one when they need it most.
Before COVID-19, some home selling started to take place exclusively online with the rise of iBuyers, short for instant buyers. The platform matches iBuyers with homes they can flip. But COVID-19 has left some iBuyers panicked.
What Are iBuyers?
iBuyers purchase a house online for a “fair market price” algorithmically determined. Usually, the iBuyer won’t see the home but would send someone from their team to the property. They buy the home with an all-cash offer and close on the house in a few days. An iBuyer’s sale is expedited compared to traditional sales due to the cash purchase. The iBuyer then flips the home and sells it on the conventional market.
According to Realtor.com, in 2018, 6 million homes were sold. Of those, 99.8 percent were sold traditionally, while 0.2 percent were sold via iBuyer platforms.
Typically, iBuyers, who make up about 5 to 10 percent of all real estate transactions, pay a higher fee, 7.5 percent compared to a traditional real estate agent’s 6 percent, but can purchase the home for a lower overall price.
“For the real estate sector, the iBuyer is speaking to the convenience factor. Time is short. They need to know quickly and may ask, ‘what is someone willing to pay?'” Laura Brady, founder and CEO of Concierge Auctions, said at the Coping With an Instant Buyer World forum.
During last November’s Residential Real Estate Council members’ opening session in Washington, Marilyn Lund Wilson of the Wave Group reported that 38 percent of the consumers surveyed would consider using an iBuyer service. But consumers would not consider using an iBuyer solution if it was “too low of an offer” or “seemed too good to be true.”
Are iBuyers Closing?
In theory, the online nature of iBuyer companies should have transitioned well with social distancing measures. Still, many started to shutter in March because local governments have pressed pause on the economy.
Some iBuyers services will resume operations this week in some areas of the country, but with virtual showings.
In areas where they’re still operating, some iBuyers are hesitant to purchase homes because they fear after they flip the house this summer, an economic recession in the fall could eat into profits. Some of the iBuying platforms recommended to customers if they can’t sell the home, to rent it. Others realize they will have to lower their instant offer prices. The uncertainty of the market and the stop-and-start nature of the platforms are causing buyers to look elsewhere.
“Consumers are mostly abiding by stay-in-shelter directives, and it appears the current decline in buyer and seller activity is only temporary, with a majority ready to hit the market in a couple of months,” National Association of Realtors (NAR) Chief Economist Lawrence Yun said as a reaction to NAR’s Economic Pulse Survey.
Can I Buy A Home During COVID-19?
Yes, you can still buy a home during COVID-19 — and you can even do it online, too. The home buying process has transformed some during this pandemic, but it’s still possible with the help of technology and agents who care about their customers.
The National Association of Realtors released a survey that found a quarter of their agents had at least one client enter into a contract to buy a home without physically seeing the property during the week of April 12.
Thirty-three percent of real estate agents reported no closing delays. For those reporting delays, the top reasons listed included delays in financing, appraisals, and home inspections.
The survey found that 27 percent of real estate agents said they were able to complete nearly all aspects of transactions while respecting social distancing. The agents used social media, messaging apps, and virtual tours to communicate with clients and collecting e-signatures online.
“Expect second-quarter home sales activity to slow down with the broad observance of stay-at-home orders, but sales will pick up when the economy reopens as many potential home buyers and sellers indicate they’re still in the market or will be in a couple of months,” Yun said. “Home prices remain stable as deals continue to happen with the growing use of new technology tools. Remarkably, 10 percent of Realtors® report the same level or even more business activity now than before the economic lockdown.”
How To Buy A House During COVID-19
REX has remained open throughout the COVID-19 pandemic. REX provides customers with a large selection of homes, options to get the best mortgage rate possible, and the ability to secure their insurance and title all from one service. Some iBuyers may be resuming services now, but REX has remained open, gained valuable knowledge navigating this pandemic, and is still the better option.
REX has always operated online, allowing a seamless transition for business operations, with little disruptions for customers, during shelter in place orders across the country. For customers who prefer the phone, agents are available to talk through the best options.
REX started innovating in early March with virtual showings. Agents have already equipped listings with virtual tours and videos but can also provide personal virtual showings with potential buyers via video chat.
While this is an uncertain time, there are plenty of motivations for many to sell or buy a home, and REX is working to ensure customers can do just that with little interruption.
“The stock market crash is no doubt raising economic anxieties, while the coronavirus brings fear of contact with strangers,” Yun said. “At the same time, the dramatic fall in interest rates may induce some potential buyers to take advantage of the better affordability conditions.”