How COVID-19 Has Made Technology the New Virtual Reality of Home Buying
Among the many effects of the COVID-19 pandemic has been a shift in how home buyers and sellers approach the usual process. Gone or limited, at least for now, are the traditional physical walkthroughs and open-houses, as well as in-person closings and other legal transactions related to a sale. The virtual trend is especially prevalent among millennials who are increasingly buying homes sight-unseen.
Notably, disruptions caused by the pandemic and the need for social distancing have accelerated trends toward digital and online technologies surrounding just about every aspect of home real estate sales—“from house hunting to securing a mortgage, getting an appraisal, notarizing documents, and signing the final closing documents.” As virtual home buying and selling activities have become more commonplace, as noted by BizJournals, “quality photos, video or 3D tours have become more important than ever.”
Industry experts agree that the COVID-19 pandemic has necessitated new socially distanced tools and methods to facilitate home sales, including the following:
- Virtual walkthroughs/tours
- High-quality photography
- 3D mapping
- Drone surveys
- Video calls (to show properties and to handle other more mundane aspects of real estate)
- Curbside and no-touch closings (ex: DocuSign for legal transactions)
- Online and drive-by appraisals
- Remote, online notarizing tools
- Smart contracts/contract sharing platforms (ex: DocuWalk and DotLoop)
Is this just a temporary solution? Experts are predicting the process for selling homes will likely never be the same. As Glenn Kelman, CEO of the national brokerage firm Redfin, told USA Today, “All the technologies we’ve built for visualizing a home and virtualizing the closing process will just keep growing in importance.”
Trends such as virtual showings, listings teeming with high-quality photography, curbside and no-touch closings, and even buying homes without ever stepping foot on the physical property are expected to be here for the long haul. According to realtor.com, “The detailed online information has helped home shoppers narrow down their choices before they visit properties in person, while virtual tours help out-of-state shoppers view every nook and cranny of a space, helping them feel more confident in making sight-unseen purchases.”
Industry statistics are proving these trend analyses out. For instance, Redfin.com reports (as of December 2020) that 3D walkthrough views (i.e., prospective buyers can click through a 3D scan of a property), have seen a 560% increase since February. Video tours, too, have become an accepted way of viewing a home, with many buyers making an offer on a property “sight unseen.” According to a recent Lending Tree survey, three in 10 prospective buyers would buy a home without taking an in-person tour. Moreover, broken down by age group, millennials are the most likely to do this, at 42 percent, followed by 31 percent of Gen Xers and 10 percent of Baby Boomers.
Additionally, results from a recent realtor.com and HarrisX survey of 2,000 home shoppers who intend to purchase a home over the next year conclude that the pandemic has made nearly 50 percent of millennial home shoppers speed up their purchasing timeline and that this demographic is overwhelmingly taking advantage of virtual home search techniques.
The survey concludes that 59 percent of millennials reported COVID has changed the way they are approaching their home search. Of those respondents:
- 37 percent are spending more time researching properties online.
- 35 percent are spending more time looking at listing photos.
- 32 percent are spending more time watching listing videos.
- 31 percent are being more selective about the homes they decide to tour.
- 27 percent are driving by the home to check out the neighborhood.
With buyers and sellers alike becoming more comfortable with virtual tools as part of the home shopping experience, it seems that many of these methodologies may be here to stay—or at least utilized in concert with in-person transactions—even after life as we once knew it resumes.