House hunting in a pandemic: Virtual open houses and drive-thru closings

Spring is normally peak season for the housing market, but social distancing regulations and measures to classify real estate as a nonessential business have ground the industry almost to a halt.

That has pushed some real estate agents to get creative, ushering in a new era of virtual home showings, Facebook live open houses and "drive-thru" closings to let house hunters buy their next homes virtually unseen.

Home sales and the mortgage industry had been heading for a bumper year. New-home sales were expected to rise to 750,000, an 11 percent increase that would have put them at a 13-year high, according to the National Association of Realtors. Through the first half of 2019, house prices were at record highs in markets such as Chattanooga, Tennessee, and Atlantic City, New Jersey, according to the real estate data analytics company Attom Solutions. But as the pandemic took hold, home sales plunged in some markets by as much as 20 percent.

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Many agents' incomes depend on their sales and commission, said Steve Brown, president of residential sales for the real estate company Crye-Leike. With home sales dropping so rapidly, many agents find themselves unable to make ends meet. As independent contractors, they are eligible for unemployment insurance through the federal stimulus bill. But the law says that if people are able to telework, they aren't able to apply for unemployment insurance. That complicates eligibility for real estate agents working on commission.

Michele Messina, a Realtor with RE/MAX in Edgewater, New Jersey, now seals the deal on a property with local buyers through what she calls drive-thru closings to keep the minimum 6 feet distance recommended by the Centers for Disease Control and Prevention.

In drive-thru closings, Messina meets homebuyers in parking lots and hands them the closing papers through her car window to sign and hand back.

She regularly hosts Facebook Live showings in which she walks through a property and answers questions over chat. When she does need to meet with a local buyer for an in-person showing, she and the buyers put on masks and foot covers.

"It looks like we're going to perform a surgery — but we're going to see a home," she said.

Over the last weekend of March, the real estate brokerage firm Redfin found that 30 percent of all home tour requests it received were for live video tours, compared to just 0.2 percent the first weekend of the month. But the company has seen a rise in virtual tours since 2018. One in 5 homebuyers made offers on properties sight unseen, according to a May 2018 survey commissioned by the company.

"Over time, as technologies continue to advance and people become more comfortable relying on them to make big financial decisions," Redfin said, "we expect sight-unseen offers to become more commonplace, even throughout fluctuations in supply and demand."

For agents like Mabél Guzmán, showing homes virtually is business as usual. Guzmán, a Realtor, started showing homes in the Chicago area over Facebook Live and FaceTime five years ago. Just before the virus swelled into a full-on pandemic, she closed on a home entirely over text, email, FaceTime and e-signature.

"We're living in extraordinary times and unusual circumstances," said Guzmán, who also serves as the vice president of association affairs for the National Association of Realtors. "If you have the ability to work, you have to be creative."

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The technology to show homes has advanced beyond photos on websites to virtual reality, said Glenn Sanford, the founder of the online real estate brokerage eXp Realty. The company launched eXp Realty 360 Tours, which let agents create 360-degree home tours with video chat integration, in the fall.

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"The uptake has been pretty dramatic," Sanford said. "We've doubled our usage of those platforms internally for those listings."

Tracey Ruiz and her husband closed on a home in Florida in January, before the pandemic took hold. They had never seen the home before they signed the papers — completely remotely and online. They saw five homes virtually through FaceTime tours with an agent before settling on a home in St. Johns.

"Since we started looking until we closed, we have no regrets," Ruiz said. "It was less stressful buying a house than selling one."

Last week, a real estate broker for the Corcoran Group based in the Upper West Side of New York City was reported to have died from the coronavirus. New York reclassified the real estate industry as an essential service just one day before the reported death. Corcoran didn't respond to a request for comment.

The National Association of Realtors recommends that when a home showing is absolutely necessary, only one buyer should enter at a time, with 6 feet between each guest. It also recommends that agents require potential buyers to wash their hands or use an alcohol-based hand sanitizer immediately upon entry and to remove shoes or cover their shoes with booties.

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But for some real estate agents, the risk of infection between going to a grocery store or showing a home to a buyer is the same. Guzmán, the Chicago-based Realtor, said the likelihood of contracting the virus from a vacant home are slim, but she still recommends wearing a mask and gloves during home showings.

"If someone says they don't have concerns, I'd be concerned they aren't concerned, because you just don't know," she said. "There is a certain level of risk."

CORRECTION (April 9, 2020, 1:54 p.m. ET): An earlier version of a caption in this article misstated the location. It is Portland, Maine, not Portland, Oregon.