May 17, 2020
The Zombie virus temporarily stalled the pace of real estate transactions. All people with roles in the transaction were in the bunker …. Waiting and waiting and waiting.
Now it seems there is light at the end of the tunnel and we can venture to investigate transactions.
I am noticing a permanent change to the real estate shopping process.
The property marketing is now Live online and then pre-recorded online with digital tools using video and 3 dimensional tours and 360 degree cameras.
The market for multifamily apartment buildings was in such demand that sellers advertisement remarks said “No interior apartment showings without an accepted signed contract. Do Not disturb tenants.”
We can attend online “Live” Open Houses or watch the pre-recorded Open House. No need to wear a mask when you watch online.
I have mounted my camera to a gimbal, which stabilizes the picture and videos. We have panoramic 180 degree photos from ceiling to floor.
It allows me to pre-record a guided video tour. Have not yet tried the hyperspeed nor slow motion. Probably no need inside a building.
Your property will have more attendance. Sellers will have more attendance at online property tours, however you will also have more people who attend and decide Not to move forward. The process is easier and quicker to sort out those who are not interested. Online tours save time but has more dis … appointment.
This is good because I expect the marketing process to take longer.
The number of days on market will increase, because sellers want the price they expected before the zombie virus and buyers are looking for a good deal as a result. Buyers and sellers are further apart, which means there are fewer transactions. It may be true that prices have not significantly changes since the zombie virus, but buyers and sellers will need months to know.
This is an emotional process which is guided by our personal circumstances and the economic situation. Time will tell.
We can read opinions of expert forecasters everywhere. My experience makes me think the major determinant of your property time on market ….. is the emotional process of the seller and personal circumstances.
Unless we find a buyer who has been looking extensively for months wanting your unique property and location. Buyers haver a process also, but it takes a long time. It is common that a buyer starts without knows what the target looks like. Realtors frequently say that the first offer is the best offer. This is because a buyer has been searching for some time and finally your unique property hits the market and the buyer has been online searching and waiting for the right property and says “This is it”. Then the buyer agent reminds the buyer that the buyer offer price to purchase should not be more than a bank appraisal.
Sometimes a buyer has to learn the market by property tours and by price sticker shock …. Especially buyers are learning the higher prices of central located properties with higher density.
It will take a months and maybe years for the expectations of buyers and sellers to narrow the bid and asking price expectations.
Had a small multifamily in contract on February that is new construction and vacant. The contract requires the seller to obtain the City Certificate of Occupancy before the closing in Mid March.
Then the city permit offices partially shut down. Some construction crews were limited. Now we are waiting for people to get to work.
City inspectors were slowed with construction permits and approvals of all types of construction and remodeling. Workers needed to stay home with their children because there is no school.
We do not yet know about children summer activities
We have been filling vacant residential apartments for a $100 fee.
It helps owner managers in several ways
· Online tenant lease applications
· Tenant pay $30 for background and credit checks
· Landlords review each lease in advance before the lease goes to the tenant for signature.
· Lease contracts by digital electric signatures
There is a three way telephone conference phone call with the owner and prospective tenant to arrange a time for tenant to go inside. This gives the owner an opportunity to meet each prospective tenant.
We do not collect any rents nor deposits from tenants.
We can also contact current tenants to sign lease extensions.
Each situation is different and requires some latitude and adjustment.
We have been filling commercial spaces for a 1% fee with the same process.
Normally, after we have help an owner with the first tenant, the owner becomes comfortable and likes the process and asks us to fill other vacant spaces.