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For US real estate brokers, the show must go on - virtually
CLOSING day arrived for two Manhattan condos that brokers Jacky Teplitzky and Barak Dunayer had listed for sale - and that, in the age of the coronavirus, was a problem.
The process, usually an easy glide toward the finish line, is fraught with human interaction as agents, buyers and lawyers all walk through the unit for one final look before the paperwork gets signed.
So in an instant, the veteran brokers at Douglas Elliman Real Estate became amateur movie directors, with Mr Dunayer going alone into each apartment, summoning a group Zoom call and starting his show for a live audience.
"I turned on the dishwasher and the stove," he told them. "I plugged into all the outlets to make sure they work. I turned on the water. I flushed the toilets."
The global pandemic is forcing real estate brokers nationwide to adapt practices heavy on face-to-face interactions to the distance of a screen.
From online open houses to couriers hustling to gather as many as 10 needed signatures, the changes are happening on the fly in an effort to keep deals churning while everyone stays home.
With many Americans under self-quarantine and non-essential businesses shut down, rental tenants are signing leases without setting foot inside their apartments.
Some homebuyers are going into escrow based on virtual tours and delaying in-person inspections until they can close.
Redfin reported a 500 per cent nationwide jump in agent-led video tours in the week before California banned most in-person home showings, on March 20.
While safety concerns sparked the surge, demand will persist even after the lockdown lifts, according to Redfin chief executive officer Glenn Kelman.
"Already, before the crisis, because inventory was so tight, people were trying to make an offer before they could see it in person," he said. "Now that they're stuck in their house, you have to do it this way."
With the worst virus hot spots in urban centres, shoppers are likely to cast a wider net for properties, and online tours can help winnow the field, Mr Kelman said.
Even in New York City, the epicentre of the US outbreak, sales continue. Two condos went into contract this month to buyers who relied on virtual showings and never visited the sales office. Follow-up video tours helped seal two more deals. The apartments ranged from US$1.5 million to US$3 million each.
Online viewings may not work to sell every property, but at a project with relatively approachable prices, they are enough to push buyers to commit, according to Scott Avram, senior vice-president at the developer, Lightstone. "If they like what they see, and they feel like they're getting a good deal, they say 'I don't need to touch the cabinets,'" he said.
Video is also helping with long-distance transactions. At Manhattan's Waldorf Astoria, the historic hotel that's being converted into luxury condos, brokers anticipating interest overseas already had a series of recorded tours on hand.
An Australian buyer signed a contract the second week of March after a live FaceTime tour of the sales office with an agent, said Dan Tubb, the Douglas Elliman Development Marketing broker who is managing deals at the property. Now, with the office closed, he's guiding prospective buyers through the recorded tour from his New Jersey home.
Expensive apartments may prove to be a hard sell in Manhattan without in-person showings. Just two contracts at US$4 million and above were signed last week, data from Olshan Realty showed.
Invitation Homes, the largest owner of single-family rental houses in the US, offers virtual tours and floor plans in each of its 16 markets. Where permitted, clients can still do a walk-through before renting, spokeswoman Kristi DesJarlais said, but it's not the same as it used to be.
"Our leasing agents will open the home for viewing using social-distancing procedures and then they will remain in their car during the showing," she said.
Putting home-seekers at ease with the current reality is a new skill. Adam Marcus, who oversees leasing at RXR Realty's new Long Island rental development, Harbor Landing at Garvies Point, did several FaceTime tours this month - and at the beginning of each, he could see the client's discomfort. Without being able to read body language, Mr Marcus had to find another way to gauge what was bugging them. At the end of each tour, he asked: Tell me every negative thought you have about this place.
One client worried the kitchen cabinets were too small for her slow cooker, so he opened each one to show their depth. Another thought the yoga room was cramped. He took her back and walked through the dimensions. The effort paid off. Of the four virtual tours conducted at the project two weeks ago, three signed leases, said Mr Marcus. BLOOMBERG