There is no question that the coronavirus pandemic has altered the way we live our lives, and the same can be said for many businesses. Lockdown and social distancing measures has forced many businesses to adapt to adapt to new working procedures, much of which has often included a turn to digital solutions. In the early stages of the pandemic, towards the start of 2020, many predicted that this suddenly heavy reliance on digital working would alter some industries permanently. Now, as we are approaching the end of 2020, how has the digital real estate landscape developed or cemented? Do professionals still think they are here to stay well after the pandemic has ended?
In March 2020, as the pandemic had taken hold on much of the world, Forbes predicted that much, if not all, of the home buying process would become digital, taking place online, ‘similar to how the stock market can be accessed through a Bloomberg terminal’. These processes would be achievable online, due to the digital tools that are available to make the various stages of homebuying accessible remotely. Forbes wrote:
‘Software that is based on emerging tech (such as blockchain) allows participants to not only make paperwork and asset ownership secure but also complete work remotely. New tech comes with additional benefits, including the simple avoidance of establishing physical contact during periods of crisis. Such crises include the public spread of diseases (such as outbreaks and pandemics), dangerous weather conditions (such as snowstorms and hurricanes), and unstable political activities and rallies (such as protests and riots). The teleconferencing startup Zoom Video Communications reported that its stock has gone up by 38% in the past month, as the coronavirus panic is causing more people to switch to a remote work mode.’
In a recent article for The New York Times, Michael J. Franco, a broker with Compass, discussed how, although some clients prefer in-person closings, others are happy to close housing deals on virtual platforms, signing documents digitally. He stated, ‘“In my experience, the majority of people are comfortable using DocuSign on their phones,”…The pandemic has “really forced people to rely even more heavily on technology and I don’t think that’ll change going forward.”’
We have also seen how video conferencing has become a staple for businesses to run during the pandemic. It has been essential for colleagues to communicate, for important client meetings and important in our everyday lives as we have caught up with loved ones. This has been no different for the Real Estate market. Prior to the pandemic, more and more Real Estate firms were utilising digital technologies such as 3D, virtual tours and even video calls which allowed more and more people to quickly and easily glean information about a property from the comfort of their sofas. When the pandemic hit, many agents were relying on ‘digital tours’ more and more, investing in the technology to accommodate the more pressing needs.
Some of these procedures have needed to develop rather quickly, and in some areas of the house buying process, guidelines are being re-examined and adjusted to allow for digital procedures to be used and remain legal. For example, The New York Times recently outlined: ‘since March 31, an executive order by Gov. Andrew M. Cuomo has allowed notaries in New York to sign documents using audio-video technology instead of signing and notarizing documents in person,’ and ‘new and updated contract management systems have helped make wet-ink documents, faxing and messenger services obsolete in the contract-signing process. A platform like DocuWalk, which uses blockchain technology to record transactions through a decentralized network, makes it a quicker, more auditable and secure process.’
The digitization of the Real Estate industry does not mean however, that the house buying process is easier in all cases. Due to the economic disruption derived from the coronavirus crisis, banks are a more careful in the lending process. Further, as many people are struggling having facing financial losses, layoffs and unemployment, purchasing a property is even harder. Michael Bensimon, a senior loan officer at Freedom Mortgage said to the New York Times, “The mortgage process has become a lot more scrutinized because we’re writing loans that have to perform or else we’ll have a financial loss,” said. “In the environment we’re in, the fear and concern that loans can go bad quickly is much higher.”
However, towards the start of the pandemic, many predicted that the housing market would slump and people would not be able to buy houses let alone do the process digitally, in many areas this has proved incorrect, and some places has even seen a boom in property purchases.