Protecting Your Health and Your Interests
The outbreak of COVID-19 is a situation unlike any experience for contemporary Americans. The real estate industry is not unique in having many unknowns about how this crisis will pan out.
Please do not take any of this as sound medical or legal advice. This is merely a summation of ideas and opinions from a real estate professional, as well as public information.
Generally speaking, the best behavior is to stay in your dwelling and not go outside if at all possible.
This is a living post that will update as the situation unfolds.
Table of Contents
1) General Safety Precautions
Before seeing a home, contact the listing agent and have a conversation about what if any actions they have taken to treat the home. Are they keeping surfaces disinfected? Doorknobs? Light switches? Appliance handles?
Between every home showing, wash your hands or at least use a sanitizer. You don’t know how many other people have been touching surfaces in the house.
2) "Essential" Businesses
Pay close attention to notices not only from your county, but your city. Unfortunately we are dealing with a patchwork system right now.
For example, the City of Frisco lists Real Estate Services as “Essential.” McKinney does not.
On the flip side, Dallas County is now issuing $1,000 fines and up to six-months’ JAIL TIME for agents holding Open Houses.
3) COVID-19 Contingency Form
The Texas Association of REALTORS has released a brand new addendum to real estate contracts for situations arising from this crisis. It protects buyers of residential and unimproved (land) property.
There are three main points in this form. (Disclosure: I AM NOT A LAWYER. Consult with your attorney if you need a professional legal interpretation of this form).
A) Buyer or Seller can extend closing for 30 days.
B) Buyer can terminate contract and get their deposit back if they lose income/job because of the virus crisis.
C) Close on the house using virtual technology instead of face-to-face meeting if at all possible.
4) Effects on the Real Estate Market
The 2008 Financial Crisis was specifically due to bad loans within the real estate industry. This is not the case now. However, such a severe disruption of the nation’s economy is bound to affect all industries and sectors, especially such primary ones like real estate.
Mortgage applications, which reflect the buyer supply, have been yo-yo-ing in recent weeks. It’s hard to say what the outcome for that will be.
Generally, an economic downturn decreases liquidity in the real estate market. That means, as there are less buyers and sellers in the market, real property takes longer to sell – it is more difficult to turn real property into “liquid” money. That usually means prices will drop to help speed up sales of real property. A cheaper home will sell faster is the principle here.
I predict communities and areas that practice social distancing and slow the spread of the virus will remain vibrant, and those places where the virus spreads rampantly will likely see decreases in property values!
The month of February seemingly did not have a decrease in “Foot Traffic.” I predict that will change as more people are becoming aware of the severity of the virus and take proper safety precautions.
If you are wanting to sell your house and buy another one, it’s never a bad time. Property prices should affect the home you sell and the home you buy more or less equally. This may not be the case if you are significantly upsizing or downsizing, as economic factors could affect different categories of price ranges differently.
If you are a first time home buyer, now is a perfect time to get in touch with me as your Realtor, learn more about your wants and needs, and prepare for the most opportune time to enter this changing market.
5) Stopping The Spread
Being a math geek, studying how viral pandemics tend to follow mathematical laws is fascinating. Understanding these laws is also key to fighting the spread of the virus.
Viruses spread exponentially, meaning the speed of which they spread also gets faster.
Imagine pressing down on your accelerator of your car. Your car drives faster. Now imagine there’s another pedal that makes the first pedal go faster.
Not only are you going from 0 to 60, you’re getting from 0 to 60 faster and faster as well. Meaning it is only a short time before you are traveling at a super-sonic speed. And an even shorter time before you are at intergalactic speeds.
Social distancing is not just about protecting yourself from getting sick. It’s about stopping the spread.
Imagine you come into contact with only three people in a day. That doesn’t seem like much. But what if those people also come in contact with three people? And each of those people also come into contact with three people? Since viruses spread from carrier to carrier, by staying indoors you’re not only protecting the three people you may have otherwise had contact with, but the thousands of people that grow out from your network’s network’s network.
6) Real Estate Industry Adaptation
The Real Estate industry is adaptive, and is already rolling out new ways to help clients during this time.
Open Houses are replaced with virtual tours. Closings at title companies can now be done remotely.
Click here to review guidance from the National Association of Realtors about safety precautions Realtors should be taking during real estate business matters, to make sure you are best protected. Click here for a full list of protective measures for property owners.
In summary, stay safe, stay informed, stay indoors, and use the new Addendum form!
YOUR Millennial Real Estate Agent
Questions? Text anytime, like RIGHT NOW!
Address 6841 Virginia Pkwy, McKinney, TX 75071