In the 1966 Spaghetti Western film The Good, the Bad, and the Ugly, three Civil War-era gunslingers vie for buried treasure. Following a tortuous journey and a brutal final battle, Good emerges the victor.
Wouldn’t it be great if life imitated art?
2020 has had more than its fair share of bad and ugly, so what’s good about it? Somehow, in the midst of a global pandemic, catastrophic weather events, and social and political discord, the real estate market is booming, largely thanks to historically low mortgage interest rates and changing homeowner needs. Daren Blomquist, Vice President of Market Economics at Auction.com, recently quipped, “The housing market is on a sugar high brought on by government stimulus and a pandemic-fueled rush to low-density housing.”
If The Good, the Bad, and the Ugly redefined the Spaghetti Western genre, what impact will 2020 have on real estate? As we prepare to put 2020 to bed and gear up for what we all hope will be a calmer, healthier new year, here are three ways the real estate business has changed in response to a challenging year – probably forever.
The good: Digital closings finally became a reality
The real estate industry has endured a 20-year crawl toward the promise of a digital closing experience, but the COVID-19 crisis finally pushed this languishing evolution across the finish line. With eSignatures, eDocuments, and eRecording already in practice for years, eNotarization finally saw wider adoption as states moved to legalize remote online notarization standards. As Microsoft CEO Satya Nadella put it, this year we saw “two years of digital transformation in two months.”
As a result of being able to work, shop, and even visit their doctors from the comfort and safety of their homes, consumers now have a taste of what is possible in our industry, writes Doma CEO Max Simkoff in a recent Forbes op-ed, “For the Mortgage Industry, There’s No Going Back to Our Pre-Pandemic Ways.”
“History will remember the disruption that led to challenges that were ultimately overcome,” Max said. “The hard part is already done. We realized that we could do it, and then we did it. Out of necessity, yes, but now that it’s done, customers have adapted to the new way of doing business.”
The bad: Work-from-home pitfalls
As we continue to adapt to the new normal, real estate agents have been forced to work remotely. Although some agents may already have been working at least part-time from a home office, many are simultaneously grappling with significantly altered home lives if their partners and children are quarantined or facing a lockdown with them.
Recently, Doma conducted a third-party survey of real estate professionals to assess how they are evolving their business operations. The findings underscore the need for real estate brokers to equip their agents with the tools and training they need to be successful:
- A worrying 43 percent of respondents reported an increase in their stress levels
- A third of participants admitted their processes have slowed due to pandemic-related productivity issues
- Only half said their companies have implemented new digital services, contactless customer interactions, and dedicated customer support functions
- Just 21 percent said the pandemic has prompted their business to embrace long-overdue innovation
Speaking on a recent Doma Ask the Expert webinar, Monica Pauli, San Francisco Founding Member of Compass, praised her company for providing associates with the tools they need to succeed in this challenging market, including producing a live comparative market analysis for clients and video property tours.
“If we were not with Compass, I just don’t know what we would have done,” Monica said. “The tools that Compass has been able to provide us during these last six months have just been so beneficial for us as agents. We have actually made more money during this pandemic. We are working smarter. We are not wasting the time that we used to waste.”
The ugly: The death of traditional networking
The business of real estate has always been relationship-driven, but lunches, happy hours, open houses, conferences, and entertainment and educational events have been reimagined as digital experiences. Webcam meeting platforms now play host to most professional interactions.
Virtual event attendance and satisfaction in particular pale in comparison to the pre-pandemic tradeshow experience. According to the Doma survey, a third of the real estate professionals polled admitted loneliness due to the lack of interaction with coworkers and colleagues, and 22 percent said they are excited to get back to hosting and attending in-person events.
As a result, real estate agents and brokers are finding it challenging to collaborate with their teammates and cultivate and nurture customer relationships. To counteract this alienation, Philip White, President and CEO of Sotheby’s International Realty Affiliates LLC suggested that real estate agents work to build their sphere of influence.
“Build a solid network, and get involved with the community you serve,” he said in a Realtor Magazine column.“While events may be on hold, offer to host webinars or support other online initiatives, and get on the phone to connect with other businesses that can help extend your reach. If a new business moves into your city, for example, reach out and offer to help with rehousing employees. This will solidify your value as a helpful resource – the kind that simply can’t be found online.”
Max noted that, ultimately, companies are in charge of their own fate. Those who adapt to the changes will find the buried treasure; those who do not will lose the battle.
“What began as an emergency response will become business as usual for companies that want to grab market share and ace the competition,” he said. “The companies that slide back into the old ways of handling transactions – those that assumed that their ‘proof of concept’ technological processes implemented in the face of COVID-19 were just a temporary crisis response – won’t be able to take on the high demand, and will likely fade away as they steadily lose market share to companies that have stayed the course and can take advantage of the boom.”