Maybe one day, everything from viewing a house to signing a contract can be done online.

 

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Editor’s note: In New York State, the real estate transaction procedures that previously required personal inspections and personal contracting had to be changed due to an epidemic. Will cloud viewing and cloud buying become a new trend? This article is from the New York Times, author Stefanos Chen, the original title is “Homebound Buyers Ask: Is a Picture Worth $ 1 Million?”.

The trend of “cloud buying a house” caused by the epidemic

For a long time, it seems that the real estate field has not been able to catch the free ride of technological development: real estate transactions require on-site inspections by sellers, on-site measurements by designers, and appraisers need to report to the valuation after inspection in the house. Buyers sign the contract face-to-face, and then a transaction can take effect.

But the epidemic changed all that.

Today, when the public is not allowed to work, the real estate industry has begun to reconsider its trading model.

In New York State, where the epidemic is severe, every step of a real estate transaction is strictly restricted: buyers cannot see the house, and moving workers cannot get out. If you want to buy a house, you can only rely on the video “cloud to see the house”, and then complete a lot of paperwork through real estate staff and lawyers, and directly complete the sale online.

Picture from Unsplash

Alex Varnrock, the sales manager of the New York Exchange Building (now a high-end apartment in New York), said that during the outbreak, many potential customers were unable to visit the house in person The team had to urgently record 52 small videos within 2 days to show the seller what the house looked like. They expect that they will not be able to enter the office any more soon, and subsequent transactions will be completed at home.

In the near future, “virtual viewing” will become a new trend. According to data from StreetEasy, a real estate website, from March 15th to 30th, more than 2,000 sellers attached recorded room videos when posting New York City rental information on the site. This data is2.5 times over the same period.

But Frederick Warburg Peters, the chief executive of the real estate company Warburg Realty, believes that virtual pictures or videos can never really replace a room in person. “A picture can at most replace the 1,000-word description, but visiting the house in person allows you to ensure that your $ 1 million is well spent.” He predicted the number of contracts his company signed in the second quarter Will drop by 70% compared with the same period last year.

Online transactions still have difficulties

After the market peaked in 2016, housing prices in New York have been falling. It is estimated that the pandemic will further accelerate the downward trend. New York real estate appraiser Jonathan Miller said that it is not yet possible to predict to what extent house prices will fall, but since the September 11 attacks and Lehman Bros.’s 2008 bankruptcy filing, New York property prices have fallen 25% -30%. And now taking advantage of the epidemic, many buyers have begun to re-negotiate housing prices with real estate agents.

Since mid-March, New York City has banned buyers from visiting apartments, but allowed them to visit houses “online” via video. For many potential buyers, this does not seem to make a difference: even if there is no epidemic, many apartment buildings in New York are prohibited from strangers.

For those who want to apply for a real estate mortgage, some lenders agree to sign contracts without physically inspecting the house. However, in view of the unpredictability of how much housing prices will fall after the epidemic, this procedure of housing mortgage is also more difficult. New York State now agrees that both parties will not sign a physical contract (only an electronic contract is required), but it is currently unknown how many banks can accept such electronic contracts.

In addition, the process of “online property transactions” is also full of challenges. When the real estate agent cooperation board is meeting online, the pet dog in the house rushes to the screen; or when the buyer wants to look at some corners of the room, the agent points the camera at himself. If you want to make online real estate transactions smoothly in the next few weeks, these problems must be improved.

Real estate trading interrupted by the epidemic

In the first quarter, the median real estate price in Manhattan was $ 1.06 million, a 7% decrease from the peak of the market in 2016. The surge in sales in the early part of the quarter showed signs of a recovery in the market, but a virus stopped almost all transactions.

Brissa Harris Stevens real estate agent Lisa Lipman said: “Everyone is waiting for the bad news to come, and now the bad news is finally here.” She believes that in the context of the soaring unemployment rate and the stock market crash, The real estate market will suffer a major blow.