Earlier this month, with the help of Diane from Keyes.com, we talked about how to sell beachfront property. We discussed the fact that it’s a dream for many people to own beachfront property because summer awakens thoughts of basking in the sun and frolicking with family in paradise. It is also the busiest season when selling or leasing real estate along the water.
On the other hand, let's face it, COVID-19 is not going away anytime soon and it has made living that dream a bit complicated. It is challenging to travel, inhabit or enjoy the carefree lifestyle that a beach house offers. Grrr – Life is indeed, a B#@ch for many frustrated buyers, vacationers and investors.
How can you cope with this new reality and keep selling? Let's continue our conversation with Diane, who knows the ins and outs of selling waterfront properties during the pandemic.
New Tools for Business
The new reality is anything but normal yet, as this article about Canadian real estate emphasizes, but thankfully, we have a lot of technical tools available to keep our businesses running. One thing remains obvious: you have to connect with your client and follow the new ways dictated by pandemic measures. But how?
You can’t take your customers for lunch or shake their hand, however, you can still show your expertise by knowing the market, doing your homework and providing a seamless service.
How has the pandemic changed the way you do business?
To identify what has changed due to the pandemic, we interviewed a realtor, Diane from Keyes, to share her experience with us in the beachfront property market.
She told us that during this pandemic, she basically did business as an avatar and has incorporated some tips that make her clients feel comfortable and safer.
According to Diane from Keyes.com, buyers are loving the shopping-from-home, video-interaction, home-buying process! They can cover a lot more ground with video and only choose to physically visit a handful of properties, (following the strict COVID guidelines) before they make a final decision.
Aside from her active presence on social media sites, she also uses email for monthly newsletters and connects on Pexip, zoom, and gotowebinar platforms. She has even have started adding ALT text to her advertising photos to accommodate the visually impaired. Good idea, don't you think?
Meet “RON”, Remote Online Notarization.
As far as the actual purchase/sale transaction is concerned, the majority of legal and financial documents required in buying and selling real estate, have been e-signed for years; as have international and military real estate purchases and sales.
RON became legal in Florida as of January 1, 2020, and settlement service providers have rushed to adapt, in order to provide a safe environment for real estate closings. RON uses audio visual techniques to complete notarial acts, so that the principal and the notary don’t have to be in the same physical space.
With this in mind, Diane provides instructions, explanations and all the necessary documentation to her clients via chat and email.
Agents and clients alike, can expect (and should require) that the process of purchasing real estate will adjust to COVID-19 concerns as they ebb and flow.
Challenges in Property Transactions
Insurance has been the biggest issue!
Rates have risen at least 15-20%, so buying a new house now, as opposed to buying one last year, means putting aside 20% more to cover monthly payments. Now that we are in hurricane season in Southern USA, it is best to bind any available policies into place because you don’t want a hurricane to hit while you are trying to close!
Diane's advice to clients who want to keep their insurance rates down, is to keep their roof in good condition. If it has less than 3-5 years of life expectancy, or is from prior to the new building code of 2003, insurance costs will go up. Mitigation features like windows and garage doors and green protection credits also have a big impact on lowering insurance costs.
Waterfront housing market affected by Jumbo loans
Diane gives us insight:
The waterfront housing market has been negatively affected because Jumbo loans (over $510,400.00 for 2020) have been under considerable stress. A down payment of 20% and good credit seems to get clients through the door but closing timelines go out 45-60 days (compared to from 30-45 days pre-COVID), yet deals are still closing daily. The Florida Realtors COVID addendum is utilized to cancel or extend contracts.
"People have lost jobs and 401k’s, spent their savings and suffered loss of income from rental properties because tenants are having the same issues and can’t pay rent. Evictions have been on hold for months in Miami-Dade and Broward counties, and last I heard were starting up again in August. Miami-Dade vacation rentals were shut down in March, reopened in July, and shut down again when COVID cases started rising," Diane reports.
Adjusting finances
Diane shares that refinancing has been a great option for qualifying homeowners.
The historically low rates help owners to get money back so they can pay their bills and not have to downsize. Web closings are being held for US citizen and resident sellers via Notary Cam. Jumbo loan transactions and cash buyers are signing via DocuSign, although some FHA, Fannie May and Freddie Mac transactions still require a wet signature.
Moving Forward
The business of buying and selling real property will carry on even though frustrations are high, as many people are found sadly checking off those precious summer days on the calendar from within the shadowy confines of their home or country.
Sunny summer dreams are still alive and well in all of our imaginations! COVID has created a heightened need for parties to carefully consider their contractual terms and there is also an expectation that both the agent and the client will continue to see practical solutions to the concerns raised by the pandemic.
Encourage your clients that the tranquility and appeal that makes beachfront property so desirable, will hold true past the pandemic.
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More about Diane@Keyes
Diane is a dedicated, full-time, professional Realtor® whose prior legal, paralegal and property management experience in the real estate industry makes her well qualified to guide you through the process of buying or selling your home.
Diane's attention to the myriad details of the transaction process, and knowledge of contracts, negotiations, and marketing all work to her client's advantage in ensuring that that very important transaction goes through timely, seamlessly, and with the least amount of involvement and stress on her client's part!
