Trying to Buy or Sell a House in Philly Right Now? Here’s What to Expect
If you’re in the market to buy or sell a home in the midst of the coronavirus crisis, there’s no reason to sit on the sidelines, several local agents say. But there are some changes in the process you will need to take into account.
At least as of now, the real estate market hasn’t disappeared completely the way the travel market has. People still need to move for various reasons, and there are still people who want to sell their homes and rent apartments.
The reasons vary on both ends. Some buyers may have accepted job offers that remain valid and need to move to a new city. Some sellers may have already moved elsewhere and can’t afford to let their old houses sit until the storm passes. Still others may find themselves with a sudden need for more space now that their relatives are back under their roof, and others may want to go ahead and downsize to save money.
The good news is: It’s possible for all of these people and others to find a house that suits them. But the process of getting that house has changed somewhat.
For buyers, Jeff “City” Block, founder of the City Block Team at Compass Pennsylvania, has this piece of advice for starters: “This is true under any circumstance, but what you need especially now is a buyer’s agent who is knowledgeable, who you can trust, and who can talk through the issues with you.”
Once buyers have found their guide through the current market, says Philly Living CEO Noah Ostroff, they will find that they are actually in a great position.
“Interest rates are at historic lows, so buyers have incredible buying power right now,” he says. “Also, other buyers might be scared, so there may be less competition for the available homes that might have had bidding wars on them just a few weeks ago.”
One of the biggest changes for buyers: It’s going to be all but impossible for you to actually see the house you’re interested in. Instead, you will have to use technology to get in the door.
Agents’ views on how well that technology works vary. “We can’t do showings, which makes things a bit challenging, but we have great video, and the technology improves things,” says Andrea Desy Edrei, one of the partners at Black Label Keller Williams.
Block also uses technology as well to bridge the showings gap, but isn’t as impressed with current 3-D tour options: “It makes the house look distorted,” he says. “It makes people not want to see the house. High-resolution photos, on the other hand, make you want to see the house.”
And those photos can be found on many real estate agents’ own websites. Some sellers of vacant houses, however, have allowed individual buyers to visit them without their agent: “While it might technically violate the stay-at-home order, it is safe practice,” says Block.
The social distancing restrictions that make it impossible for agents to show houses to buyers will also make it impossible for home inspectors to do their work. And for sellers, it means they can’t get their homes professionally staged for even virtual showings.
And even more important: It means that appraisers have to conduct drive-by or desktop appraisals. These factors and other requirements will make closing the sale harder, but not impossible.
“You can still get a house under contract, but you may need to get creative,” says Edrei. “For instance, you could enter an agreement and then stipulate you will get the inspection later.” To facilitate such agreements, the Pennsylvania Association of Realtors has created an addendum, called “Form COVID,” that the parties to a sale can use to extend deadlines if parts of the agreement cannot be completed in the usual time.
And while a number of agents have managed to close sales entirely via online transactions, the real estate industry is lobbying Gov. Tom Wolf to add real estate offices to the list of businesses allowed to operate during the stay-at-home order in order to facilitate closings.
Buyers right now will likely find very motivated sellers willing to make deals on price. Block says that cash buyers will likely find sellers willing to accept less than their asking price, for instance. But they shouldn’t expect to see dramatically lower prices. “There are buyers who think that because the stock market has dropped, the housing market has done the same,” Edrei says. “It really doesn’t work that way.”
Yet while there remain many sellers who want to move their homes right now, many others have chosen to wait. “Many properties that might otherwise be on the market are being held up or delayed,” says Block, who estimates that as many as 80 percent of potential new listings sit in limbo right now. Were he advising a buyer, he “would set up a search for them and let them know that this is a very small percentage of what will be available down the road.”
There are neighborhoods in the city, however, where sellers really don’t need to wait, he continues: “If I got a four-bedroom house with a garage in Fitler Square for $1.4 million, I could sell it in a minute. The same thing goes for just about anything in the Penn Alexander catchment.”
And in general, especially at the upper end of the market, Edrei says that sellers shouldn’t be afraid to list their houses right now. “I’ve been surprised at the inquiries I’ve been getting,” she says. “People are getting bored. They want to get out and look at houses, and they’re considering buying.”
Ostroff also recommends that would-be buyers not sit and wait for the coronavirus storm to blow over. “In the local market, people are still buying and selling homes,” he says. “There may be only a small window of time right now when interest rates are this low and sellers may be willing to be more flexible on their prices. It may not last forever, because those two things usually work counter to each other.”