Covid-19 the game changer for real estate
MAIN IMAGE: Herschel Jawitz, CEO Jawitz Properties; Xoliswa Tini, principal Xoliswa Tini Properties; Adrian Goslett, regional director and CEO RE/MAX Southern Africa
The Covid pandemic forced a rethink about traditional real estate practices like show houses, offices and neighbourhood drives with buyers. Has an invisible virus changed for good the way we market and sell our homes?
It was only a few months ago that the preferred operational model for some of our top estate agencies was still one with an office where agents could enjoy social interaction with their teammates and source new business from ‘walk-in’s’. The show house was still touted as an essential marketing tool and most of all, estate agents cherished spending time with sellers and buyers to build a relation of trust and to better understand their needs.
Then came the COVID pandemic and lockdown and everything changed. Offices had to close and real estate agents work from home. This necessitated all to focus on the use of available online technology to keep in touch with clients and each other, to provide virtual access to listed properties etc to remain in the game. The question is, is the usual way of doing business now gone, perhaps for good?
The prescribed COVID-19 protocols during level 3 lockdown necessitated a new way of doing business for most businesses including real estate. All client engagements must conform to the need for social distancing and limit opportunities for exposure to the virus. Consequently, Hershel Jawitz, CEO Jawitz Properties, says he expects to see a shift from a ‘high touch, high engagement’ relationship between an agent and their clients to a ‘lower touch high engagement’ relationship. “There will be a new normal in the Corona and post Corona real estate world. The shift from the high touch to low touch is where the real shift is already taking place from both a health and efficiency point of view. Covid has forced real estate companies to move quickly to protect the health of their people and their clients.”
“Covid-19 has just forced agents to up their game in the marketing space. Things will never be the same like the way they were before,” says Xoliswa Tini, principal of Xoliswa Tini Properties in Gauteng.
Dr Andrew Golding, chief executive Pam Golding Property group, says being just three weeks into a ‘new normal’ is perhaps too soon to judge whether the trends we are seeing will be part of a new and more permanent trend or trends.
1 Virtual show houses vs traditional show houses
Even before the pandemic there had been growing discomfort with the traditional show house. The rise in incidents with opportunistic criminals led to some agencies dropping the show house as marketing tool completely for the safety of their agents and sellers.
Also read: Has SA become too unsafe for show houses?
During the lockdown many agencies added video with voice over or 3D virtual tours to their listed properties – a move that has proved popular with buyers. Virtual tours done by a professional videographer is now part of the standard marketing tool kit of many agents. Paul Stevens, CEO Just Property, says they found that virtual tours were incredibly well-received by sellers, primarily because it is more impressive than traditional photography alone. “It looks more professional to sellers and allows potential buyers an opportunity to get a better “feel” for the flow of a property,” he says.
However, in level 3 there are estate agents who are again advertising show houses (allegedly mostly small independent agencies). This has some of their colleagues worried about the risk of COVID-19 infection this poses for all involved.
The guidelines of the Estate Agency Affairs Board (EAAB) doesn’t specifically* prohibit the hosting of show houses per se but do list a number of safety requirements to adhere during the physical viewing of a property. These include limiting the number of people shown about a property to two, compulsory wearing of face masks, use of hand sanitizer before entering the premises, keeping the viewing brief, proper ventilation, recordkeeping of all visitors, no touching of surfaces and prior consent from the occupant before the viewing.
Rebosa’s guidelines recommends that agents only do physical viewings on appointment.
Golding says in the current COVID environment and with reference to the guidelines and regulations, physical viewings are effectively only possible ‘by appointment’. “This infers that the days of multiple buyers visiting a showhouse at the same time are certainly not going to be possible for some time and that the new show house of the future is essentially a house on show by appointment,” he says.
Gerhard Kotze, managing director RealNet, says virtual showhouses and video viewings help estate agents to work smarter. “Most reputable estate agencies have upped their game to effectively profile properties online and he expects this trend to continue because both sellers and buyers find it more efficient and convenient – and because the technology available to conduct client consultations and remote viewings is becoming ever more sophisticated and accessible,” he says.
2 Working from home vs the traditional office
During lockdown estate agents had no choice but to work from home as offices were closed. After two months many agencies have now realised that this way of working can work and also, that it is in many ways more cost-effective. Adrian Goslett, regional director and CEO RE/MAX Southern Africa, says initially many of their agents felt there was no way they could operate from home, yet, many adapted to find new ways to connect with clients and to conclude sales with suspensive conditions.
Berry Everitt, CEO of Chas Everitt International Property Group, says also says their agents had great success working from home during the lockdown. They kept in contact with their clients, found potential buyers and tenants, set up virtual viewings and show-days and organised home loans and signed deals worth millions of rands, all from their own homes.
The ‘zoom culture’ of online meetings and webinars have also made having a large office space less crucial. Does this mean the end of the office? Not necessarily, but there is a trend towards smaller offices and less office staff. Pam Golding Properties recently announced that they are reorganising their head office and branch offices as well as reducing their staff complement “to bring it line with realities of the economy and the new real estate market going forward,” says Golding. Tini also says because they now do training and meetings remotely, they no longer need offices nor big spaces to operate from.
3 Highly accessible digital resources
Digitisation has been knocking on the door of the real estate industry for some time. The general consensus is that the pandemic has now hastened the digitisation of many aspects of a property transaction, but it hasn’t replaced the estate agent. Like Everitt says they never sought to automate the agent out of the transaction, but they did anticipate “the growing need to liberate principals and agents from desks and offices and specific sales areas”, and so they built their systems accordingly. “These enable principals to reduce overheads and agents to retain more of their commission, and during this crisis, they have more than proved their worth in enabling people to work completely remotely, just using a laptop or a cell phone, and still deliver a quality experience to their delighted clients,” he says.
Traditional real estate at its’ core has always been about building a good relationship with the client and providing a high-end quality service to meet their needs. That hasn’t changed even though it has become necessary to adopt new methods to achieve these means. The principle of real estate remains the same, it is the medium of communication that has changed says Jawitz. Estate agents will need to make sure that they are able to provide regular and meaningful information to their clients to allow their clients to make informed decisions.
“The ongoing communication between the agent and client is going to be even more important than before especially in the current market where the gap between sellers’ expectations of price and buyers’ sense of value is high. Negotiating a deal is very different over a zoom call than in a client’s living room,” says Jawitz.
Everitt continues that people don’t want to be just a number who receives generalized advice in an automated system. “They want to connect with a human who listens to and understands their particular needs – and then is able to access superior technologies to really help them save time, money and inconvenience. This means that estate agents, and the principals and companies behind them, are going to have to ‘step up’ now as never before if they want to win clients and achieve and maintain success,” he ends.
How have buyers and sellers responded to the ‘new ways’
Most estate agencies report that their clients have been very understanding and have responded positively. Goslett says their feedback both locally and internationally has been that clients have been remarkably adaptable to conducting business through online conference platforms such as Zoom and Google meet. “Why? Because it provides added flexibility around their busy schedules. This also saves agents time as they do not have to drive across town to meet various clients,” he says.
Going forward …
From the decision to sell a home to the final transfer to the new owner, a property transaction is multi-dimensional and involves many steps, which require specialised expertise in a number of different disciplines including area knowledge, accurate valuations, pricing strategy, marketing, finance, legal and conveyancing, to name a few.
As far as the question of new models versus traditional real estate is concerned, the lockdown has seemingly hastened the convergence of a number of trends, firstly the rapid digitisation of the real estate transaction and secondly the requirement for the definition of the value proposition of the traditional agency model.
“In our view the agency of the future marries the best of technological improvements in efficiency and time through digitisation with the added value of the best of traditional agents and agencies in the form of their personalised service offering, knowledge, skill and experience,” ends Golding.
(*Added specifically to make it more clear that the EAAB guidelines don’t prohibit hosting show houses by name although proper adherence to the guidelines would make hosting one impossible. Ed.)