The COVID-19 pandemic has accelerated the digital shift across a variety of industries, and the real estate industry is no exception. Since the spring of 2020, the homebuying experience in Boston has continually evolved due to ongoing health and safety regulations. Now that social distancing and mask guidelines have officially been lifted and Fenway Park is back to full capacity, things in Massachusetts are looking as close to normal as they have been since early 2020. The fact remains, however, that the pandemic has left an indelible mark on many aspects of our society. Experts are now wondering whether pandemic-era homebuying practices might be here to stay.
The Virtualization of Homebuying
Throughout the past year, our society underwent a rapid virtualization unlike anything we’ve seen before- from remote work and school, to virtual entertainment and digital banking. We also saw a shift in the way people began to search for, view and purchase homes. According to TD Bank’s recent survey of over 1,000 homebuyers planning to purchase their first home in 2021, 78% of buyers noted they are using or may use a home listing website to look for homes, and almost half (43%) noted that they plan to use recommendations from these websites to find a lender. nearly one in four buyers (22%) said they would purchase a home without ever seeing it in-person!
The ease and convenience of the digital homebuying experience is hard to refute. Browsing and shopping for homes online can be done in a buyer’s free time from anywhere in the world, and buyers can even take a virtual tour right from the comfort of their own couch.
While online home listings are a great starting point, they often do not tell the full story. A virtual viewing only gives buyers a look at the actual home and if applicable, the yard, deck, porch, etc. It’s hard to get the feel of a particular neighborhood or town online, which is often a crucial element in pursuing a home purchase. While its rare, scams do exist as well.
Ensuring Expert Guidance by Meeting Buyers Where They Are
Regardless of the lifting of restrictions, some buyers may still not be comfortable meeting in person or have simply become more dependent on digital options (especially for digital native age groups like Millennials or Gen Z).
The ease and availability of digital resources can’t be understated. There is a wealth of information online for homebuyers to consult between home listing sites and personal finance blogs that can provide a helpful start. However, these don’t take into account an individuals’ personal financial situation the way a realtor and lender can. Homebuying professionals need to ensure they are having personalized conversations with homebuyers as early on in the process as possible – whether they are occurring via Zoom or in the office.
In the greater Boston area, home prices continue to rise due to low supply and increased demand. The market isn’t getting any easier to navigate – and lenders and realtors can make sure they’re guiding customers from the start, despite any logistical challenges. In a 1:1 conversation, a realtor will be able to better educate first-time buyers on the availability of homes in a price range that aligns with their unique financial situation and point them to a lender who can advise on the intricacies of successfully applying for a mortgage.
These conversations should also be happening as soon as possible. TD’s survey found when asked about the best time to engage with a lender, nearly one third (30%) said they first spoke with a lender after finding a home they want to buy. Further, 80% of respondents say they have not spoken with a lender yet, despite the intent to purchase a home this year. Leveraging the help of an expert throughout the process will increase the chances of a buyer being successful and securing a home they love.
Mortgages, But Make It Digital
In addition to assistance with finding a home, professionals need to be sharing insight with buyers throughout the mortgage application process. Prior to the pandemic, digital mortgages were already becoming increasingly popular. Now, due to the pandemic, 45% of homebuyers said that they are more likely to apply online. While starting the mortgage process online can be time-saving and convenient, as mentioned previously, this shouldn’t be the first time buyers are reaching out to a lender.
Additionally, opting for a digital mortgage does not pigeonhole buyers into a completely computerized process. Many lenders offer hybrid options, where buyers can fill out as much as they would like to online, but have lender resources available if they need to speak to someone directly.
Realtors can help to stress that a professional can educate buyers on the crucial aspects of the mortgage process, like necessary paperwork, timelines, insurance and more. When buyers are more prepared and can move quickly, it’s a win-win situation for all parties involved.
Maryruth Ryan | Regional Mortgage Sales Manager | Maryruth.ryan@td.com