pandemic real estate

How The Pandemic Changed The Real Estate Experience

Business

11 minute read

November 24, 2021

Did you happen to buy or sell real estate in 2020?

If so, and this wasn’t your first rodeo, I’m sure you noticed a few differences between your previous real estate experiences and that of 2020!

Everything changed in 2020 as the pandemic threw us all for a loop, and the real estate industry was most certainly not exempt.

What began on March 17th, 2020, when the government ordered a lockdown changed the face of Toronto real estate forever.

Now, history will show that the largest change in our city’s real estate market as a result of the pandemic was a huge surge in prices.

But we know that.  We’ve been talking about it for twenty months now!

So how has the pandemic changed the real estate experience then?  How has the real estate industry changed?  How has the process changed?

The change has been immense.  Anybody who transacted in the past twenty months can attest to that.

Some of these changes are temporary and some are here to stay.

Let me break it down for you…

More real estate agents

Did you see this coming?  I sure didn’t!

Many of us have been watching the number of licensed real estate agents increase exponentially, and as that number rises, the quality of agents rapidly declines.  Many of us have also been waiting for a massive “cleanse” to the agent pool beyond the natural rate of attrition, and a worldwide pandemic where people stop working and the real estate market stops functioning should have provided that.  I would have thought if listings and transactions dropped 80% in April of 2020, and everything about how we work in this industry changed overnight, that we’d lose thousands and thousands of agents.

But I was wrong.

In fact, we ended up with more agents in the end.

There are a host of reasons why a person decides on real estate as a career, notably “getting rich” and “quickly,” perhaps “easily” as well.  But I also believe that many people lost their jobs during the pandemic, and a lot of these folks, figured, “Maybe now is the perfect time to go into real estate!”

There are currently over 68,000 agents licensed with the Toronto Regional Real Estate Board.

Two decades ago, there were barely 20,000.

I’ve written a lot of blog posts this past year about the inner workings of the real estate industry and the poor business practices that I’m seeing.  Monday’s blog post about two “experienced” agents who didn’t understand offer/acceptance and contract law was a great example.

I don’t set out to write these blogs, but with more and more poor experiences, I can’t help but write about them.

The pandemic allowed people to work on obtaining their real estate license from home, virtually, and I suspect that the already-low barriers to entry were lowered even further.  Sure, the education was moved from OREA to Humber College, and it was supposed to provide for more accurate and in-depth training.  But as I’ll explain in a subsequent blog post, whether this year or next, there really is no “training” anymore; just a course about real estate, which has nothing to do with the business or the day-to-day tasks within.

The pandemic made it very easy for people to get their real estate license, and it provided excuses galore for those who shouldn’t be licensed, to remain.

Is this change here to stayor is it a short-term by-product of the pandemic?

Sadly, this change is here to stay.

“Touchless closings”

I don’t pray, but my daily thoughts counted as such, then my prayers have been answered…

If you closed a purchase twenty years ago, I can almost guarantee that you answered your phone around 4:00pm on the day of closing, and your lawyer’s assistant said, “Congratulations, the funds have been transferred and the sale has closed!  Would you like to come pick up the keys?”

For years, the keys were handed from the seller, to the seller’s lawyer, then couriered to the buyer’s lawyer, where eventually the buyer would pick them up.

What a ridiculous process!

Consider the buyer who uses an out-of-town lawyer.  The keys are up at the office in Barrie, but that office closes early on a long weekend, and the buyers can’t get the keys for their Friday closing until Monday.  True story.  This happened to a buyer-client of mine years ago after I begged them not to use a lawyer from Barrie!

And during all these years, I’ve been suggesting, “Maybe we can leave one front door key in the lockbox, and the rest of the keys inside the house, and the buyer can pick up the keys AT the house on closing?”

Lawyers always hated that suggestion.  Maybe it’s because they wanted to maintain control, or maybe they actually thought this was a liability.  Regardless, nine times out of ten when I had previously suggested this as an option, I was shot down.

When the pandemic began, everything in our world was about “keeping distance” and “avoiding touching.”  So the idea of keys being in a lockbox at the property, and not having to be shipped back-and-forth, as well as the buyer not having to meet in person at their lawyer’s office, was a welcome notion!

Is this change here to stayor is it a short-term by-product of the pandemic?

This has to stay.  It just has to.  There’s absolutely no reason to go back to the way it was.

Sellers moving out during the listing period

Imagine that, pre-pandemic, you’re going to list your semi-detached house in the central core for sale.

One week on the market and you’ll have 75 showings.

How can you possibly live in the house during that?

I’ve always had my clients move out of the property, where possible.  If the sellers can’t come home until 9:30pm every night, then it’s almost pointless to live there.  And while a run-of-the-mill downtown condo, in a lukewarm market, wouldn’t necessitate the sellers moving out, I think that almost any freehold would.

When the pandemic came along, we did whatever we could to avoid interactions between people as well as people touching things that others might touch.  This meant sellers of a house or condo needed to move out for the listing period or risk coming into contact with buyers and buyer agents, and in April of 2020, that was a big no-no.  I actually think that some brokerages made it a policy to only list vacant properties.

Earlier this year, I had a couple of condominium listings that ended up topping 100 showings in six days.  And this is without “double bookings,” which you’ll read about shortly.  Again, there’s just no way that a seller can live through that!

How about not one, but two families in Bloor West Village, who lived across the road from each other, who sold two weeks apart?  Both were families of four with two children, and both moved out for the week.  One family stayed at an AirBnB around the corner, and the other moved further north with family.  How can you live a normal life, with 5:00pm dinner, 6:30pm bath, and 7:00pm bedtime when those are prime showing times?

No matter the property type, size, value, or location, it’s far more beneficial to sell a property when the owners aren’t living there.

Is this change here to stayor is it a short-term by-product of the pandemic?

As I said, I always look to move my sellers out of the house or condo, then clean, then stage, then photograph, then list.  One week on the market, offer date or priced for action in the first forty-eight hours, and nine times out of ten, they’re moving back seven days later.

I would like to think that more agents and sellers work with this strategy moving forward.

More privacy during showings

As is the theme in all of these points, we tried desperately when the pandemic began to minimize contact and interaction among people; buyers, sellers, agents, inspectors, et al.

Once upon a time, we’d see a red-hot listing on the market and eight agents would book an appointment from 6pm to 7pm, basically rendering that time period an unofficial open house.  Buyers and their agents would come and go, and half the time, you wouldn’t even know who had the key.

Home-owners do not want to read that last part, but then again, if you want to get top dollar for your home, then you need maximum exposure.  And if you need maximum exposure, then having a throng of buyers through your house isn’t a bad thing, and it might just come with the caveat of a wee bit of chaos.

When we started listing and showing again in April of 2020, somebody had the idea that there should only be one group through the house at a time.

“No Double Bookings” became the norm.

And while this made it impossible, at times, to get appointments, it sure provided for a lot more privacy for buyers!

Is this change here to stayor is it a short-term by-product of the pandemic?

If you’re a buyer, you love the idea of having privacy during a showing, but you also hate the idea that all appointment times are “booked up” when you want to go.  I can see a huge benefit to the former, but it’s outweighed dramatically by the latter.

Considering there are 18,000 people at a Toronto Maple Leafs game, I personally don’t see a problem within having two groups, or five people walk through a house at the same time while wearing masks.

The “no double bookings” rule is going to fade away very quickly, and I see it already happening as we speak.

Shorter showings

Along with “no double bookings” came “half-hour only” showings.

This begs the question: who booked more than a half-hour to view a property?

I suppose that when double-bookings are permitted, an hour-long showing isn’t an issue.  In fact, if there are showings booked on a house from 5pm through 9pm on a Tuesday night, and double-bookings are allowed, then it wouldn’t matter if an agent booked a four-hour showing from 5pm to 9pm!

But we assumed, because of the pandemic, that houses are always vacant, per point #5 above.

In a “normal” world, where sellers do live in the house and where there are not appointments booked 24 hours per day, we can’t have buyers and their agents show up whenever they want.  If a buyer books from 6pm to 7pm, and the seller leaves for that time period, the buyer can’t show up at 7:30pm!

The purpose of hour-long showings had less to do with the buyer actually spending an hour inside a 500 square foot condo and more to do with an agent and a buyer having to navigate traffic, and coming and going to and from other listings, thereby necessitating a more flexible viewing window.

When the pandemic came along, it was chaos downtown.  Imagine a hot listing where there are appointments booked every half-hour from 4pm through 9pm, and that one annoying agent, with a 5:00pm – 5:30pm appointment, shows up at 6:05pm and gets to the key ahead of the agent who has the right to that time slot.  This happened over and over again, and on the listing side, I argued with these agents over and over.  “It’s not my fault I’m late, the traffic was terrible,” they would explain.  With every agent who went to the property outside his or her window, it merely screwed up the rest of the schedule.

Sadly, agents were not equipped to deal with the change from an hour-long showing to a mere half-hour in many areas of the city and in many market segments.

Is this change here to stayor is it a short-term by-product of the pandemic?

If and when we allow “double bookings” again, I have no problem increasing showing windows from a half-hour to an hour.

I hate bending over backwards to adhere to the problem agents, but that’s actually in the best interests of my seller clients if we want maximum exposure.

No more open houses

What’s the purpose of an open house?  I mean, really?

The number-one reason why, historically, we held open houses was to allow for “foot traffic.”  Those casual buyers who might see the house if it fits their schedule, those people who weren’t in the market at all, but came through the house because it was open, and those buyers who didn’t want to “bother” their buyer agent on the weekend – these three types of buyers are the reason why we hold open houses.

But the number-two reason why we hold open houses is because that’s how many new agents look for business.

You’ve probably noticed that most listing agents don’t host their own open houses.  On Saturday and Sunday afternoons, I’m typically doing showings with buyer-clients, or meeting with sellers to discuss their listings.  To be honest, I don’t ‘need’ to be present at the open house for my listing.  My value is not in standing in the living room smiling at people as they come inside.

But new agents love working open houses, and for the last twenty months, new agents have been deprived of this source of business.

So then…

Is this change here to stayor is it a short-term by-product of the pandemic?

Well, if not for the very reason that there are tens of thousands of agents champing at the bit to put their sandwich-board sign out front of a house and meet-and-greet a dozen prospective buyers, I would say that yes, open houses are coming back.

But that’s why I think agents want open houses back.

In terms of whether it’s in the best interest of sellers, I still think it is.

Any time you can expose your house to buyers, whether active, passive, or potential, it’s worth doing.

Pre-pandemic, lots of buyers bypassed their agents and simply drove around on the weekend going in and out of open houses.  That’s how they chose to view listings, and if any of those buyers skipped viewing houses during the pandemic because of the absence of open houses, then it’s reason enough to bring them back.

We’re already seeing open houses making a comeback.

It won’t be long before they’re fully back to pre-pandemic levels.

No more in-person “offer nights”

This is the greatest thing to come out of the pandemic, as far as the real estate industry is concerned.

Whether it’s ten years from now, or even tomorrow, a time will come when we say, “Can you believe we used to present offers in person, and wait outside the house in our car for five hours?”

Hindsight is 20/20, but this is one we should have seen coming.

Many of you have sold real estate before and can remember a time when buyer agents paraded through your house or condo at 7:00pm on “offer night,” to present their buyer-clients’ offers.  Perhaps some of you enjoyed the process, while others might have simply enjoyed the conclusion.

I have probably presented five-hundred offers in person.  That sounds like a lot, but it could be more.  I honestly can’t do the math on this one.

But is there a need to present in person?

It depends on whether you’re looking at this from the perspective of a buyer, buyer agent, seller, or seller’s agent.

As a buyer’s agent, I loved presenting in person.  I need access to the seller and the agent.  There’s always something I can pick up from the reaction of the seller, or in conversation with either party.  I need to be able to look the listing agent in the eye and talk to the one-on-one.

A lot of this business is based on relationships.  With 68,000 agents, you’re bound to find agents that you like dealing with more than others.  In a market where transactions can be complicated, it’s important to find that “friendly face” on the other side who you can trust.  As a result, I’ll routinely gain an advantage by working directly with a listing agent, especially if I know them personally, and can present my offer in person.

As a seller’s agent, it’s the complete opposite.  I want offers emailed.  I don’t want buyer agents speaking to my sellers.  I want full control.  I want it all virtual.

When I under-price a listing and end up with twenty-one offers, there’s bound to be ten that are garbage.  Tell me, “David, that’s your fault,” but we’ve discussed this, and I blame buyer agents for not understanding the market.  To have twenty-one agents parade through a condo, with half of them presenting a conditional offer of the list-price, is a waste of my sellers’ time.  When I set an offer day and time of 7:00pm on Thursday, if I receive twenty-one offers, I’ll have eighteen of them before 7:00pm.  It’s magical.

Is this change here to stayor is it a short-term by-product of the pandemic?

I do believe that some agents will choose to hold “in person” offer presentations again, but I won’t.  Never again.

Pre-pandemic, I had already started taking my “offer nights” offline.

I only hosted in-person offer nights for the higher-end properties where I wanted buyer agents to see other buyer agents in the lobby of our brokerage so they knew who was playing, and to see one another’s luxury cars in the parking lot to play to their egos.  Short of those listings, there was simply nothing to be gained from holding offers in person, and I actually felt that I could lose out, if a buyer agent saw another buyer agent angrily get in their car and drive away, or overhear a call with a buyer, etc.

I’m sure there are other “changes” in the way we do business.  It’s tougher to be thorough at a house or condo when you’re not supposed to touch surfaces and open cabinet doors.  It’s tougher to book pre-inspections when there are no double-bookings.  Fewer agents are working out of the physical brokerage.  And on, and on…

But those changes noted above are the most impactful, and maybe this is me looking at my glass half full, but I think that the pandemic helped us to make a few solid changes that better the real estate experience, and undoubtedly make it more efficient.

Written By David Fleming

David Fleming is the author of Toronto Realty Blog, founded in 2007. He combined his passion for writing and real estate to create a space for honest information and two-way communication in a complex and dynamic market. David is a licensed Broker and the Broker of Record for Bosley – Toronto Realty Group

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2 Comments

  1. London Agent

    at 11:02 am

    68,000 agents lol

  2. Appraiser

    at 6:02 am

    “Secondary buyers — the investors — they’re making investments to generate a return. That’s a free-market economy, more power to them…They’re recognizing there is that forward price pressure and so they’re jumping in to profit from the run up. That’s the way markets work.”

    “If we correct the supply-demand imbalance, you’ll start to see, in my judgment, that zeal (and) that froth start to dissipate. I think residential mortgage credit will become less of a threat to our system.” ~Peter Routledge, Superintendent of Financial Institutions

    Routledge added that he thinks those investors might eventually be dissuaded whenever balance is brought to the market.

    “If we correct the supply-demand imbalance, you’ll start to see, in my judgment, that zeal (and) that froth start to dissipate. I think residential mortgage credit will become less of a threat to our system.” https://www.bnnbloomberg.ca/household-credit-risk-growing-more-fragile-osfi-1.1686699?taid=619e712378586b0001235177&utm_campaign=trueAnthem+Manual&utm_medium=trueAnthem&utm_source=twitter

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