These days business as usual looks a little different. Stay-at-home orders, social distancing, and other efforts to slow the spread of COVID-19 make some in-person activities more difficult. Showings and open houses are a bit of a challenge for sellers, buyers, and their real estate agents. We’re hearing questions about whether buyers can have their agents go to showings or open houses without them, photograph or video-record the homes, and share the results with the potential buyers. Some have proposed having agents live-stream while walking through a property and talking with remotely connected buyers. All these options exist, so long as you address certain concerns.
There are primarily three sets of concerns to address: seller concerns (which they generally share with their brokers); buyer broker concerns; and buyer concerns. This post provides some considerations for addressing seller concerns. It provides tips for MLSs, brokers, and consumers, but it’s not meant as legal advice. If you need legal advice, consult your counsel. This post assumes that virtual showings and open houses are conducted in a manner compliant with all applicable federal, state, and local orders and restrictions. A subsequent post will discuss buyer broker and buyer concerns.
Risks associated with showings
Typically, sellers anticipate that having their property for sale means having it available for showings, open houses, broker tours, and the like. Buyers and their brokers can come in-person to look at most listings just by making an appointment—no special arrangements are necessary. Those appointments may be scheduled via the MLS’s showing scheduling software and access to a property obtained via a lockbox. For some kinds of listings, in certain markets, listing brokers may screen buyers more carefully before permitting showings and listing brokers may even accompany buyers and their agents.
There is always some level of risk with making your property available for showings. Key risks for sellers and their brokers can depend on whether the listed property is occupied. For example, if the property is unoccupied, knowledge of that fact by the general public could result in someone attempting to squat on the property, potentially damaging it and any furnishings left or staged within.
If the property is occupied, additional concerns can arise. What if the buyer is really a criminal trying to “case the joint,” and hoping to come back later and burgle it? Or, what if the buyer carries pathogens that pose a risk to the health of the residents (a concern now especially relevant in the COVID-19 era)? During showings, it is likely that the buyer or her broker will make physical contact with surfaces in the house. Does that contact now create circumstances that could endanger the residents by, for example, sneezing in the kitchen?
Assuming that normally the seller’s listing would be marketed so that buyers’ brokers can just make appointments and show it in person, the risks of allowing the buyers’ brokers to do a ‘virtual showing’ instead (by taking photos, making video recordings, or live-streaming) are more or less the same as those for traditional physical showings, except in one respect: The resulting media from the virtual showing might be distributed beyond the buyer and her agents. In other respects, the buyer potentially has less freedom to engage in misconduct in the property, and fewer people are present to bring pathogens into an occupied home.
Addressing virtual showing risk
There are two ways of addressing issues related to distributing the media. One is not to worry too much. After all, many listings are already visible on the internet with a great many photos, sometimes depicting the same bathroom from six different angles (though why that would be necessary, I cannot say). Anyone trying to surveil the property to determine if it’s occupied could already probably figure it out (assuming the photos displayed on the internet are current).
The second way to deal with media distribution concerns is in a lawyerly way: Constrain the parties with agreements. The seller could insist that—as a condition of virtually ‘showing’ the property—the buyers’ agent must agree that any resulting media can only be distributed to the buyers, and buyers must also agree not to distribute it beyond that. Sellers could also prohibit buyers’ agents from creating any media at all, as long as they understand the marketing consequences.
Suggestions for listing brokers and MLSs
Listing brokers could assist their sellers by having a standard form for instructions about media that buyers’ agents create during showings or open houses. MLSs could help listing brokers by creating the form and having applicable fields in the MLS system. MLSs might also consider adding common restrictions to the Showing Requirements field in the MLS system. MLSs could also provide guidance to listing brokers about how to add restrictions to the Showing Instructions field. Larger brokers and MLSs might also assist by creating a form or forms that buyers’ agents can use to secure the buyers’ agreement not to distribute media further. Finally, MLS might have a rule or rules that make it clear that buyers’ brokers must comply with any restrictions that the sellers’ brokers has identified in MLS. The consequences of non-compliance could be significant, owing to the security and health concerns involved.
In the COVID-19 era, sellers might want to require visiting agents (and their buyers, in the case of permissible in-person showings) to comply with all CDC safety protection measures, for example, by wearing a mask while visiting the property. Sellers might also like to take certain steps after any showing to address concerns about pathogens. This could be as simple as wiping down key surfaces with disinfectant wipes after each showing. It could also mean restricting showing times to certain intervals, after which the sellers might engage in more thorough cleaning. Listing brokers might want to offer sellers assistance or guidelines in these respects, and MLSs could conceivably offer help to the brokers.
As we continue to navigate the COVID-19 world, virtual showings and open houses will likely increase as they facilitate the marketing of listings. Hopefully, you’ve picked up a few useful tips to addressing a seller’s concerns regarding virtual showings.
Thanks for reading part 1 of this series; next up will be a post on addressing buyers’ and their broker’s concerns.