With the Corona exit restrictions, you also got creative in the real estate industry: Many steps to buy real estate can now be done digitally. Although easing is now being implemented again, some things have changed permanently.
According to McMakler, one of the largest hybrid brokerage companies in Germany, the volume of new advertisements for purchase offers declined by 30 percent in March in connection with the spread of the coronavirus in Germany – which shows how hard the industry was hit. Market activity also declined by 28 percent, giving buyers who are not deterred by the economic impact of the virus more choice. In order not to let the sales figures drop even further, brokers and sellers got creative when it came to digital solutions for buying property during the contact restrictions.
PropTech companies are booming
For example, brokers have developed working processes that enable them to carry out real estate valuations, exposés and property inspections without physical contact with their customers – of course, a lot happens via video conferences. Feelestate, Immo-Tours and other providers of 360-degree tours are experiencing extremely high demand. Such 360-degree tours can, for example, be recorded and made available to interested parties moderated by the broker.
According to a survey, the increased use of digital possibilities has made them a real alternative for face-to-face meetings when buying real estate: On behalf of the brokerage company Homeday, the opinion research institute YouGov found that 52 percent of those surveyed can imagine buying a property without viewing it. A rough 30 percent of those surveyed consider the virtual tours to be a good alternative.
The contracting parties do not have to be present at the notary
The Federal Chamber of Notaries responded with an FAQ about the Corona professional law for notaries. It stated that in some cases – to be assessed individually by the notary – the attendance obligation of contracting parties or authorized representatives thereof does not apply. Instead, an unauthorized representative should also be able to replace the party. This related in particular to cases in which persons infected with the virus or at particularly high risk are parties to the contract.
However, the version dated April 29, 2020 expressly states: “However, this does not change the fact that the systematic certification with representatives without a power of attorney is not permitted according to both the policy recommendations and the guidelines of most chambers of notaries.” Accordingly, both property sellers must continue to do so as well as buyers (or their authorized representatives) appear in person at the notary.
Petition for digital contracts
The real estate platform Immowelt and the industry association IVD see PropTech opportunities as the future of the industry. So now they are trying to digitally enforce the conclusion of property purchase contracts with a petition. So far it has not been possible, among other things due to the warning and information function of notaries, to inform inexperienced parties about the rights and obligations that come with contracts.
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According to Personal-Financial.com, the authors of the petition: “The notary contract could already be processed legally securely and digitally using video telephony, RFID-based identification documents and highly secure encryption technologies.” The petition was intended to ensure that the real estate industry survived the crisis as best as possible and ready to look into the future.
It is still unclear whether the petition’s claims will actually be enforced. But one thing is certain: brokers and sellers are now much better prepared for crises like this and the industry is developing in the direction of digital opportunities.
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