From online house-hunting to e-closing: How the home buying process has changed
Buying a home is a big decision that involves significant time and effort — not to mention money — spent on research, negotiations, paperwork, and more. While this transaction has always included steps like house-hunting, inspecting properties, securing financing, and making offers, homebuyers now encounter a distinctly different process and housing market compared to recent years.
Thanks to the shift to hybrid and remote work brought on by COVID-19, people continue to spend an unprecedented amount of time at home. This reality, combined with record-low interest rates and high rental prices during the pandemic, led to a housing market boom — with the number of homeowners increasing by approximately 2.1 million from 2019 to 2020.
Today, however, Americans face challenges such as declining home sales, the highest mortgage rates in more than 20 years, and a possible economic recession on the horizon. While the state of real estate is ever-evolving, the pandemic’s effect on the home-buying experience endures.
In this environment, more people are buying homes without visiting them, competing for fewer available properties, and closing faster than ever. This reality requires an agile, digital-first approach to everything in real estate, from looking at listings online to signing documents electronically.
To help you navigate and understand the current landscape, we’ve created this guide covering the most important ways the home-buying process has changed over the past few years. We’ll go over the impact of online real estate services, the housing supply-demand imbalance, and how digital document tools can help ensure a smooth home-buying process.
As more people buy homes without visiting them, compete for fewer available properties, and close faster than ever — you need an agile, digital-first approach in real estate, from looking at listings online to signing documents electronically.
How COVID-19 and tech impacted the home-buying process
The pandemic pushed many buyers to look for and purchase houses online. As commuting declined with the rise of telework options in 2020, almost 2 million renters in metropolitan areas were able to seek housing in more affordable areas outside cities.
This flexibility motivated many renters to become homebuyers, while job losses and pandemic-related financial pressures led to almost 3 million adults moving home to live with parents or family members in the spring of 2020. Rising rent prices over the past few years also contributed to this trend.
As rental housing became increasingly less affordable, some millennials chose to buy a home sooner than originally planned. According to the National Association of Realtors, the share of first-time homebuyers increased by 4 percent from April 2019 to 2020.
Social distancing guidelines and travel restrictions moved more of the home-buying process online. While realtors, sellers, and buyers used technology to purchase and advertise homes before the pandemic, digital tools became essential to real estate experiences when in-person meetings weren’t possible.
Buyers are increasingly using virtual services to vet their options. Companies like Zillow offer digital open houses, allowing buyers to tour and compare homes through video walkthroughs and 3D floor plans. Immersive digital experiences with virtual and augmented reality technology also open doors, so to speak, equipping buyers to visit properties without leaving their homes. As a result of these digital services, many buyers are purchasing homes sight unseen.
While not everyone is comfortable with touring and purchasing homes entirely online, the majority of buyers today use digital tools when house hunting. In 2021, 95 percent of buyers used the internet as a property search tool, and in 2022 that number increased to 96 percent. On average, buyers viewed four homes online only during their research.
Racing for real estate — what the housing market looks like now
The imbalance of housing supply and demand also has an impact on the trend toward increased online home-buying. While a recession may be coming, an economic downturn won’t necessarily lead to a housing crisis.
The real estate market remains competitive due to a national housing shortage, as record-high home prices and record-low housing listings make it difficult for many to become homeowners.
These factors disproportionately affect groups like people of color and first-time homebuyers. White homebuyers in 2022 far outnumbered other racial and ethnic groups at 88 percent. The share of first-time homebuyers this year also plummeted to 26 percent — the lowest percentage since the National Association of Realtors began collecting data. For comparison, 31 percent of all homebuyers purchased a home for the first time in 2020, with 34 percent being first-time homebuyers in 2021.
As bidding wars become widespread and buyers scramble to snatch up coveted listings, many are willing to stretch their budgets, revise their housing wish lists, and purchase properties that need repairs. For example, according to a recent homebuyer report, 82 percent of millennials are willing to buy a fixer-upper, and 80 percent are willing to make an offer over the asking price to compete for homes.
Since the housing market remains hot, time is of the essence in the buying process. In 2021, houses were on the market for an average of just one week, and they currently sell within about two weeks. Buyers generally search for homes for a total of 10 weeks, meaning — once they’ve got their eyes on a property — they need to make quick decisions, act efficiently, and finalize things fast.
This need for speed is amplified by the fact that many buyers are waiving the right to inspections in person and making offers above asking prices — significantly reducing the time that houses are available on the market.
E-signatures make e-closing quick, convenient, and secure
To keep up with competing homebuyers and offers, you need dependable digital tools to help you navigate the virtual world of real estate quickly — from online house-hunting to e-closing. Technology empowers buyers to compare housing options and make offers in minutes — without the hassle of waiting to schedule appointments or receive physical paperwork.
In-person closings are becoming a thing of the past, thanks to electronic signature and digital document tools. Some mortgage e-closings still require physical meetings, but the option to e-sign documents can speed up the process significantly. Lenders can use a hybrid approach with both traditional and digital documents, or sign everything electronically through remote online notarization, if state laws allow.
Digital documents can help prevent losing papers and missing signatures, boosting efficiency in the e-closing process. Security features like password protection, audit trails, and identity authentication can ensure legal compliance and reduce stress for both the buyer and seller.
Other digital document management capabilities like PDF editing, commenting, and mobile scanning streamline the review and e-signature process, expediting communication between real estate agents and homebuyers to keep everyone on the same page (literally).
Here are some of the ways that digital documents can aid in online home buying:
- View, download, convert, or compress PDFs of important property information like home layouts, purchase agreements, mortgage e-closing documents, and more.
- Send and request e-signatures so all parties can quickly, easily, legally, and securely sign documents.
- Use real-time collaboration tools to edit PDFs, leave comments with specific questions, clarifications, or action items, and track progress of documents remotely.
- Benefit from integrations with Microsoft applications so you can convert PDFs to Word or Excel files — or convert Word and Excel files to PDFs — based on your preferred format and organization type.
- Apply mobile functionality so you can effortlessly view PDFs on phones, tablets, and computers from anywhere and maximize readability for everyone involved.
- Access top-of-the-line security and compliance features that are up-to-date with current real estate industry standards, certifications, and regulations.
Improve your home-buying experience with digital document tools
From house-hunting to making an offer, the home-buying process looks a lot different today than it did just a few years ago. Spurred by the pandemic, real estate has undergone a dramatic digital transformation, with more people searching for and buying homes online than ever before.
Despite rising mortgage rates and falling sales, the housing market remains competitive due to a low inventory of affordable, available homes. Speed is crucial when it comes to searching for and securing a home, and using online tools can make all aspects of the home-buying process faster and easier.
Adobe Acrobat can help you navigate this new age of home buying with digital document tools and features like real-time collaboration, application integrations, mobile functionality, and security and compliance safeguards. Acrobat allows you to track and update documents from any location, no matter where you move.
Read more about the full features of Adobe Acrobat to discover how using digital documents can hep you find, finalize, and fall in love with your dream home.