Buying in the Time of Pandemic
Updated 4/28/20
On April 3, 2020, we were thrilled to close on Camp O, my first remote closing during New York’s
COVID-19
lockdown.
Everyone is talking about the "new normal" these days, and real estate is no exception. This is an industry that relies on in-person interactions for nearly every step of the process. I’m very curious to see how this current pandemic will reshape industries, particularly ours. I'm already seeing key players adapt - home inspectors, lenders, attorneys and more.
For those of you who are on that path, I’ve collected some of my notes on navigating the real estate market during this time.
General Guidance
We're getting new information daily, if not hourly. (Public Service Announcement: keep a close eye on the CDC for current information on the virus. I also recommend the New York Times daily coronavirus newsletter.) This real estate scenario is hard to game out since there's still so much that we don't know. In this shifting environment, here's what we do know as of today:
1. NYS on PAUSE. If you are a potential buyer, don't plan on hitting the road until this mandate is lifted. The end date has been extended several times, so keep an eye on this link for the latest. But keep reading - there's still a load you can do remotely.
2. Real estate is an “essential” industry, but this doesn't mean business as usual. On April 1, the New York State Association of Realtors provided us with the following guidance from Empire State Development:
Essential Businesses must continue to comply with the guidance and directives for maintaining a clean and safe work environment issued by the Department of Health and every business, even if essential, is strongly urged to maintain social distance to the extent possible.
The following functions of real estate and/or realtors (sic) are considered essential: residential home and commercial office showings; home inspections; and residential appraisers.
Back-office real estate work is deemed essential, but please utilize telecommuting or work from home procedures to the maximum extent possible.
3. Real estate showings can be done virtually, or as unaccompanied showings, including some restrictions and exclusions. Check out the step-by-step below for more information.
Step-by-Step
I'm still fielding new buyer inquiries daily, and my advice is to get started on, or continue, your search remotely. I want to share with you notes from my own experience with our Camp O closing, as well as conversations with two trusted real estate attorneys in Sullivan and Ulster Counties: Jared Hart and Barbara Garigliano. More information on both attorneys can be found here.
Here is what you can do from home:
Bank Pre-Approval
This is a crucial step to learn what you can afford, plus it's almost always done remotely anyway. Here are few local lenders that have come recommended by past clients. Bank pre-approval may also in some instances allow you to have additional showing options - more on that below.
Find a property
Check out my Find a Property survey, and let's get started on narrowing down listings. Also send me listings that you've already had an eye on.
Showings
Real estate is an “essential” business, but the guidelines are vague in some areas. It’s super important to our team that we interpret the guidelines in a way that favors socially conscious practices, and we’re actively navigating the new rules and guidelines as they come. I ask that buyers have bank pre-approval prior to scheduling an unaccompanied showing, in order to identify serious buyers and to limit non-essential activities out in public during this lockdown. As of right now, these are our showing options:
Virtual showings
I can set up virtual showings for qualified buyers using platforms like Zoom, Google Hangouts, FaceTime, WhatsApp, Houseparty or whatever your preferred platform may be. If connectivity at a specific property is an issue, I can pre-record your showing, and then we can discuss once I get back into reception.
Unaccompanied showings
We may be able to schedule unaccompanied showings. Agents are not permitted to arrange regular, in-person showings with clients, but we may, at times, schedule an unaccompanied showing for you. In this case, the buyer signs a COVID-19 disclosure form, agrees to wear gloves and a mask, and is given house access without an accompanying agent. This is, of course, dependent up on seller approval, which will be on a case by case basis. Again, on a socially conscious level, I also ask that you limit your activities door to door during such trips upstate. Unaccompanied showings will likely only be granted for vacant houses, as well.
Make an offer
I can draft an Offer to Purchase for you to remotely review and e-sign. All negotiations are done remotely. For those buyers who haven’t physically been inside the house prior to making an offer, we include a contingency for an in-person walkthrough prior to closing.
Schedule a home inspection
Inspectors are now deemed "essential businesses" but with social distancing measures put in place at the inspector's discretion. This will likely mean you cannot attend in person, but you will still get a detailed report with photos, as well as the opportunity to discuss the results thoroughly with your inspector on the phone.
Sign your contract
Contracts can be signed electronically, and escrow payments can be processed online by bank transfer, as opposed to obtaining a certified check in-person at your bank.
Apply for your full mortgage
This can be done electronically. It’s important to find a lender who is efficient and responsive. See further discussion on why in the next section. Here are few local lenders that have come recommended by past clients. It’s okay to shop around a bit to find a lender who you feel is responsive.
Bank appraisal and commitment letter
This is an area where I'm seeing some delays. Appraisers are now deemed "essential", but regardless, some lenders are seeing a shortage of appraisers or delays in scheduling (some appraisers are scheduling one month out, for example). Some banks are also relaxing appraisal requirements to allow for drive-by appraisals or "desk" appraisals, but this isn't always in our favor here in the Catskills where there can be quite a disparity in the quality of homes. It's often important for an appraiser to see the quality of your home in person to help overcome a potential appraisal shortfall.
Buyers never attend appraisals, so you will be social distancing at this step either way. As an agent, I typically attend the appraisal to give the appraiser access and provide comparable sales, but during this lockdown I’ve been able to provide comps to the appraisers by email and discuss over the phone. Sellers have also been approving remote access so that the appraiser can use the lockbox directly without the agent being present, but such approval is on a case by case basis. So far this hasn’t been an issue for my appraisals, though.
There may also be some ancillary bank delays due to COVID-related staffing shortages, as well as backlogs related to current homeowners trying to refinance due to attractive interest rates.
Title search
This may be able to be done remotely, depending on the property. The Sullivan County Clerk's online records go back to 1990, and Ulster County goes back a bit further than that. For information not available online, attorneys are asking sellers to provide their title policies to fill in any information gaps. If the title records are not online, and if sellers are unable to produce title policies, then the deal may be temporarily paused until the information can be retrieved in person. I've heard that the Sullivan County Clerk, for example, is allowing title searchers into the office one at a time to pull records.
Municipal search
Municipal searches are being done remotely but are causing delays because some of the towns up here are very limited. For example, one Code Enforcement Officer I worked with recently only came into his office every two weeks on a normal, non-pandemic schedule. Title companies recognize this and are ordering the municipal searches as immediately as possible. It really all depends on the specific town - some have more modern digital records, while some only keep hardcopy records.
Survey
Most surveyors are still working. Surveys functionally cannot be done remotely, but are by nature solo outdoor activities. For some reason, there are very few active surveyors in Sullivan County, even in normal times. But so far we aren't seeing delays unless the surveyor needs to collect information from the county clerk (see the title search section above).
Final walkthrough
Real estate agents aren't allowed to attend the final walkthrough, but buyers are able to do so independently. We'll need to arrange lockbox access on a case by case basis. And I can call in remotely, assuming there is connectivity at that location. Another option is for me to do the walkthrough for you and/or while on the phone with you.
Closing
Closings can now be completed remotely, and this is an area where we’ve recently seen some significant adaptations. For example, notary requirements. There is virtual notary being allowed during the pandemic, which is essentially the notary watching the client sign via Facetime or Zoom and then sending the original documents around for the official seal. I've even heard of at least one notary happening at a bank drive through. One of my favorite attorneys told me that the new notary process was a pain in the ass, but that it is working. Powers of attorney are allowed, as well, but still need to be notarized. Another example of remote progress is that deeds typically need to be recorded at the clerk's office, but some title companies are pivoting and are now able to record the deeds online.
So the main sticking point here will possibly be the bank and the title. Cash is definitely the way to go, if this is within your budget. It is possible to finance down the line, but if you can afford it, consider a cash purchase in the near term.
It's exciting to see our team continue to pivot and adapt. Stay tuned as we continue to navigate this new normal (and in the meantime, stay home!).
