In light of the uncertainty of times during the coronavirus pandemic, home sellers have canceled open houses, lenders are extending the time it takes to close a deal and many real estate agents are giving video tours in lieu of live walkthroughs.
In other words, there’s virtually no aspect of American life that has been untouched by the coronavirus, and that includes buying and selling a home. Here are five things every buyer and seller should know when it comes to transacting real estate during this difficult time.
1. The personal touch has gotten less personal
Driving clients around in cars seems to have gone by the wayside. Instead, clients are either being asked to meet real estate agents at the property for private showings to reduce the risk of spreading the virus. Many times the agent isn’t even there until they come in to wipe down doorknobs and banisters afterward. Brokers have been able to conduct remote house tours via FaceTime and other tools for years, but such platforms have become invaluable now that Americans are being encouraged to maintain a safe social distance to slow the spread of COVID-19. And while agents often take the lead in taping video tours for their clients, homeowners are taping their own guides in states like California where most workers must stay inside.
2. Delays in the process
Key parts of the home buying process that typically have to be done in person, such as the recording of a title at a county courthouse or clerk’s office, are proving to be difficult. Other steps in the home-buying process also are coming under scrutiny because of the need to avoid personal contact.
An appraiser has to enter the house, for example, which creates concerns when it comes to social distancing, and quarantines and lockdowns. Appraisers also have been stretched thin by an influx of people taking advantage of low borrowing costs. Some counties allow documents to be signed remotely, but if those options aren’t available, a lot of loans could be delayed until there’s some type of resolution. Other delays could occur with locking in interest rates on mortgage appliances, as well as with employees working remotely because of coronavirus. The bottom line: Choose your closing dates carefully to account for potential delays.
3. Some rates are being locked in longer
With the fluctuating interest rates, many borrowers are eager to get a deal that will cost them the least month to month. That means some lenders are extending the typical 30- to 60-day windows to lock in rates to up to 90 or even 120 days.
4. COVID-19 gives buyers, sellers an out
The California Association of Realtors has come up with clauses that would extend the amount of time buyers and sellers have to close their transactions by up to 30 days or longer and also allow them to back out of the deal if the coronavirus affects them. The virus “has had unprecedented impacts on real estate transactions, including, but not limited to, travel restrictions, self-imposed and governmentally required isolations, and closures of both governmental and private offices required to fund, close and record real estate transactions,” the clause reads. If those obstacles arise, and one or both parties cancel, buyers can get back their deposit, minus any fees or costs that they paid, the clause says.
5. Calls for remote signing to go nationwide
The delays that may occur if appraisers or attorneys have difficulty getting signatures on documents in person has lent new urgency to a bill that would enable transactions to be signed off on remotely. Twenty-three states already have remote online notarization policies but borrowers in more than half the country remain unable to close a real estate transaction without an in-person signing.
