A New Challenge
The need to be “socially distant” and the requirement that we “stay at home“ have already changed the way we do business in the short term, and will most certainly change the way we do business forever. But we New Yorkers and residential real estate agents are resilient and creative, and will emerge in a safer, and more responsive and productive place. Open houses and showings - The days of recreational visiting of homes will become a distant memory. Qualifying visitors prior to scheduling a viewing of any home will become the norm. How serious are the buyers? Have they been pre-approved for financing? Do they have the financial wherewithal to make the purchase? For how long have they been looking? Have they seen the pictures, floor plan, video and virtual tour? Are they familiar with the building and neighborhood? Are they ready to purchase immediately? Will they remove their shoes and wear masks and gloves when walking through the property? These questions will need to be answered prior to any physical visit.
I also suspect that offers will be made on properties, sight unseen, contingent upon viewing, once the “stay-at-home” order is lifted. With the appropriate protections in place for buyers and sellers, this will become a sensible way of doing business. Due diligence and the contract signing process - Attorneys doing their due diligence will work differently with management companies and building representatives. Board minutes will be made available electronically, and sometimes require a signed nondisclosure agreement. Standard contracts will be written and negotiated to include “pandemic riders” outlining the parties’ respective rights and obligations based upon circumstances that at one time were unimaginable. Signatures and transfer of down payment funds will be electronic only. A process which used to take 5 to 7 days may easily take up to twice that time to complete. Move-in’s and move-outs - Co-op and condo boards, and building management companies, have imposed rules restricting when residents and owners may move into and out of their buildings. The idea should be to balance the health and safety of buildings‘ residents with the need for people to get on with their lives. It does not seem as if a reasonable balance has yet been reached. As of the writing of this blog, many buildings have simply forbidden moves. This does not make practical sense, and expect a sane, safe middle ground to be arrived at to accommodate the needs of everyone.
Closings - Virtual closings will become commonplace. More frequent use of powers of attorney, and holding funds and documents in escrow, for example, will need to be utilized so that business may be transacted efficiently. The new closing procedures are not yet widespread or uniformly in practice. It will take time, cooperation, the creative use of technology, and patience by all parties to ensure everyone in a transaction is protected. It will take longer to get closings scheduled. But the current and future reality will be an improvement over past procedures. Our practice of residential real estate in a post-Coronavirus world will require a different set of skills, including ingenuity, perseverance and tact. These are times when ordinary and good enough will not do. Residential real estate brokers, like the lawyers, mortgage professionals and others who practice in our industry, are not commodities. Some are better, and some are worse. Buyers and sellers need our experience, expertise and professionalism, and should choose their professionals carefully. They should be prepared to pay appropriately for the time and guidance required to navigate the complexities and uncertainties of today’s transactions. Let the cream rise to the top.