Real Estate in the new reality

By Rick Yost

COVID-19 has changed almost all parts of our lives and real estate has not been immune to the changes. While the business of real estate and the purchase and sale of homes goes on, how we go about that business has changed. Buying or selling a house is a multi-step process and the virus is affecting how real estate professionals and their clients are approaching these steps.

The first step to buying a home in this new reality is choosing an agent that is experienced, knowledgeable and that you have faith in their judgement. So much more of home buying is becoming hands off. You need someone not only to protect your interest during the transaction, but to also be your eyes in many cases. You can research agents online, conduct phone or a FaceTime interviews and chose the agent that is right for you without actually coming in physical contact.

Fortunately, the next step, mortgage pre-qualification is easily accomplished online. Contacting a lender over the phone and providing documents via e-mail is now common practice and not a huge change. The biggest difference is the typical first meet and greet at the lender’s office. Those are all taking place over the phone now.

Starting the search has not changed. Your agent will talk to you via FaceTime or phone and find out your price range, desires, must haves, etc. Your agent will then set you up on a search in the MLS and
listings that meet your criteria will arrive directly in your email. The listings will include many pictures, important info about the house, and most likely some type of virtual tour. From these listings, you will narrow to the homes you are interested in.

The next step, showing houses, has changed dramatically. The latest guidance from the Maine Real Estate Commission and the Governor require agents to first visit potential homes alone and FaceTime or create videos of the homes that the buyer identifies as good fits. Agents must take all precautions while doing these visits. When a buyer decides that a particular home seems like the right one, an in-person visit is arranged with the seller’s permission. Only the actual buyer is allowed to visit the home with the agent (no children, parents, etc.). The agent and the buyer practice good social distancing, wear gloves and booties. The offer and negotiations are then handled completely virtually. 

All signatures are collected digitally. The earnest money deposit can be mailed. On a side note, I believe you will also see a rise in virtual open houses.

Home inspections are now being attended by the inspector alone. In the past, the buyer’s agent always attended and often the buyer did also. The inspector can FaceTime from the property and provide a digital report. Inspectors are required to practice caution and wear booties and gloves. The
inspection will still be as thorough and informative as before. The biggest change is that buyers will not be able to actively participate in the inspection.

The appraisal process will continue almost as usual. The market has already seen a rise in FHA loans not requiring an appraisal and I think you will see that number continue to rise in the future and you will see other programs add the appraisal less option. Appraisers will still visit homes, but they are being asked to enter only if entirely necessary. The appraiser will visit the home alone and submit the appraisal report digitally. All physical interaction with the appraiser is minimized.

All the title work and lender diligence will continue to take place, but with proper social distancing practices. There is no physical buyer interaction needed in these processes.

The next step is the actual closing, and this is being handled in a few ways. Most common right now is that the buyer and seller are going to the closing office separately with no other parties allowed to attend, including agents. The buyer and seller each sign all the necessary documents separately and the transaction is completed. Buyers and sellers also have the option of having all the documents emailed to them, going to a notary and signing in the presence of that notary and returning the documents to the title company via overnight currier. The third option is to have a mobile notary visit the buyer or seller’s home and sign the documents there. The key exchange is coordinated with the buyer and seller’s agents.

As you can see it is possible to buy a home without any physical contact with anyone except a notary. It is also possible to practice safe social distancing throughout the entire process. In a market that had been short on inventory for almost two years, now might be the perfect time to buy.

Rick is a Realtor®, real estate author, and longtime Windham resident. You can reach Rick with all your real estate questions at rickyost63@gmail.com