Home Buying and Selling During the Pandemic: What You Need to Know
Resources to help you navigate the new “real estate normal”.
Thanks to technology, real estate agents, buyers, and sellers can still get deals done while following health and safety measures to prevent COVID-19.
For checking out houses, some buyers look at virtual home tours or visit in person while maintaining the six-foot distance required for social distancing with their agent, and sellers are even livestreaming open houses on Facebook. Drive-by appraisals are the new normal. Inspections are available for buyers to watch over video call. Notaries, wearing masks and gloves for protection, are getting signatures on people’s doorsteps.
“We have had to make some adjustments, for sure,” says Brian K. Henson, a REALTOR® working for Atlanta Fine Homes / Sotheby’s International Realty based in Alpharetta, GA. “Everyone is trying to minimize face-to-face interactions. There have been some delays, but mostly, deals are getting done, just with tweaks.”
Here are some ways buying and selling houses have adapted to the current pandemic:
Check the laws within your state, county, and city to get the latest updates on closings and shutdown rules, since in-person showing may be banned, depending on your locale.
Services like FaceTime, which have been used for home tours for years, have become even more relevant for real estate during the pandemic. Real estate websites have reported a sharp uptick in 3D home tours being made, such as a 494% increase in video home tours in March alone on Redfin, a real estate company.
“I’ve done several FaceTime showings,” says Henson, who has also done virtual tours in the past. While he has closed a deal with only virtual showings before, he says he has not done this yet during the pandemic.
Agents do everything to make sure clients are safe, such as wiping down door handles and spray lockboxes with disinfectant before they open everything for in-person showings where it is allowed. “We leave all the lights on so no one touches switches, and we don’t touch cabinets or doors during showings,” Henson says.
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Safe Showing Guidelines for Realtors
HouseLogic, owned by the NATIONAL ASSOCIATION OF REALTORS®, recommends allowing one guest at a time into a home with at least six feet of space between potential buyers; additionally, by NAR recommendation, agents should have guests wash their hands or use hand sanitizer and remove their shoes before entering and not allow children to come to showings.
“We’re living in extraordinary times and unusual circumstances. If you have the ability to work, you have to be creative,” Mabél Guzmán, a Chicago real estate agent and also the vice president of association affairs for NAR, told NBC News. He has also created a video explaining how to conduct virtual showings during the pandemic.
Down Payment Assistance
You can look at which organizations have changed their rules or even temporarily stopped their down payment assistance programs on our Down Payment Assistance Resource site.
Desktop and Drive-By Appraisals
Since appraisers are considered essential workers in many areas, home appraisals will continue, but most likely, remotely. The Federal Housing Finance Authority has set up new rules to temporarily allow desktop and drive-by appraisals for federally-backed loans.
A desktop appraisal, which does not require meeting in-person, involves making a home estimate based on tax records and information from multiple listing services. Drive-by appraisals, where the appraiser looks at the outside of the home, are used alongside desktop appraisals. The Appraisal Foundation has an FAQthat discusses guidelines for appraisals during the current pandemic.
Different agencies also have specific appraisal guidelines below:
Some lenders still ask for in-person appraisals however, which can still be done even in areas under shutdown. According to the Urban Institute, 35% of first-lien mortgages are held by private lending organizations.
Appraisers should still obey the Centers for Disease Control guidelines, such as wearing a mask and gloves, keeping six feet space away from others in the home, and asking if homeowners have been sick recently or were in a place where COVID-19 is highly prevalent, when conducting in-person appraisals.
Live Video Inspections
In conducting inspections, inspectors are now doing them without buyers around and using hand sanitizer and alcohol wipes to stay safe. Inspectors should videotape inspections so clients can view it from home later, use live video chat programs like FaceTime to lead clients through their inspection, or even call clients after the inspection to discuss their findings, according to the National Association of Certified Home Inspectors advisory.
New guidelines for inspectors by the American Society of Home Inspectors have been issued to keep both inspectors and homeowners safe while also accurately assessing the condition of the home.
Locking Mortgage Rates
Some lenders have extended mortgage rate locking periods in order to address longer closing times and wildly fluctuating rates, so you can still lock in a good rate even if your loan is taking longer to process.
Make sure to check with your lender about the lock rate policy, since some lenders have this policy for every loan while others offer rate locks for refis.
Related: How to Get Home Financing
Before coronavirus, lenders would get a verbal employment verification from a borrower’s employer, since verifying employment matters in receiving a mortgage.
Because businesses are closed during the pandemic, the Federal Housing Finance Authority (responsible for federal home loan banks, Fannie Mae, and Freddie Mac) has relaxed the rules for federally-backed loans.
A bank statement with a recent payroll deposit, a recent paystub, or even an employer email are now acceptable sources of proof of employment for federal home loans.
During the pandemic, real estate agents can perform walk-throughs over video chat or simply open the home up for buyers to conduct their own walk-through. Henson says that in walkthroughs, he stays six feet away when accompanying clients and makes sure they are wearing masks and that they wash their hands before entering and before leaving the house.
When buyers finally get their home, they should still disinfect it before moving in.
Remote Notarizationby Region
Only about one-half of states have permanent rules about remote online notarization (RON), which allows notaries and signers to sign documents remotely over platforms like Zoom and FaceTime where notaries can witness you signing a paper document or request an electronic signature, all over camera.
Some states have temporarily allowed for RON, and more states could follow as federal and state laws adapt and expand. Here’s a list showing notary laws by state and which type of remote notarizations are acceptable.
To See the Most Recent Mortgage Rates, Click Here.
Closings Get Creative
Since traditional closings are impossible, banks and title companies are navigating around these limitations.
For example, Legacy Title in Minnesota uses a successful drive-thru closing service (14 closings in its first week alone)for one of their offices at the bank branch building, where the title company representative handles the closing papers behind the teller window while the customer waits outside.
Drive-by closings, where notaries in gloves and a mask meet buyers and deliver documents through car windows, are another option.
“I had a closing where the buyer sat in her car the whole time. The attorney came out to her car, gave her paperwork, had her sign in her car, and my buyer never got out of her car,” agent Isaac McDow of Birmingham, AL told WBRC.
“I’ve had closings the last three weeks [that] I’ve been asked not to attend. There was one where the seller signed two days before the buyer. Then the seller came back two days later and signed,” mentions Georgia-based Henson.
Henson has also had to extend closing dates on two sales in New York, where he also has a license. Nonresidents can’t even enter buildings, even to fix issues found in a home inspection. He has had to leave closings with tentative dates.
“It’s all about being really flexible right now,” he says.
TIP: Check here to see if your county recording office can process closings virtually.
Student Loan Relief
Thanks to the Coronavirus Aid, Relief, and Economic Security (CARES) Act, student loan borrowers do not have to pay loan payments from April 10 to September 3, 2020 and no interest will be charged.
Learn more about these changes at the Consumer Finance Protection Bureau’s site.
While these suspensions only apply to Department of Education loans, help for loans that aren’t covered like private loans, Perkins Loans, and Federal Family Education Loans, is available but not automatic. Your student loan servicer will have more information about loan relief.
Should I Buy or Sell?
While the real estate industry is adapting to the pandemic and mortgage rates are rock-bottom, your real estate agent can help you feel more comfortable making this decision by giving you information about buying and selling.