By Christine Graf
Local real estate agents and brokers have been forced to change the way they do business in the midst of the COVID-19 pandemic.
Until this month, the work of real estate agents was considered non-essential, creating a severe hardship. This month, that was relaxed somewhat, but challenges still exist.
New York state opened up part of the real estate market on April 1 with a the ruling that residential and commercial showings and some other limited functions are essential businesses and can continue.
According to Empire State Development, the following functions are considered essential: residential home and office showings, home inspections and residential appraiser work. But the state asked real estate agents to continue to telecommute or work from home to the maximum extent possible.
Under the guidance, brokers can visit properties to conduct virtual showings, and they can oversee transactions or signings at their offices as long as they follow social distancing protocols. Appraisers and inspectors can also visit properties for inspections.
The New York State Association of Realtors urged agents to limit person-to-person contact and keep six feet between people.
Equitas Realty owner Janet Besheer said that her more than 20 agents are relying on technology to connect with their buyers and sellers. They had not been able to show properties or have in-person meeting with clients early in the pandemic. The company’s Saratoga Springs and Glens Falls offices were closed, but she has not had to furlough her two W-2 office employees.
“So far, we have not laid anyone off,” she said. “I’m waiting to see what is going to happen with this PPP (payroll protection package). I’m trying to keep everyone onboard, and if we can get this assistance, we will definitely be able to do that.”
The $349 billion payroll protection package is part of the U.S. government’s $2 trillion coronavirus rescue package that was recently signed into law. It is intended to ensure that small business owners can continue to pay their employees during the pandemic. The aid will be delivered in the form of loans provided by Small Business Administration-approved lenders.
“Our industry has been given a great responsibility in this time of crisis to help meet the needs of New York’s residential and commercial property buyers and owners, and the overall welfare of the local and state economy,” said NYSAR President Jennifer Stevenson. “But our priority must be to the safety of our customers, clients and indeed for ourselves, as we all continue to practice socially responsible distancing that is helping to flatten the curve during this national health crisis. Our mantra must be ‘safety first, work second.”
“While our industry is one that relies on personal contact to best serve our clients, during this crisis, we will all need to adjust our approach. For example, you must limit person to person contact and observe the six-foot separation guidance,” she said.
In the midst of these uncertain times, Besheer said brokers and agents are still working but have been relying on technology to do their jobs.
“If this had happened 20 years ago, we would have been totally dead in the water,” she said. “We are using technology to allow clients to virtually visit homes. For us, it’s being creative. We are communicating through things like Facebook Live. And we are texting and emailing to stay in touch with our clients. As agents and as brokers, we are doing everything we can with our technology to help bridge the gap and keep people aware of what’s happening and aware of properties that are for sale.”
Real estate agents throughout the country are relying on virtual open houses and showings to allow buyers to view properties. The number of 3-D home tours available on real estate web site Zillow have increased 326 percent from this time last year.
Although the majority of buyers have put their home buying plans on hold, Besheer said there are exceptions. Some buyers have unusual circumstances that prevent them from waiting out the pandemic.
“There’s very little inventory on the market right now, and when a well-priced property comes on, people are jumping on it,” she said. “We have seen people putting offers in without seeing it in person. That means we have to rewrite our contracts to indicate that everything in that contract is contingent on getting into the house in addition to having it inspected and everything else.”
Deed contingencies must also be written into these contracts. This is necessitated by the fact that deeds cannot be filed for as long as county offices remain closed.
“That’s another contingency in the contract,” she said. “They can convey the property, but the deed may be held up until they can get it into the county offices.”
Attorneys, banks, and notaries involved in pending real estate transactions have also had to adjust the way they do business. Closings are still taking place, and the governor granted notaries the approval to utilize audio-video technology to complete their notarial acts.
Although notaries must follow strict protocol when using this technology, Besheer said not all attorneys are comfortable with the process. For example, a local attorney told Besheer that she arranged for documents to be notarized in a parking lot. The attorney and client had no physical contact, and the documents were placed in the open trunk of one of their cars. The attorney was able to witness the signing of the documents from a distance before removing the signed documents from the trunk.
Keller Williams real estate agent Mike Zygo said he appeared at a recent client closing via FaceTime. The closing took place in the hallway of a law office.
“The attorneys shuttled the paperwork in and out of the office, but no one else was allowed to go into the office,” said Zygo. “It’s a very strange time.”
Because he has been working in real estate for less than one year, the pandemic restrictions have been especially difficult for Zygo.
“This is a business that is about outreach and generating leads,” he said. “I can’t meet anybody in person, so if it isn’t anyone I don’t already know personally, it’s going to be hard to let someone trust me to represent them.”
Zygo said he and others in the field are concerned about the long-term economic impact of the pandemic.
“With people losing jobs, it’s going to be tough for banks to give people mortgages,” he said. “People who otherwise would have been really excited to buy a house at the moment have put their plans on hold because their financial futures are less certain.”
Besheer said the pandemic has caused buyers to become hesitant, but she is hopeful the economy will rebound quickly. She expects there to be surge of buyers and sellers after social distancing restrictions are lifted.
The COVID-19 pandemic has occurred at a time when agents are preparing for their busy season. According to data from the National Association of Realtors, 40 percent of home sales take place between the months of May and August.
“There was no way we saw this coming. It wasn’t like a recession or a depression where it was a systemic thing that was happening over time. When this thing hit us, our economy was at its highest level ever,” Besheer said.
It is because of the strength of the economy before the pandemic that Besheer is hopeful that it will rebound quickly. She and other agents both locally and throughout the country are ready to make up for lost time.
NYSAR is working on further guidance for how communities can be served while adhering to these critical important health directives.