Coronavirus quarantine and stay at home orders have thrown a monkey wrench into the plans of many Coloradoans (and aspiring Coloradoans). Despite significant barriers, the market remains stronger than anyone would have expected.
Last week, we reviewed how COVID-19 has affected the Denver area real estate market so far.
This post is the second in our 3-part Coronavirus series. We will lay out the nitty gritty logistics of real estate transactions during the COVID-19 quarantine.
In our next and final installment in the series, we will explore what makes sense for today’s sellers and buyers.
What are the current logistics of showings and marketing homes for sale?
Though in-person showings are not currently allowed, inspections and appraisals continue during the quarantine.
Despite this state-wide cancelation, more than 1600 Colorado properties have gone under contract since April 9th. Luckily for buyers and sellers, we have the tools to keep business going with 3D tours, virtual open houses, electronic signatures, et cetera.
As part of Governor Polis’s Safe-at-Home orders for reopening the state, showings will resume on April 27th. (Still no open houses.)
When showings are allowed again, what precautions can buyers and sellers take to stay safe?
Anyone thinking about buying or selling a home during this time must consider the inherent health risks. We recommend reviewing current CDC guidelines for staying safe together; treat these guidelines as another important disclosure.
In some states, agents are requiring any person entering a property to provide a declaration that they are not currently sick. Visitors must also agree to follow all precautions required for viewing the property at all times.
Of course, it is imperative to limit showings to one group at a time.
Though not currently mandated, all buyers and their agents should wear face masks and gloves. If possible, sellers should set up hand-sanitizer stations throughout the house. We also recommend that sellers’ agents provide extra (disposable) gloves, shoe covers, and face masks. As usual, we advise sellers to leave the property during showings, this is especially important now.
UPDATE: 4/30/20: GUIDELINES FOR REAL ESTATE SHOWINGS IN DENVER AND BOULDER
For sellers who are immuno-compromised, are there any special steps that can be taken to keep them safe while still selling the house?
While sellers’ agents can provide instructions for showing precautions, sellers should only move forward with marketing activities that they are completely comfortable with. It is important that sellers and their agents speak openly and often about concerns and precautions.
In some areas, sellers and their agents require additional precautions and signed disclosures. For sellers who are immuno-compromised, it is best to err on the side of caution: implement all protective measures. We understand that waiting is not always an option, but it is not worth risking your life. If you or someone in your home is at heightened risk, we advise waiting to list your home.
What’s the deal with virtual open houses? How do they work?
Agents continue to market properties by holding virtual open houses on Zoom, Microsoft Teams, Facebook Live, and other electronic platforms. REColorado.com (also known as “the MLS”) added the virtual open house format to their platform, allowing advertisement for these events. Virtual open houses are most effective in vacant properties because the agent can be physically in the property and can help shoppers experience the home in real time. With occupied homes, virtual open houses are usually done with a 3D property tour done with Matterport software.
How do inspections work right now?
Most home inspectors can start their process without the client present. Once the inspection is complete, inspectors can provide a rundown via technology or in person. Of course, this is while wearing a face mask and maintaining proper social distance. Some inspectors are using a go-pro to provide video of what they are seeing during the inspection.
Sellers should thoroughly discuss their exposure and safety concerns with their agent. This should ensure clear communication with the buyers’ agent and inspectors. Any precautions asked of buyers and agents for showings should also extend to inspectors and others who enter the property.
How do appraisals work right now?
While some lenders are allowing external-only appraisals, most appraisal inspections are happening the same as they had before. Appraisal is still considered an essential service for now.
Appraisers will contact the seller’s agent to schedule their visit; they will not show up randomly on the seller’s doorstep. Guidance for appraisal procedure is on a case-by-case and state-by-state basis. At the time of this article, there is no standardized set of appraisal procedures to ensure safety during COVID-19.
Sellers and their agents can strategize what precautions they would like appraisers to take, including wearing face masks, gloves, et cetera. When the appraiser calls to schedule an appointment, the seller’s agent can communicate these requested precautions. If the appraiser does not agree to comply to the homeowner’s satisfaction, the seller may decline the appointment request. (Though, sellers should be aware that they are running the risk of contract termination if arrangements for an appraisal cannot be made.)
Remember, the appraisal can make or break a contract so… make your requests but… be diplomatic!
How do closings work right now?
Closing logistics depend on which title company the buyers and sellers have agreed to work with. Title companies that allow in-office closings limit the closing to only signors. This means that agents sign remotely and loan officers do not attend closing. Other title companies allow drive-up closings so that clients won’t have to enter the building. In the case of a drive-up closing, buyers and sellers call the title rep when they arrive. Someone from the title company will bring the paperwork down to the clients’ car. Then the closer will walk them through the documents over the phone.
Other arrangements can be made, experienced agents know how to explore options with the title company to accommodate the needs of their clients.
What about scheduling contractors to make repairs?
Currently, contractors fall under the essential services umbrella. In our experience, many of the trades are available and quick to jump at job opportunities.
Consumer reports offers several recommendations for maintaining safety for home service calls during COVID-19. The main things to maintain safety are communication and honesty. All parties need to consider how urgent the negotiated repairs may be. Sellers who wish to keep foot traffic in their home to a minimum should keep this in mind as they negotiate inspection resolutions. Negotiating a credit or escrow to cover the cost of post-closing repairs is always a great option, especially now.
What else should buyers and sellers and their agents know during COVID-19?
Colorado real estate agents have, as a resource, a new Colorado Real Estate Commission Approved COVID-19 Addendum. Brokers can use this addendum to “pause” pending real estate transactions when the parties want to close but cannot due to circumstances caused by COVID-19. This optional addendum is designed as a precautionary measure, not an after-the-fact fix, so it should be presented up front.
The Colorado Department of Regulatory Agencies website has updates of guidelines for real estate activities.
We are closely monitoring real estate industry news amid the changes and challenges of COVID-19. If you would like to have the latest updates delivered directly to your inbox, sign up for our email list now.
There’s a lot to sort through in buying or selling a home, and hopefully this article has been valuable. We help our customers make informed decisions, negotiate with expediency and integrity, and get the terms and conditions that they need, all while mitigating risk.
For a free consultation, home value assessment, and to learn more about your real estate options in the Denver Metro Area, please contact us today. We know what it’s like to manage lots of commitments and responsibilities and we know that your time is valuable.
- Learn about your real estate-related objectives and priorities
- Give you some ideas of what your options are now and in the future
- Provide free advice on next steps you can take to get closer to achieving your real estate goals
And if you’d like, we can show you where and how we can help.