Christopher Kelley, Senior Partner, Twomey, Latham, Shea, Kelley, Dubin & Quartararo, LLP, says the coronavirus pandemic has had a tremendous impact on all aspects of the real estate market — from sales to closings to mortgage payments.
One way the real estate industry has changed, Mr. Kelley says, is how showings and open houses are now handled. Recently, the Empire State Development Corporation deemed real estate agents as “essential” employees, but, under the new guidelines, agents will be prohibited from meeting with clients at the property in person; only prospective buyers may visit the home themselves, but with the seller’s permission.
But, Mr. Kelley says, the new way of doing business in real estate has affected other aspects of the transaction. Although New York State has allowed remote notarization of documents, the social distancing makes it more difficult to complete closings, home inspections and title searches. “This has negatively affected the transaction in the preparation and signing of documents,” he says. “It has become somewhat slower to arrange for inspections, water testing and such. Title companies have also been asking sellers to indemnify them against liens and judgments.”
Whereas many major markets have seen sales at virtually a complete standstill, the eastern Long Island market has seen glimpses of life. “Although, immediately after the stay-at-home order, the East End saw a flurry of emergency rental activity, that has slowed, as have new home sales,” Mr. Kelley says. “However, there are sales continuing to be made as buyers look ahead to the prospect of a more normal economy in the near future.”
Mr. Kelley also says there has been an increase in potential deals falling through or being delayed, especially among cash buyers. “Some purchasers who were counting on paying cash in a deal saw the need to seek mortgage financing, citing the volatility of the stock market,” he says. “This has led purchasers to seek extensions of time to close in order to obtain mortgage commitments and concessions from sellers to get to closing. There is no basis in most instances for cancelling a real estate contract or postponing a closing in an all-cash deal based on the COVID-19 pandemic and the challenges surrounding it.”