The real estate industry has implemented new technologies that allow buyers and sellers to complete real estate transactions during the Covid-19 pandemic. While real estate transactions are currently a bit more time consuming, these new technologies, along with proper health and safety guidelines, allow the essential service of buying and selling homes to continue in most states. Consult with your local real estate company to find out what the restrictions in your area are.
How long will it take to close on a home?
The average closing use to take around 26 days, now buyers and sellers should be prepared for closings to take as long as 60 days or more. COVID-19 has complicated the process of buying and selling a home and adds to the time it takes to close. Lenders are also busy completing refinancing requests due to current low-interest rates, which may also slow the process for buyers needing a home.
How will shelter in place orders affect the home buying and selling process?
- Marketing your home: While open houses may not be allowed at all in some areas, it is still possible for realtors to show a home as long as the homeowner is willing and everyone follows the CDC health and safety guidelines. Your realtor may limit tours to serious buyers only and rely more on available technology like video tours to show your property. Meetings with your agent can be conducted virtually through FaceTime, Zoom, Skype, or several other applications.
- Home inspections: Inspections are happening again at this point. Buyers are allowed to enter the property along with the inspector but may be required to wash hands, avoid touching surfaces, and wear masks. One must check with their agent for local protocol.
- Home appraisals: During the COVID-19 epidemic, the Federal Housing Finance Authority has instructed Fannie Mae and Freddie Mac to allow exterior-only appraisals or desktop appraisals for the duration of the COVID-19 crisis. These appraisals temporarily take the place of traditional appraisals required by lenders. Desktop appraisals do not require a physical inspection. The data for the property analysis comes from third-party sources like MLS information, Google Maps, etc. Desktop appraisals can be close to as accurate as a full appraisal as long as the data is available. Lenders are looking to change this as soon as possible and as early as next week.
- Home closings: Although the closing process may take longer, it is still possible. Permanent and temporary laws are in place to allow some form of Remote notarization in most states. Both RON (Remote Online Notarization) and RIN (Remote Ink-Signed Notarization) enable notaries to perform and complete transactions without the usual face to face interactions. Using audio-visual technology allows the parties to see documents as they are signed and fulfills the requirement that a document signer personally appears before a notary. The notary follows methods specified by the emergency order to identify the signers, and witness the signing. All RON and RIN signings must have all parties including the lender agree to and sign off on this practice.
The delays you are sure to encounter while buying or selling a home during the COVID-19 crisis are the result of health and safety guidelines that are in place to keep buyers and sellers safe from exposure to the COVID-19 virus.