Can you buy or sell a home during the Coronavirus shutdown? If you were considering move this spring your plans may still be possible, with a few compromises.
By the Governor’s order all in-person real estate activities had to stop in the State of Pennsylvania for an undetermined amount of time. In addition, Allegheny County has a shelter-in-place order in effect until April 30th.
While there have been reports of some agents still showing homes it is worth noting that those showings are in direct violation of these orders and working with an agent that would put the health and safety of clients, and our population as a whole, in danger for their own economic gain should tell you something about the ethics of that agent. Yes, real estate agents are going to struggle through this time like everyone else, but by working together to comply with the orders we can end this mess sooner rather than having it drag on. Don’t work with an agent that isn’t following the law and helping to end this situation.
Even with the restrictions in place it might be possible to still purchase or sell a home if you are willing to be patient and forgo some of the typical steps of a purchase. The Pennsylvania Association of REALTORs recently released a COVID-19 addendum that automatically extends all contract dates by a set amount of time if it becomes apparent that certain things cannot be done to complete the transaction.
While showings cannot occur, some agents and their sellers have been posting virtual tours and video walkthroughs of houses so you can get a better idea of what is inside. A buyer can also make an offer contingent upon a physical inspection of the property at some later date.
Home inspectors are under the same restrictions as Real Estate agents, so if you want to buy during the shutdown you would have to skip an in-person inspection, not something we like to recommend, but still an option. If that is not an acceptable alternative then the best option is to put a very long inspection contingency period in the contract in order to allow an inspection of the home at some point in the future.
Another hurdle is the appraisal. While it is unclear if appraisers are able to go into homes because there is some confusion on if they are in the real estate industry or the banking industry, most have shut down in-person operations. Some lenders are allowing drive-by appraisals, where the appraiser can do their report with information they can get online and a drive past the home. This has been a common practice for refinances, so extending it to purchases is one way to keep a deal moving forward. You should talk with your lender about what steps they have put in place to allow deals to proceed through closing and a good agent can give you advice on which lenders are best equipped to move forward.
Perhaps one of the toughest things to get past is the municipal requirements. Municipalities that require in-person occupancy inspections and dye tests have shut down these inspections, and they are usually required to get the tax lien letters needed for a buyer to secure title insurance, and for the settlement company to be willing to close. It is likely these shutdowns will continue until April 6th or longer. Talk with your agent about the specific issues related to each municipality, some will be easier to get closed than others.
Finally, the closing itself. Settlement companies are still able to operate and are scheduling closings in several different ways. In all cases, only the buyers and the sellers are allowed to come to closing, and they are signing separately. Sellers can still sign ahead of time and not attend closing, but they have to do so in from of a notary. Some companies are doing drive-by closings, some are working towards e-notary signing. Different lenders and counties have requirements for actual in-person signing so companies are trying to comply with the orders in different ways.
As you can see, for buyer’s that are anxious to buy now it may still be possible to get into a new home with compromises to the buying process. Need to sell? Creative solutions are available. Want to talk further about how you can sell or purchase during this time? Give me a call or email me and let’s discuss.
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