Closing During COVID-19: How to Keep Your Real Estate Transactions on Track

Amitree

May 13, 2020

The 2020 spring real estate season has not turned out to be what any of us were expecting. With nearly 214 million people still under some form of stay-at-home order, closing during COVID-19 is no easy task.

Like many real estate agents, you may be wondering how to keep your real estate transactions on track and how to keep your business going.

While these are challenging times for everyone, the good news is that home sales seem to be starting to move in a positive direction. The DHS has deemed real estate an essential service, some states are now easing restrictions, and many people are embracing new technologies.

Given all of this, buying and selling a home during COVID-19 is possible despite the challenges. With some flexibility and creativity, you can start new transactions and keep them moving forward and help your clients make it to closing day.

Here are three tips that can help you make it through:

Check for Status Updates, Frequently

One of the challenges of COVID-19 is that it’s a moving target.

Today’s current status in your city or state could change tomorrow. Officials could ease restrictions making appraisals, inspections and signings easier, or tighten them making closing more difficult.

In this situation, one of the best ways to make sure your transactions stay on track is staying in the know.

Sign up for local alerts and email newsletters. Call or email everyone involved in the transaction at least once a week to check on everyone’s health, progress, questions and challenges. Remember to loop in the:

  • Appraiser
  • Inspector
  • Title / escrow company
  • Mortgage lender
  • Closing team
  • Deed recorder

It’s a lot of work, so save yourself some time by using Folio’s powerful AI tools to keep your email updates organized so you can streamline your transaction communications.

Get Everyone the New Paperwork

Closing during COVID-19 comes with a lot of uncertainty. The typical milestone deadlines agreed to in the purchase agreement for appraisals, inspections, closing and move-out dates may become unworkable and require changes.

Adding a COVID-19 clause or addendum to the purchase agreement is something a lot of agents have already done. NAR offers helpful advice on the topic and you should check with your local real estate association for any guidance or new requirements.

While it doesn’t let the buyer or seller off the hook for just anything, a coronavirus clause can offer the necessary flexibility to get the deal done, something not offered by the usual force majeure provisions.

Of course one question is how to get everyone the coronavirus amendments, as well as all the other paperwork, when there are lockdowns and stay-at-home orders for a pandemic.

DocuSign is a Folio partner and the industry leader in secure and legally binding electronic signature services. Without having to meet face to face, you can get all your transaction documents signed to keep the closing process on track.

Meet Colleagues and Clients Online

It’s not possible or advisable to meet with colleagues and clients face to face in a pandemic, and that’s a big challenge for a business like real estate.

Appraisals almost always involve a firsthand look at the house. Inspections always have to be done in person. And under normal circumstances, closings happen with everyone seated around the same table.

But around the country, real estate service providers are finding coronavirus workarounds.

The FHFA has offered flexibility on appraisals until at least June 30th, meaning your client can get a desk appraisal based on comps and market data, or a hybrid appraisal with a drive by visit or even a look-through with video chat.

Inspections have to be done in person and sometimes can’t be waived due to state regulations or insurance requirements. But many inspectors are suiting up in protective gear and holding post-inspection findings meetings virtually.

Other client meetings, from making an offer to reviewing the purchase agreement to the closing itself can often be done remotely.

Tech tools such as Zoom, GoToMeeting, and FaceTime can all help you and your clients stay connected and on track with the process. But be prepared to help clients get up to speed if the technology is new to them.

In states where the closing can’t be remotely, signings have been held in separate rooms or even in the parking lot with the buyers and sellers each in their own vehicles.

There’s no question that the current situation is unprecedented. But with some flexibility and creative solutions like Folio, DocuSign, and Zoom, closing during COVID-19 is almost always possible. With these tools, you can help reassure clients that their real estate transaction will stay on track.

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