Webinar Recap: Residential Real Estate Transactions and the Pandemic
Usually, in mid-August, the Puget Sound residential real estate market slows a bit as people take advantage of the last long days of summer. Not so this year. Velocity is as high and the buyers who are in the market are highly qualified and very motivated to buy.
However, the selling process is a little more challenging thanks to health and safety restrictions and requirements. Here’s why:
Vacating Tenants: The evictions executive order was recently amended so property owners wishing to sell can issue notices of intent to vacate. However, in most cases, the tenants still have to leave voluntarily or be forcibly vacated. That can delay the selling process. Be sure to check in with local city-wide rules governing timeframes concerning such notices.
Key Takeaway: Don’t bring properties to market unless you’re sure tenants will be fully vacated in accordance with your sale schedule.
Surveys, Inspections, Repairs & Cleaning: Some trades are working at less than full headcount and those who are working are busy. This can cause some slowdowns in the sales process. Inspections and surveys are critical items to plan well in advance when making an offer to ensure that contingency timeframes can be met. And with cleanliness more important than ever, deeper and more frequent housekeeping is required, which also takes time.
Key Takeaways: Strengthen your relationships with tradespeople to facilitate rapid response. Manage seller expectations on timelines.
Staging & Photography: Stagers and photographers don't want the risk of exposure to COVID-19 and are requesting work to alone or without in vacated homes or at the very least when residents aren’t on the premises. Coordinating these requests could mean delays in work being accomplished and less control over the final product.
Key Takeaways: Help sellers understand that flexibility and patience are key. Ensure that you are working with known and trusted stagers and photographers as most of the work will be done without the input of the seller and / or seller agent on site.
Showing: With traditional open houses still not happening, brokers have to rely on individual showings with masks on during and cleanings completed in between. Despite the decreased volume of showings, The increased safety measures mean that the average buyer tends to be highly qualified and significantly interested. Some properties are good candidates for 3D video tours, which take some time to create but are useful in a market like ours that has a lot of relocating buyers who can’t fly in for a personal tour.
Key takeaway: Showings are still happening, just using non-traditional methods given the need to limit contact during COVID-19.
Inspections: Although the Northwest MLS (NWMLS) amended its Form 35 Inspection Addendum in 2019 to prohibit buyers from sending any portion of inspection reports to sellers, we are still seeing a lot of breaches concerning this provisions. The breach of this provision is not clarified in the addendum and the seller against should considered additional language to specify a specific remedy in the event of a breach.
Key takeaways: When using NWMLS forms, Buyers should obtain the seller’s consent to send relevant sections of the inspection report. Sellers should create specific remedies including waiver of inspection contingency and agreement that earnest money is released to the seller and is nonrefundable.
Escrow & Titles: Most of the earlier backlogs have been cleared. That’s the good news. Despite a new law allowing digital signatures and notarizations, most title companies aren’t taking advantage of it, preferring to establish protocols for in-person signings and using mobile notaries.
Key takeaway: Make sure clients are clear on the procedure.
Force Majeure. A new NWMLS document, Form 22FM, contains force majeure provisions for extending periods to allow the performance of the contract, such as surveys, inspections, escrow and notaries.
Key takeaway: This does not excuse performance due to COVID-19 it is only an extension of the time to fulfill contractual obligations.
For more details on any of these factors, watch the full webinar below or contact us. Thank you to our guest, Nick Glant with Compass for joining us for the webinar. You can contact Nick and his team here.
Our next webinar on September 10 from 1:00 – 2:00 p.m. will be on office leasing and we will have commercial real estate expert Derek Hermsen joining us. Register here.
