COVID-19 and the Real Estate Sales Industry

The COVID-19 Crisis and the resulting response from the federal, state and local government can impact your home purchase in several ways.

Fewer homes will be available for viewing and viewings may come with conditions Some sellers may not be allowing their homes to be viewed. Open houses will not be occurring, although many real estate licensees will be making use of virtual open houses and other software-enabled showing technologies. Properties with tenants in them will unlikely be available for viewing. Some sellers may approve showings with monitored sanitation stations on premise, “hands off” walk through, 6ft social distancing between agent and prospective buyer and limiting the number of people.

In an effort to limit unnecessary showings and to reduce risk, no buyers will be let into private homes with me as agent without verifying through paperwork that they are both willing and able to close in the standard timeframe. This means preapprovals, or proof of funds, or other arrangments that satisfy the typical seller.

Brokers may not be showing homes

While real estate businesses have not been closed by the government due to COVID-19, some businesses have chosen to suspend operations in order to stop the spread of the virus. Check with your real estate broker to understand what their own, and their firm’s policy is on COVID-19. Buyers Must Comply with Social Distancing Guidelines and Orders During Home Viewings On March 23 Governor Brown issued Executive Order No. 20-12. The order is in effect until rescinded by the Governor. In the order the Governor asked all Oregonians to stay home to the maximum extent possible and ordered Oregonians to refrain from engaging in any activity that requires them to be within 6ft of another person unless absolutely necessary. Violation of the order is a Class C Misdemeanor. Thus, a buyer’s ability to legally tour a home during the period covered by the Governor’s order may be dependent upon doing so without coming within 6 feet of the buyer’s agent or any other party. We recommend that buyers discuss this issue with their broker and develop a plan to ensure the social distancing requirements are met. If the requirements cannot be met, we do not recommend touring homes.

Service Providers May Not Be Available or May Be Operating Under Special Procedures Service providers may not be available to conduct services, such as home inspections, in time for you to meet your deadlines under your real estate sale agreement. You should work closely with your REALTOR® to understand the policies and timelines associated with home inspection, appraisal, title searches and closing in light of the COVID-19 crisis. You have the ability to shop for many of these services so if one service provider is not working, you may be able to find another who is. The key is to take care of all of this early on in the process—before you sign the sales agreement—so that you know exactly what you are getting into and you can set a realistic closing deadline in the contract.

March 23rd, 2020 Federal Housing Finance Agency directed Fannie Mae & Freddie Mac to provide flexible alternatives to satisfy appraisal requirements and employment verification requirements through May 17, 2020. Appraisers will be able to use desktop and exterior appraisals only, no interior inspections will be required. Many whole home inspectors are bringing sanitation stations and will fully wipe down any touched surfaces upon the completion of the inspection. The inspector & Decision Maker(s) will be the only persons allowed to attend the inspection (no children or others) Parties Can Incorporate COVID-19 Language into the Sales Agreement Under the standard Residential Real Estate Sales Agreement used by many residential real estate licensees in Oregon, a delay caused by a COVID-19 related condition would not necessarily result in an extension of contract deadlines, and buyers are at risk of losing earnest money for non-performance. Oregon Real Estate Forms created OREF-96 as a document that parties can use to automatically build in a 20-day extension to the deadlines in the standard Residential Real Estate Sales Agreement for COVID- 19 related delays. Parties can also use a standard contract addendum to set their own terms for COVID- 19 related factors, or simply include longer deadlines and a later closing date in the Sales Agreement. We encourage buyers to consult with an attorney before structuring or signing any COVID-19 related provisions if they have any doubts about what the provisions mean or their effect.

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