How Homes are Shown
1. Mayor Walsh has asked that agents not show apartments occupied by tenants. This will certainly delay renters’ ability to find a new apartment.
2.Gov. Charlie Baker’s March 15 ban on gatherings of more than 25 people in Massachusetts affects open houses for residential properties. Many agents have made the decision to hold open houses – there are a total of 760 Open Houses scheduled for this weekend in the Greater Boston area. In some far-flung towns, the odds they will have 25 people in at once are non-existent. In areas where a large number of attendees is a possibility, some agents are having Open Houses by appointment only, meaning you will have to make an appointment during that 2-hour window. They will only allow people in during the window of their appointment. This is more efficient for the Seller as the house would only have to be disinfected once after the Open House is over. In the hotter markets, it only takes one Open House to get the property sold.
3. Listing agents will rely more on video tours and floor plans to show homes online. They may even do the tour for you with their smartphone to minimize the number of people who come in the home.
4. Sellers and Listing Agents are going to expect people viewing the homes to be serious Buyers and will discourage window shoppers by asking to see pre-approval letters before they show the house. I can see List Agents asking for proof of seriousness in other ways, a bio on the Buyer – why they are looking, timeline, etc. So, if you are a serious Buyer, it wouldn’t hurt to write something up and to have your pre-approval in hand.
5. Sellers who are fortunate enough to have a vacation home may retreat to those homes so the property on the market can be shown unoccupied.
If this goes on long enough, it could change the fundamental on how homes are shown moving forward. We’ll revisit this topic in a few months to see what the landscape looks like.
Municipal and Government Services
With cities and towns looking to protect their employees, the municipal services required to close on a home will be affected. Fortunately, the response has been fairly quick on some fronts.
1. Smoke Detector Inspections – the Governor has signed an Executive Order providing for the deferral of smoke detector inspections. The Order went into effect immediately and will remain in place until the declared state of emergency is lifted. The Order provides that the buyer must agree in writing to be responsible for equipping the property with approved smoke and carbon monoxide alarms. Once the state of emergency has been lifted, the required inspections must take place within 90 days.” – by the Buyer, not the Seller.
2. Water Meter Readings – in towns that have automated readings or that allow the listing agent to read the meter, final water bills should not be held up. However, if the automated reading is not working or you live in a town where a representative from the water department must come out to read the meter, your closing could be held up. If you are my client I am already on top of it.
3. Recording the Deed – most Registries have now set up the ability to record deeds electronically. So, this aspect should not hold up closing on a property.
Other Services
1. The Closing – Attorneys are changing how they conduct closings to limit social interaction as much as possible. Sellers can typically give their attorney power of attorney to sign documents for them. You will need to meet with a Notary for this. I am a Notary, so if you will need me, let me know. This is something that also must be done in person, but there are precautions we can take. The proceeds can then be wired or mailed to the Seller. If you are selling your home, have a discussion with your attorney about this now.
If you are a Buyer, the lender requires that you sign the loan documents in the presence of the bank attorney (which is typically your attorney). No one else needs to be present. The Seller can sign their documents in advance. So, if you are a Buyer and you are concerned about social distancing, please discuss with your attorney.
2. Movers and Tradespeople – If you have a transaction in process, make sure all the service providers you will be using are available and that both you and they have health safety procedures in place – moving company, appliance delivery, tradespeople, etc.
3. The Bank – if you are going to need a bank check for the closing, make sure your bank will be open as these must be obtained in person at the counter. If that will be problematic, speak to your attorney about wiring the funds.
The Economic Impact
It goes without saying that with businesses closing down and people staying home, the economy is being hit hard and fast. Because of this, the FED called for an emergency interest rate cut of 25 basis points to a range of 0-0.25 percent and $500 billion round of quantitative easing — including the purchase of $200 billion in mortgage-backed securities.
It’s important to note that a rate near 0 percent does not mean there will be a further drop in mortgage rates – that remains to be seen. Let’s see what next week brings. If it does lower rates, there will be a higher demand for refinances and it may entice home buyers as well.
In addition to lowering rates, the Fed engaged in a $500 billion round of quantitative easing, which is the Federal Reserve outright purchasing assets it doesn’t traditionally buy to pump liquidity into the market. In this case, it was mortgage-backed securities and treasuries of longer maturities. Some homeowners will find it appealing to refinance rather than sell. This might tighten inventory even more than current levels. Inventory levels were low before the virus hit.
Mayor Walsh has banned all construction in Boston beginning March 16, for two weeks, at which time they will revisit the topic. That means all big and small projects must be stopped and the work zones secured, the mayor said. The only exceptions will be emergency projects, mainly roadwork and gas hookups. Naturally, this will have a negative impact on construction workers and builders.
Who I Worry About
Certainly, this is going to immediately impact people who have lost their jobs and income due to businesses closing such as the aforementioned construction workers.
It is estimated that up to 75% of people in this country live paycheck to paycheck which means they cannot pay rent, their mortgage or buy food if they miss even one check. There were 20,000 unemployment claims on Monday, more than in all of February. That is very worrisome.
The Senate passed the first phase of Covid-19 relief which includes free testing and paid sick leave.Of course, if you don’t have a job, paid sick leave doesn’t help. But it should help all the people still working because they are in vital positions that don’t usually get any sick time – people working in cleaning, food service, etc.
The second phase could take longer as the Senate debates what financial relief will entail. I am sure you have read that Republican senators are talking about making it income based going by 2018 tax returns. This is problematic on more levels than there is room to discuss here. Money needs to get in the hands of people whose hours have been cut, people who have lost their jobs and small businesses who have had to close. Many people will need money this week to pay their April rent. Chuck Schumer is proposing a moratorium on evictions and foreclosures which be of great immediate relief. Let’s hope that get passed soon.
Of course, that begs the question of what happens to landlords who are not able to collect rent? Not all landlords are rich slumlords. Some need the rent to pay the mortgage, insurance and tax on the rental property. Hopefully, people will get enough relief to be able to pay their rent.
Possible Areas for Relief
If you have been affected economically, make sure to check with your mortgage holder to see if you can get a modification or delay payments due to financial hardship.
If you are going to need to wait for a relief check or unemployment check, speak to your landlord now. It is best to come to an agreement before you are late on a payment. Legally, a landlord can evict you if you are even 1 day late with rent.
Most cities and towns have established websites that outline all they are doing to help people in their community.Here is the link for Newton
If you have questions on any of this or you will be selling soon and need to discuss how that will play out, just reach out to me. I’m home!