What Home Buyers and Sellers Can Do During the Coronavirus Shutdown

Moreover, all other taxes also will be deferred until April 25th, 2020, including NYC real estate taxes per an email from REBNY on March 20th, 2020:

All personal tax filing deadlines – at the City, State and federal levels – are now extended to July 15, 2020. All other taxes, including corporate taxes and property taxes, are extended through April 25, 2020. The City is also currently waiving all penalties for late filings.

As you can imagine, this will come as a huge sigh of relief for many buyers and sellers who have invested any spare cash they have already into the markets, and as a result don’t currently have any spare cash to pay the taxman.

Very presciently, the government has decided to defer tax collections so as to not force people to sell assets at depressed levels in order to come up with the cash to pay taxes.

Forbearance on mortgage payments

If you have a mortgage, Governor Cuomo has issued an executive order essentially allowing borrowers to defer payments on their mortgages for three months without penalty or interest.

More technically, banks operating in New York have to grant a forbearance for 90 days to borrowers who experience hardship as a result of the Coronavirus pandemic.

Here’s what REBNY had to say on the topic on an email sent on March 21st, 2020:

Governor Cuomo issued Executive Order 202.9 that requires the New York State Department of Financial Services to issue regulations that ensure under reasonable and prudent circumstances that any consumer in the State of New York have an opportunity for a forbearance of payments for a mortgage for any person or entity facing a financial hardship due to the COVID-19 pandemic for the period of the emergency (currently through April 20).

And just what is forbearance?

Forbearance typically refers to an agreement between a borrower and a lender when the borrower has a tough time making payments. The lender agrees to reduce or suspend mandatory payments for a period of time, and also agrees to not initiate foreclosure proceedings.

For example, it’s common to expect borrowers to resume payments at the end of the suspension period, plus an additional amount to become current on the missed amounts. This includes any missed payments for principal, interest, taxes and insurance.

Moratorium on commercial and residential evictions and foreclosures

On March 7th, 2020, Governor Cuomo issued an executive order halting all evictions for both residential and commercial properties:

There shall be no enforcement of either an eviction of any tenant residential or commercial, or a foreclosure of any residential or commercial property for a period of ninety days.

Here’s what REBNY had to say about the topic in an email sent on March 21st, 2020:

According to today’s Executive Order, there shall be no enforcement of either an eviction of any tenant residential or commercial, or a foreclosure of any residential or commercial property for a period of ninety days. Read the complete Executive Order here.

As a result, this policy helps sellers and listing agents by not unfairly punishing them with a high days on market (DOM) count during this period of inactivity.

Remember that if this policy hadn’t been enacted, sellers would still be punished by many portals even if they de-listed temporarily and then re-listed their home some time later with the same listing agent.

For example, normally StreetEasy requires a listing to be off-market for a minimum of three months before resetting the day count for a re-listed property under the same agent.

Unfortunately this is no longer possible per the NYC Department of Health as well as REBNY, who recently clarified in an email sent on March 20th, 2020 beyond the shadow of a doubt that all in-person business is no longer allowed:

“This means brokers must immediately suspend all in-person business operations including showings and leverage technology to ensure business continuity. “

Property videos and tours can easily be made

Sellers can cope with the Coronavirus shutdown by making sure their listing has a property video or tour. This is one of the best ways to give buyers a dynamic tour of the property without having to make physical contact.

Furthermore, sellers will have more stylistic control over the way their property is presented during a virtual tour by choosing the music, cut scenes etc.

All 1% for Full Service listings already have property videos advertised as part of the listing, and we are in the process of creating and adding complimentary property videos for all Assisted FSBO listings as well.

3D tours can potentially replace showings entirely

At Hauseit, we are in the process of implementing 3D tour technology through vendors such as Matterport. In the meantime, DIY sellers utilizing our Assisted FSBO listing service can create a virtual tour for free using just their iPhone and Zillow’s 3D Home App.

For the latter, they’ll just need a recent iPhone and a tripod or monopod. Sellers can enhance the experience by buying a special, 360 degree camera to create even more immersion.

Board packages and co-op board interviews can be done remotely

On the bright side, the extreme social distancing measures we’ve seen have finally pushed old fashioned co-ops and condos to consider more environmentally friendly ways to handle the board approval process for co-ops and the right of first refusal process for condos.

Instead of old fashioned listing agents demanding to review hard-copy drafts of the board package in-person with the buyer’s agent, and instead of printing out up to 10 copies of a 300 page co-op board package for each board member, perhaps this crisis will push the old fashioned real estate community to start using the plethora of online tools that have been available for decades now.

Per guidance released by REBNY on the electronic handling of board packages and minutes:

Board packages used to screen potential purchasers or tenants should be distributed to Board members without person-to-person contact. Several options exist to do this through electronic document exchange services that ensure security and efficiency (for example, Board Packager). The same principle of using technology should be utilized for the purchaser’s review of the Board minutes, which can also be done under confidentiality agreements.

REBNY also had the following to say about how co-op board interviews should be handled:

Board interviews can occur using alternative and reliable communications systems such as FaceTime, Skype, Zoom or Google Hangout, among others without the interview being recorded. Please coordinate the tool of choice with all parties involved and schedule Board interviews accordingly.

Contracts can be e-signed and closings can be done remotely

The e-signing of purchase contracts has become quite routine in recent years in New York, especially since contracts of sale do not need to be notarized.

Closings however have been more tricky to virtually implement, with one of the primary impediments being the requirement of a notary being physically present for signatures at closing.

This has just been addressed via an Executive Order by New York’s Governor. Here’s what REBNY had to say on an email sent on March 20th, 2020:

Yesterday, Governor Cuomo issued an Executive Order that allows notarization – a critical component needed to conduct real estate transactions – to occur using audio-video technology. This is a huge step for our industry, and we are proud we were able to advocate for and achieve this necessary change during this crisis period. To support a smooth transition from in-person real estate transactions to remote or “virtual” transactions, we have created the Recommended Practices to Facilitate Remote Real Estate Closings Using Technology. Please read the complete guidelines here.