I am amazed that as of this week at the end of March, 2020, many in my profession – and their clients – apparently still do not see a great threat from the Coronavirus disease.
At realtor sales meetings this past week, there were discussions of what the Realtors’ associations recommend, and for the rest of the meetings the virus wasn’t even a thing! Announced were ratified deals that were closing (understandably since they went into contract before the order) and then, surprisingly, new listings that were coming on the market. Furthermore, I just checked and as of March 27th, in the same week that the US topped China and Italy in the number of Coronavirus disease cases, with San Francisco paralyzed and gearing up for an onslaught of new cases that will stretch healthcare workers and result in many deaths here, the Multiple Listing Service identified 430 residential listings still “Active” and 54 ”Coming Soon.” Every day I see new listings coming on the market – business as usual!
Under San Francisco and California’s Shelter-in-Place orders, real estate sales are not considered an “essential service,” and the California Association of Realtors (CAR) advises against open houses and private showings. All the same, there is activity going on contrary to the orders:
- There is still a fair amount of buying and selling going on in San Francisco by agents, though admittedly some of this is closing transactions that got started before the crisis stage had been reached here.
- CAR says the current “conditions will prompt listing agents, in accordance with seller’s wishes, to change the MLS listing status to something like hold or withdraw,” or “maintain the listing in an active status, … albeit with an understanding of the limitation imposed on all face-to-face activity” (discussed below). So what has happened? An agent I know says she is aware of an instance where a client seller whose listing was cancelled due to the shelter-in-place (but still kept the same agent) was contacted by other agents trying to get the listing!
- Apparently, owners are still ok with strangers who may have Coronavirus disease coming through their home touching doorknobs and other items to check out the home. All the rubber gloves and hand sanitizer would not give me much comfort if I were a seller!
- Some vacant properties are open “on lockbox,” which means any agent in the city with a lockbox key can enter the place. Even ignoring the risk between visitors and to the owners, of course neighbors are not thrilled with people going in and out!
- One SF agent recently advertised an open house and only took down the ad when people complained, after the ad had run.
- This is not just happening in the city; I just spoke to someone living in Denver who was surprised to see “For Sale” signs going up on homes in his neighborhood.
The National Association of Realtors recommends when shelter-at-home orders are in effect in a given state: “Encourage staff and agents to continue conducting business and servicing clients remotely, including by leveraging available technology, and alternative ways to market properties.” Huh? Generally, it is not and cannot all be done virtually:
- As part of their due diligence, agents are required to prepare their Agent’s Visual Inspection Disclosure by walking through a property. This inspection requires examining things and includes things like opening and closing windows and doors. This can’t be done virtually.
- The vast majority of buyers will want to walk through a property before they buy it (as they should). This can’t be done virtually either.
- This doesn’t even include what would need to be done to get a property ready for that virtual tour – cleaning, painting, and possibly staging – and then getting the photographer in (or the realtor with her iPhone) to take the video.
- And what about falling in love with your new home? And as with any online relationship, there may be some rude awakenings. Hearts will be broken.
The California Association of Realtors, on the other hand, says “Realtors should cease doing all in-person marketing or sales activities, including showings, listing appointments, open houses and property inspections. Clients and other consumers are also subject to these orders and should not be visiting properties or conducting other business in person.” Now, however according to a recent e-mail I received from them, to my surprise “C.A.R. is working diligently with the governor’s office to have real estate classified as an essential service.”
As you can tell, I am personally not for virtual showings or classifying real estate as an essential business, right now. And based on some online realtor groups that I am in, there is a split of opinion among the real estate community as to whether or not these things are good ideas. My take: This would only encourage more activity of people outside of as well as within homes, which only exacerbates the spread of this virus.
Admittedly, it is a tough situation and challenging, and real estate as an essential service certainly needs to be explored in case this situation extends; people may have a legitimate, urgent need to sell a property or find a place to live in coming months. An agent I know is working with someone who is losing their home in foreclosure in what is likely to be a short sale (even more complicated since it requires a bank approval). Maybe someone will be moving for a job. Maybe someone gets divorced (and with 3.3 million unemployment claims this week, sadly we know many will). This has upended a lot of people’s lives.
And maybe we’ll all be back at work by Easter, as some have suggested – but I doubt it! So it may make sense to have real estate, in certain circumstances, be classified as essential. The industry has to develop contingency plans to handle agent disclosures, and best practices (such as logging of all visitors, and procedures for cleaning and the use of gloves and other protective gear) to slow the spread of the virus. A business-not-as-usual approach.
However in the immediate term the goal is to flatten that curve!
Hopefully, it will be easier for realtors to step back temporarily from the real estate market and stay home until the shelter in place orders are removed, with some of the proposed financial support in place. Congress has just passed the Coronavirus Aid Relief and Economic Security (CARES) Act, which includes provisions that will help Realtors financially. Unemployment benefits will be available to independent contractors (which is what we Realtors are) for the first time, as well as federally guaranteed loans to small businesses, and direct check payments of $1,200 for individuals who make up to a certain amount of income.
Supporting our healthcare workers now should be a top priority. Sharon, a wonderful client and friend of mine who is a nurse on the front lines, has been upset to see people who are not complying with the Shelter-in-Place order, as this puts her life and the lives of her colleagues at greater risk. Realtors: let’s stay home for now! Once things have improved, with all of the pent-up demand from buyers and sellers, realtors will be very busy.
In the meantime, thank you Sharon, from the bottom of my heart, for everything you and your colleagues are doing and the brave risks you are taking!
As of March 31, 2020, San Francisco included residential and commercial real estate services as “essential services.” Appointments and other residential viewings must only occur virtually. However, if a virtual viewing is not feasible, it can be shown by appointment with no more than two visitors at a time residing within the same household or living unit and one individual showing the unit; and in-person visits are never allowed when the occupant is still residing in the residence. SF Shelter In Place Order, dated March 31, 2020.
That being said, let’s shelter in place, realtors, and flatten the curve for now!