Cape Cod real estate professionals adjust to pandemic
Residential estate brokers and agents are scrambling to determine what Massachusetts Gov. Charlie Baker's emergency order, which went into effect Tuesday, means for their industry.
But what will definitely occur are major changes in the way buying, selling or renting of properties will be handled, at least in the short term.
"This is having a tamping effect on what's going under agreement," said Ryan Castle, chief executive officer of the Cape and Islands Association of Realtors.
Open houses and tours of homes have virtually ground to a halt in attempts to curtail spread of the new coronavirus.
"Obviously it is going to produce less sold houses in April, May and June," Castle said.
Some are finding innovative ways to deal with the current restrictions. Castle's organization suggests all meetings such as listing appointments and buyer consultations be held virtually.
"There are sellers doing things like Facetime touring of their houses with buyers," Castle said.
As businesses shut down under Baker's emergency order, massive layoffs and work reductions will likely scuttle some mortgage applications and have made some buyers skittish enough to back out of existing deals as well, "but there are also many who are interested and staying committed," Castle said.
The focus right now is primarily on wrapping up closings on properties under agreement.
Real estate attorney Elizabeth Cotter said legal and professional services related to financial matters are listed under exemptions to Baker's order.
"We closed our offices to the public," Cotter said.
Most documents will be handled online.
"There are several online templates that can be signed electronically," Cotter said.
"Wet" or real, signatures are only required on deeds and mortgages, she said. The offices can accomplish this via FedEx, UPS or email that the parties can print out and sign.
"Most real estate attorneys have done recording online at registries for several years," she said.
Baker signed a change last week that allows a temporary waiver of the requirement to have fire and carbon monoxide inspections done before closings. Buyers can sign an agreement that they will assume responsibility for having the inspection done within 90 days of the end of Baker's emergency order.
With town halls closed, checking for the most current liens on properties is more difficult. An escrow account may be set up to cover such contingencies, Cotter said.
"We can still do all things we do to protect the buyer and seller," Cotter said. "We're asking everybody to share a little of the risk."
Cotter said the refinancing business remains brisk, since interest rates can be as low as 2.8%.
The summer rental market on the Cape is taking a beating.
"The phones are ringing off the hook, but it's for cancellations," said Dennis Realtor Patrick Foran.
Right now, many owners of rental homes are taking a wait-and-see approach, he said.
"They're hoping in a month or so the world is in better shape."
Blake Decker, an investment property specialist at Pretty Picky Properties on the Lower Cape, handles high-end summer rentals averaging $6,500 to $7,000 per week.
"It's been a dead stop on new inquiries since last Thursday," Decker said. "The only calls are questions on cancellation. People are in panic mode."
Peak season on the Cape is only about nine weeks long, he said. "We were about 60% booked before this," he said. "The optimistic side of me hopes this is resolved in May and we can fill in some holes."
Owners are asking whether they should drop their prices, but Decker thinks assurances that renters can get their money back may persuade people to book again.
"We're working to make cancellation policies more lenient to encourage people to book," Decker said. "We should have that done by the end of the week."
Foran said he has begun reaching out to owners of those rentals, which are currently vacant, to see whether they would consider opening them up for use by doctors and nurses who come to the Cape to help out.
Castle said he does not expect that property prices will drop when the governor's emergency order is no longer necessary and people start to look for new homes.
"When you have a lot of pent-up demand, I think it could accelerate prices quicker," Castle said. "That's why it's important that people who are interested keep looking."
"There could be a squeeze," he said.