What Home Buyers and Sellers Can Do During the Coronavirus Shutdown

Dear friends and valued customers, these are challenging times for all of us. Effective as of 8pm on Sunday March 22nd, 2020, all non-essential gatherings of individuals are prohibited until further notice per Governor Cuomo’s executive order New York State on PAUSE.

This means all in-person business activities including open houses, showings, walkthroughs, inspections, board interviews, board meetings and closings are cancelled or postponed.

Furthermore, all non-essential businesses are to be closed which means our offices and the offices of our partner brokers are closed until further notice.

However, the Coronavirus shutdown only applies to physical office spaces. It does not dictate what we choose to do from home. This means it is completely legal for both you and our teams to continue working from home or wherever one resides.

As a company, we’ve always favored a 100% remote workforce, and this applies to all of our graphic teams, video editors, web developers, content writers and executive assistants as well as many of our partner brokerages. As a result, we are well positioned to weather these turbulent times because our teams are already used to working remotely.

We’ve compiled a list of tips, alternatives and actionable items that home buyers and sellers in New York can immediately implement to make the most of the current situation.

Remember that our partner agents are still available via video conferencing, and you can always sign up for any of our services throughout this crisis.

Remember that other buyers and sellers as well as our partner brokers are eager to hear from you. Other buyers and sellers still have plans to move, buy, sell or rent and many have expressed an interest in still doing so despite market conditions.

So if you’re still interested in making a move, please don’t hesitate to reach out to us as well as other potential counter-parties to check in.

We firmly believe that we will come together to find a way out of this current situation soon enough, and that our business together will be better than ever.

More time to pay and file income taxes

Taxpayers can take a welcome sigh of relief this April 15th. The filing and payment of federal, state and local income taxes have been deferred until July 15th, 2020.

This means that if you owed additional taxes for the 2019 tax year that would normally be due by April 15th, 2020, you can defer the payment of these owed taxes until July 15th, 2020 without penalty or interest.

Additionally, the deferral applies as well to the payment of quarterly estimated taxes that self-employed workers typically have to pay on January 15th, April 15th, June 15th and September 15th in lieu of automatic tax withholding on W-2 workers’ paychecks.

Any quarterly estimated income taxes normally due on April 15th, 2020 can be deferred until July 15th, 2020 without penalty or interest.

More time to pay & file taxes at all levels, halt on evictions, foreclosures and forbearance on mortgage payments. Virtual alternatives to showings & more.

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.

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Pause on evictions, foreclosures and mortgage payments

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.

Typically, the borrower must agree to a plan to get current, though this will vary by lender and how a forbearance agreement is negotiated.

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.

The days on market count for listings is paused

Home sellers can rest easy knowing that REBNY has asked all 3rd party syndication partners to temporarily suspend their days on market count during this crisis.

Here’s what REBNY had to say about the topic on an email sent on March 19th, 2020:

Today, REBNY issued an order to stop Days on Market (DOM) calculation across all consumer-facing portals in New York City that participate in the Residential Listing Service (RLS) network. We have notified all RLS partners and expect to disable DOM calculation as of Friday, March 20, 2020 until further notice. If you have any questions, please do not hesitate to contact us at RLSsupport@rebny.com.

Fortunately, even the popular website StreetEasy (owned by Zillow Group) has complied despite not being a RLS syndication partner (StreetEasy requires agents to manually upload listings on their website as of 2020).

Here’s what’s StreetEasy had to say about the matter on an email they sent out on March 22, 2020:

For on-market/active rental and sales listings, the ‘Days on Market’ field will be temporarily replaced with ‘Counting Suspended’ and no longer display a rolling count of days to prospective buyers and renters. This is effective immediately on StreetEasy.com (desktop and mobile web), and will be incorporated into the StreetEasy app soon. We will revisit our policy and how best to reintroduce accurate Days on Market data once this situation normalizes.

A high days on market number is detrimental to a listing as it implies that a listing hasn’t sold yet due to some undesirable factor.

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.

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Viable alternatives for in-person business activities

Video conferencing as a replacement for in-person meetings

There are a plethora of video conferencing tools available today, from paid ones such as Zoom to free ones such as Google Hangouts or Skype where you can have a face-to-face with your real estate agent, mortgage broker or banker, real estate attorney, buyers and sellers without ever having to leave your home.

For example, recently one of our buyer clients and her husband wanted to chat with one of our partner agents live for the first time. They were able to do a group video chat and finally meet each other face-to-face, albeit virtually, and have a group discussion about the status of their home search.

Some of you may be thinking, is all of this really necessary? Are there any exceptions to the Coronavirus shutdown?

For example, can my agent stop by my apartment to take a video tour or some additional photos during the shutdown?

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.

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Disclosure: Hauseit® and its affiliates do not provide tax, legal, financial or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, financial or accounting advice. No representation, guarantee or warranty of any kind is made regarding the completeness or accuracy of information provided. Hauseit LLC is a Licensed Real Estate Broker, licensed to do business in New York under license number 10991232340. Principal Office: 148 Lafayette Street, New York, NY 10013.

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