“Total confusion” on whether appraisals, walk-throughs, virtual showings are allowed

Brokers navigate gray areas in New York’s work-from-home order

Are virtual showings allowed? Brokers are navigating a host of gray areas as they adjust to doing business remotely. (Credit: iStock)
Are virtual showings allowed? Brokers are navigating a host of gray areas as they adjust to doing business remotely. (Credit: iStock)

Are appraisers permitted in homes? Are virtual showings allowed? Can brokers do final walkthroughs with buyers?

These are among the questions causing confusion in the real estate industry as brokers — classified as “non-essential” and prohibited from showing homes — try to navigate a new world of doing business remotely.

In an email to members last week, the New York State Association of Realtors said it had sought guidance from the state on a series of questions, including whether brokers can take photographs or film video inside homes, whether brokers can conduct final walkthroughs, and whether brokers can open the doors of properties for appraisers or home inspectors.

Reached this Tuesday, NYSAR’s Mike Kelly said no clarification had been received.

“We have asked Empire State Development Corporation to consider real estate licensees and their business as ‘essential’ and we await a reply,” he added, referring to the state agency implementing Gov. Andrew Cuomo’s work-from-home order.

Many brokerage chiefs are now offering direction based on their interpretation of the rules.

“It’s a constant sharing of information,” said Halstead CEO Diane Ramirez, noting that her team was in regular contact about everything from which banks are accepting e-notaries to how brokers are navigating virtual closings.

Ramirez is advising agents not to enter properties for business purposes, but encouraging them to get creative, including asking sellers to shoot video when they can.

“There’s total confusion,” she said of the rules. “We do need guidelines that are very, very specific. But without getting guidelines with the nuances of it, we have to treat it by the letter of the law … we cannot conduct business by going into properties.”

Empire State Development did not respond to requests for clarification on several issues.

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Moiz Malik of Brooklyn-based firm Nooklyn said he was also advising his team against virtual showings that involve entering apartments. “What we are doing is sending renters pre-recorded videos of apartments instead,” he said, adding that they had rented several apartments 100 percent remotely.

Jonathan Miller, an appraiser with Miller Samuel, said despite the lack of clarity around whether appraisers are considered essential workers by the state, he was confident they are, based on the state’s inclusion of “financial services” on its official list.

However, Miller said he had stopped his team from conducting any interior inspections in Manhattan during the pandemic because of the risk of transmission.

“In the suburbs we can do drive-bys where you can drive your car, go up to the front of the house … or if it’s vacant we can go into the property,” he said. “But no contact with people, directly.”

In its email to members, NYSAR said it was “aware that some lenders have been telling appraisers they are essential as they perform an essential function of the mortgage process, but until definitive guidance is provided, this is only the opinion of the lender, not the state.”

Last week, a coalition of five real estate and professional appraisals organizations sent a letter to state and local governments asking that they declare appraisals an essential service, in an effort to clarify the issue in states where it remains unclear.

As the industry comes to the realization that New York’s stay-home order will likely be in place for some time, the Real Estate Board of New York has also tried to clarify best practices as brokers move their deals online.

“REBNY has requested that all local county clerk and/or registrar offices be granted the authority to accept and record documents electronically, and allow title searches to be performed electronically, where the technological capability exists,” said broker counsel Neil Garfinkel. “For those county clerk and registrar offices that do not have such technological capability, these offices should be maintained by appointment with minimal staff observing the appropriate social distancing protocols prescribed by the state and local health departments.”

While New York classifies real estate as non-essential, several states, including California and Washington, have gone in the other direction. A recent federal advisory from the Department of Homeland Security also classified real estate as an essential business.

Write to Sylvia Varnham O’Regan at so@therealdeal.com

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