The state has clarified its position on residential and commercial showings, saying that while they have been classified as “essential business,” they can only be done virtually.
The clarification comes after the New York State Association of Realtors emailed members Wednesday night to say that several real estate services, including commercial and residential showings, had been granted “essential business” status by Empire State Development. The agency is tasked with determining which businesses are essential during the pandemic.
A spokesperson for the agency confirmed the designation Wednesday night, but said social distancing was encouraged while the state was on pause to stop the spread of Covid-19.
However on Thursday afternoon, the agency released a statement clarifying that showings could only be conducted virtually.
“Being an ‘essential’ industry does not mean business as usual — business can only be conducted if social distancing and other public health protocols are followed and all must be doing everything they can to help stop the spread,” Matthew Gorton of Empire State Development said in a statement. “For real estate, that means brokers can only transact business in their offices or show properties virtually, and anything else is off limits.”
Under the guidance, brokers can visit properties to conduct virtual showings, and they can oversee transactions or signings at their offices as long as they follow social distancing protocols. Appraisers and inspectors can also visit properties for inspections.
Since Gov. Andrew Cuomo issued a statewide order for all non-essential workers to stay home, Empire State Development has been fielding regular inquiries from individual businesses and agencies asking to be granted “essential business’ status. According to its website, an essential business is “any business providing products or services that are required to maintain the health, welfare and safety of the citizens of New York State. Their being designated ‘essential’ means they do not have to adhere to the 100% in-person employee reduction the governor issued in his Executive Order.”
The agency’s attorneys review the applications and make decisions on a rolling basis — updating ESD’s website periodically. There has been no official statement posted about real estate services, though one is likely in the coming weeks.
News about the latest guidance led to widespread confusion in the real estate industry about what it would mean for brokers, and prompted the Real Estate Board of New York to caution members that the guidelines were “not final.”
On Thursday afternoon, NYSAR president Jennifer Stevenson issued a statement in support of the move.
“Ultimately, [Gov. Andrew Cuomo’s] office made this determination, but we also believe Empire State Development made this decision because it believes the legal requirements to complete real estate transactions can be done safely,” she said. “We agree, and we will all be required to modify how we approach our work to comply with state and federal social distancing requirements.”
Pam Liebman, CEO of the Corcoran Group, said NYSAR’s original email blast took the industry by surprise. “It caused quite a panic amongst our agents who have all been instructed to follow safety guidance and operate virtually during this crisis,” she said. She said she was “relieved” to see the actual guidance put “health and safety first.”
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Since the outbreak, residential brokers have grappled with the question of whether they should continue in-person showings. A more recent concern has been how to handle closings, and whether agents are permitted to enter an apartment to take a video for the purposes of virtual tours.
Sources said NYSAR and REBNY had been working with the state to determine if certain aspects of residential transactions were essential, with the goal of keeping in-progress deals going. “That’s the only way I’m going to have freaking revenue,” one brokerage head said on the condition of anonymity.
“I don’t think the intention was to encourage real estate professionals to go out there, open offices and do showings,” said Bess Freedman, CEO of Brown Harris Stevens.
In fact, most brokerage heads discouraged agents from doing so. “Doing a showing is not for the good of everybody,” said Diane Ramirez, CEO of Halstead. “We don’t want any more people dying. A showing is not worth it.”
Michael Graves, an agent at Compass, said no matter what the EDS said, he would not let members of his team go out in the field to potentially spread the virus.
“It’s in direct conflict with everything we’re learning from the doctors and scientists about the spread of this virus,” he said. “No one who’s a responsible, reasonable person would go into the field, walk into people’s private homes and put them at risk.”
Several other agents echoed his sentiment — noting that in a typical day (pre-coronavirus), they would be running all over the city, traveling by subway and Uber, and coming into contact with countless clients and building employees.
But Eddie Shapiro, CEO of Nest Seekers, said he can’t tell agents what to do because they’re independent contractors. “I can recommend they take every form of precaution,” he said.
At the same time, Shapiro — who said he’s recovering from Covid-19 himself — believes the industry needs to “think about the day after” the pandemic.
“We have to think about continuing to function as a society and so the guidelines, to me, is just making it so that you don’t feel like a criminal if you go out to do something,” he said.
Write to Sylvia Varnham at so@therealdeal.com and EB Solomont at eb@therealdeal.com