The COVID-19 pandemic has caused unprecedented impacts on the residential real estate market. The warning signs for Phase I were not easily detected, and almost overnight, the parties to such transactions, as well as those essential to closing such transactions, had to re-evaluate their means and methods of conducting business. Below are some tips for those buying or selling real estate in a pandemic:
Tips for Buyers
- Add a specific contract amendment addressing potential coronavirus-related delays. Many state realtor associations have provided a coronavirus addendum for use by agents. For example, the Florida Association of Realtors has set forth a Coronavirus (COVID-19) Extension Addendum to Contract to address coronavirus-related delays. This particular Addendum may be utilized with all existing Florida Association of Realtors contracts, inclusive of the various FAR/BAR contracts.
- In Collier County, Florida, the Naples Area Board of Realtors (“NABOR”), have both a coronavirus addendum and amendment for use with its NABOR existing form contracts. Both the State and local coronavirus addenda provide for time period extensions for the closing date, financing period, inspection period, title cure period, and due diligence periods, as well as allowing the Buyer to receive an escrow deposit refund under select circumstances of lender loan disapproval.
- Notwithstanding the benefit of these new addenda, buyers should seek legal counsel to review and/or customize a coronavirus addendum or amendment to maximize the buyer’s protection.
Tips for Sellers
- Consider an addendum to your listing contract if you wish to prohibit in-person showings. Discuss with your realtor virtual alternatives, or limiting showings to pre-qualified buyers.
- Consider an addendum to your sales contract if you wish to control or limit vendors/inspectors coming through your home and the protective gear they must utilize.
- Seek legal counsel before signing a contract to determine if it contains a “force majeure” clause to allow the buyer to cancel the contract for coronavirus-related issues, and whether the contract should be modified.
- Consider allowing a buyer to include a coronavirus addendum to the contract, as it is an enticement for a buyer to make an offer in the first place.
Whether you are a buyer or seller, be prepared for virtual technology. The trend will likely be online mortgage application preparation and closing document execution. This could be a serious issue if you have outdated computer equipment. Check with your attorney, closing agent, or lender to discuss your options. You may wish to upgrade computer equipment to utilize the new technology.
If you have any questions concerning the sale or purchase of residential or commercial property in Florida, please contact me at firstname.lastname@example.org or by phone at 239-344-1378.