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Hamptons.com
January 21, 2021

How Hamptons Real Estate Agents Are Coping With COVID-19 Restrictions

John A. Viterittiby John A. Viteritti
in Real Estate
Home Real Estate

In recent articles posted in the past several months, we have explored the many ways that COVID-19 has affected the real estate industry, including the East End of Long Island. In this article we delve into how real estate agents have had to adapt to the challenges imposed by Governor Andrew Cuomo’s Executive Orders enforced by the Departments of State and Health. I interviewed (by phone) New York Licensed Attorney Ed Reale, Brokerage Manager of Sotheby’s International’s South Fork offices. Ed’s 40 years as an attorney and 24 as a brokerage manager in the Hamptons make him an especially valuable resource. Currently Ed supervises 80 agents, including licensed salesperson and associate brokers.

I asked Ed to share the process of listing properties for sale, showings, contract signings, property inspections, appraisals, mortgage commitments, and closings, all necessary but differently executed as a result of COVID-19.

ER: To start with, in the beginning during Phase 1, as a result of the Governor’s Executive Orders, the Department of Health closed down our offices and we weren’t permitted to do showings. We were permitted to do things in a limited fashion and are still under those restrictions. Now we are allowed to do in-person showings and open houses, however there are strict protocols about how they are to be conducted. For example, if you are having an open house, the occupants are not permitted to be in the house. The house has to be cleaned prior to the open house, and only one group at a time may be in the house. Agents are either making appointments for showings, or requiring groups to wait in their cars in order to restrict the showings to one group at a time. Masks and social distancing are also adhered to. The agents also clean surfaces in between showings.

Prior to COVID-19, the agents who got a listing would hold an open house for the agents in their office, and another for agents of other offices. Is that still being done?

ER: Yes, they are, and handled in exactly the same way as public open houses. Also, agents are conducting virtual showings through the use of video devices, and conducting the open house at an announced time for other agents to view on Facebook. The listing agent conducts the showing in person, followed by another agent who holds the camera. Virtual showings to prospective buyers have become very popular as opposed to just photographs.

How has the process of showing homes under these rules affected homeowners?

ER: What we do, although not required by the Governor’s order, is have the homeowners, customers, and tenants, if any are residing at the property, sign a disclosure acknowledging that they will cooperate with all of the requirements that we are obligated to abide by.

What has been the response of the public and industry professionals to this whole new way of conducting business?

ER: We have found both the public and the professionals involved extremely cooperative. The concern over the effects of the virus have resulted in cooperation of all parties involved.

Do you see these changes surviving the end of the pandemic?

ER: The virtual showings started before COVID and accelerated since. So I do see that continuing. It does facilitate the process.

How do home inspectors, appraisers, fit into the process?

ER: We handle it the same way. The agent goes to the property in advance of the inspector or appraiser, makes sure the lights are on, the heat or air conditioning as the weather warrants, and any other steps necessary to prepare the house for inspection. We also have them sign the same disclosure we require of all others who come to the home.

We also talked about listing agreements, buyer representation agreements, leases, and contracts for sale of the property, as well as agency disclosure forms, lead disclosure forms, fair housing disclosures, all of which may be transmitted electronically if in-person is problematic. Contracts for sale of the property must be in writing to be enforceable. Electronic signatures are permitted, as well as a notary’s acknowledgement. Listing and buyer representation agreements, as well as leases that cannot be executed within one year, must be in writing to be enforceable.

ER: What has slowed down the process is the fact that it takes longer to extract information about the properties from the municipalities due to the virus and lack of online capabilities. The Town of Southampton does have excellent online capabilities, but no other municipality has that capability. The title companies are also affected by these slow downs, which can also delay closings.

What about mortgages, appraisals, how are they being handled?

ER: Typically, borrowers are not meeting face to face with lenders. More communications are being done over the phone and online. Disclosures and applications are being sent by email. Most refinances are being done online, and most of the closings are limited attendance closings. Buyers and sellers are giving power of attorney to their lawyers. It’s not uncommon to have two attorneys and the title closer present at the closings.

We often hear that buyers are buying homes sight unseen, all cash, not quibbling about price. Is that fact or fiction?

ER: It’s true that by the end of the year we will have a number of record sales. Well-priced properties are going very rapidly. We do have multiple bids, in some cases five to ten people bidding on the same house, so there is competition for good properties. As a result, the bargaining process has become much more efficient. Well-priced homes and realistic offers have become the rule.

How is “well-priced” measured today as compared to pre-COVID-19, when comparables determined market value?

ER: We have a very sophisticated group of buyers who know value. There have been sight unseen sales, but they are very rare. We have done quite a number of sight unseen rentals, but they are typically short-term and don’t require as great of an investment. But it is true that price points have increased. There is very little inventory in under a million.

In recent years, the Hamptons has experienced shorter term rentals as opposed to May through Labor Day rentals that were typical of the market. Has that changed?

ER: Yes. We saw tenants taking rentals in April and extending seven, eight months, but we believe that is unique to COVID and may not continue into 2021. We have also seen an increase in year-round rentals. But yes, our rentals are up 75 percent over last year.

Any last thoughts you would like to share?

ER: I have to say that I have been very impressed and encouraged by the cooperation of all parties in the process during this time of great suffering. It is the one good thing to come out of COVID-19.

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