COVID-19 Home Closing Outlook – Week of March 23rd, 2020
By Michael H. Wasserman
Need some not-so bad news? Real estate closings will
continue for the foreseeable future. Governor Pritzker's shelter-in-place order designates lenders, title companies, and lawyers all “essential.” This
means my firm and I remain available and at the ready assist with real estate
purchases and sales.
We are working closely with title companies and colleagues
to implement and execute safety protocols so that we can all minimize contact
among the many, many hands that touch each transaction. The title industry has
been quick to urge reducing number of people in their facilities, disinfecting
offices, providing hand sanitizer, fresh pens and encouraging as much remote
work as possible. We support and appreciate their efforts (and provide our own
pens to clients too).
Do you have a closing coming up? Here are our latest guidelines:
1. No friends,
family or guests. If you do not absolutely have to attend a closing, please do
not. Real estate agents, loan officers, friends and family, normally welcome
guests at a closing table are kindly asked not to.
2. Sellers need
not attend. Sellers can pre-sign all closing documents to avoid in person
attendance. Our firm has always offered clients this service. We make sure that
all paperwork is ready in advance and that all proceeds of sale are delivered
promptly upon consummation of the closing.
3. Sellers’
attorneys do not need to attend either. Sellers’ attorneys can deliver
documents to the title company before the closings using overnight delivery
service, or by curbside drop off. Historically, we have prided ourselves in
personal attendance at our seller closings, but for the time being we will
refrain where-ever possible
4. Buyers should avoid closings too, using powers of attorney instead. Buyers are encouraged to give their real estate lawyers power of attorney to sign loan/closing documents in their stead and so that they do not have to attend in person. Our office will help coordinate powers-of-attorney with your lenders. This is a service we regularly provide.
4. Buyers should avoid closings too, using powers of attorney instead. Buyers are encouraged to give their real estate lawyers power of attorney to sign loan/closing documents in their stead and so that they do not have to attend in person. Our office will help coordinate powers-of-attorney with your lenders. This is a service we regularly provide.
5. Title companies are closing some local offices. Not all branch locations are going to be available. Some are closing due to local ordinances. Others by orders of building management. We may not be able to close at the title office closest to the property (or the parties).
SELLERS, here are some issues we anticipate for you:
- Notarization needs to be done in person. Illinois transactions require original “ink-signed” deeds. That document must be notarized. (Please see our 3/27/2020 update on remote notarization!)
- Notarization still require in-person signing before a notary.
- Remote online notarization is an emerging technology but is not yet valid in Illinois. Pending State and Federal legislation may change that, but for now, this is not an option.
- Docu-sign and other online secured signatures are the same and (sorry) not good enough.
- Mobile notary services exist, but it is unclear whether they are considered “essential” services and will travel to client locations at this time.
- Important: not all notaries will witness deeds—even in normal circumstances. (They are wrong to refuse, but that is a rant for another day). Sellers should confirm that their notary provides this service before they leave the house.
- Please contact us if you need help working through any of these issues
- Municipal requirements might be difficult to complete. Many municipalities require payment of final water bills and/or transfer taxes. Others require zoning certifications or building department inspections. As local governments shut or limit operations, it may not be possible to comply with these requirements. Alternatively, delivery of these services may be slowed considerably, and closing dates may be compromised.
BUYERS can anticipate some issues as well:
- Final walk-throughs may be difficult. Buyers are entitled to a final, pre-closing walk-through of the home they are buying to ensure the property is conveyed in an undamaged condition.
- There do not seem to be exceptions in the shelter-in-place Executive Order to permit final walk-throughs.
- Buyers may also be concerned about unknown contaminations inside the property being conveyed.
- Sellers may also be concerned about the health status of people entering homes for a walk-through.
- Realtors may need to conduct these appointments for their clients–and may take on risk of dis-pleasure or liability for failing to appreciate deficiencies that should have been spotted.
- Not all Buyers will be comfortable providing power of attorney.
- Attorneys for buyers who need or strongly wish to attend closings in person have been asked to use telephone or video conferencing to counsel clients from a distance. Our firm works remotely on a regular basis. We have an arsenal of tools we use to do so, including conferencing services but, it will expect challenges here too. Not all law firms or lenders or title companies have comparable (or compatible) tools and/or technical competency.
- For now, we recommend using powers of attorney wherever possible.
- We can and will guide clients through the closing process with easy-to-use remote conferencing technology.
- We can, where necessary, attend purchase closings in person with clients who desire that we do so.
- Some buyers may face furlough, loss of income, unemployment or illness. Ill-timed job losses and job furloughs may cause some mortgage lenders to withdraw or revoke loan approvals on the eve of closing. Some buyers’ closings may need to be delayed. Some defaults will be inevitable.
Stay healthy. Stay safe.
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