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The New Normal For Buying A Home

Terry Story, New Normal

With Terry Story, a 31-year veteran with Keller Williams located in Boca Raton, FL

During this week’s Real Estate Roundup, Steve spoke with Terry Story, a 31-year veteran at Keller Williams in Boca Raton, about what the process of buying and closing on a home sale looks like in the coronavirus environment.

How Home Buying

All right, so we start with a listed property. Terry explains, “I would have already made videos of the home and taken my buyers on a virtual tour. Then, if they’re seriously interested, I arrange for them to do an actual real-world tour of the property, complete with mask, gloves, and even protective booties for their feet.”

Neither the buyer’s agent nor the seller or their agent can be inside the property when the buyer is doing an in-person tour. Social distancing, right? This is far different from the way it’s traditionally done, and it requires some trust. Terry noted that “We’re letting strangers into someone’s home, unsupervised, and the buyer and seller are being exposed to each other—possibly being exposed to the virus.” Terry pointed out that the positive thing about all of this is that the seller can pretty well safely assume that the buyer is a very serious, motivated buyer. Otherwise, they wouldn’t be willing to go through all these obstacles—the mask, the gloves, etc.

Terry continued explaining the procedure. “Let’s assume the seller’s agent knows the buyer by now and that the buyer has been qualified—really qualified, not just a pre-qualify. We’re talking about having proof of funds. That means that if the buyer is paying cash, then they’ve got the money in their bank account right now. If they’re financing buying the home, then they’ve been approved for the financing. It’s solid. They have a mortgage loan that’s been approved. The seller’s agent is going to, like, hold the buyer’s driver’s license while the buyer goes into the home, by themselves, for their do-it-yourself tour of the home.”

Steve added that getting that mortgage loan approval is noticeably more difficult than it was before the coronavirus hit. For example, because people’s employment situations are more uncertain, the bank is going to check on their income and employment situation not just when they apply for the loan but all the way up to right before closing, right before everybody signs everything and the bank hands over that big check.

Mortgage lenders are really just doing their due diligence. It’s just that things have changed, and the reality is that the buyer might have had a job when he first applied for financing, but he might have been laid off before we got to the closing. The lender is going to look at more than just the buyer’s assets or salary; they’re going to dig deeper and find out, for instance, if the buyer is considered to be an essential worker.

Terry summed things up by saying that the bottom line is this: it’s an agent’s job to act as a transaction broker. She said, “It’s my job as a listing agent to make sure that I’m bringing people to meet with the seller who is qualified and highly motivated to buy, especially right now.”

Getting To The Closing

Steve asked Terry to continue describing the step-by-step process of closing the sale. Once a qualified and motivated buyer is brought together with an eager seller, the next step is to come to an agreement on price. At that point, the process pretty much continues like it always has. As Terry explained, “It’s time for an inspection period. But one change is that inspection periods aren’t taking as long as they used to. They’re now typically a week or less, instead of ten days because inspectors just aren’t as busy these days.”

The lending process, from the agent’s point of view, is still basically the same, “Except,” Terry said, “that we’re checking on it every few days, calling the lender to make sure the money will be lent in a timely fashion. That could be a potential area of concern when you consider the strain that the coronavirus pandemic is putting on everyone.”

Terry explained that, in general, the name of the game is really just staying on top of everything, staying in touch with each party involved in the process to be sure that everyone is still on board. “We need to make sure that everyone still wants to be in on the deal, that everyone is still motivated and working toward the same goal of getting to the closing table. Frankly, we’re communicating more than we ever have before with the other realtor, just to make sure that we’re all still on the same page and that everything’s getting done properly.”

Sealing The Deal

Staying on top of each stage of the process is critical in preventing the sale of the home from falling through. As the process moves along, the final stage is the closing itself. This is another part of the process that’s changed as a result of the coronavirus.

Terry informed listeners that, “Closings can basically be done remotely now. Certain lenders have approval to close on a home completely remotely. The biggest issue is that some documents have to be notarized. But as we deal with more closings in this way, we’re learning how to get things done as smoothly as possible. The title companies are moving toward going completely digital, but if need be, someone from the title company will go out to the buyer to have documents signed. Agents are becoming couriers, doing whatever it takes to get all the necessary documents signed. We’re doing whatever it takes to get the job done and close on the home.”

Typically, the agent gets the seller to sign all the documents first, and then they get the documents to the buyer. Some lenders are sending a lot of the documents to the buyers in advance so that at the closing table there are fewer documents to sign. Once payment clears, the agent might have to be a courier once again to make sure the keys to the home get to the buyer.

If you’d like to learn more about buying or selling a home, visit Keller Williams.

Disclosure: The opinions expressed are those of the interviewee and not necessarily of the radio show. Interviewee is not a representative of the radio show. Investing involves risk and investors should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions. Content provided is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered tax, legal, investment advice. Please contact your tax, legal, financial professional with questions about your specific needs and circumstances. The information contained herein was obtained from sources believed to be reliable, however their accuracy and completeness cannot be guaranteed. All data are driven from publicly available information and has not been independently verified by the radio show.

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Steve Pomeranz: I’m here with Terry Story, a 31 year veteran with Keller Williams and we’re going to talk about buying and selling real estate in the new norm, the new pandemic norm. Welcome back to the show, Terry.

Terry Story:Thanks for having me, Steve.

Steve Pomeranz: I especially want to take us through the process of closing on a home so we can kind of get an image in our mind’s eye of what it’s going to look like. So what is the first thing that happens?

Terry Story: Sure. Well, assuming that the property is already listed and we’re talking about the buyer side of things. So at this point I would have already made videos of the home, virtual tours, professional photography. We have the buyer view all of those items first and if they like the home enough and want to proceed to the next level, then we will bring them to the house, wearing protective gear, masks, gloves, booties if required.

And the way it works, Steve, is we’re not allowed to be on premise with them. So we would open up the door and let them in and we stay off site, we’re not allowed to be with them, nor can the seller be with them nor their other agent.

Steve Pomeranz: All right, so you have strangers going into someone’s house. How are you pre-qualifying these people?

Terry Story: Sure. So before we let a stranger into somebody’s house, first of all, we’re assuming at this point the other agent knows them. He has copies of their driver’s license and that they are qualified. The most important part in all of this is we want, if they’re paying cash, that we have proof of funds that they actually have the money in the bank as of today. And that if they’re getting finance, that they are truly already approved for their finance. In other words, they’re not a pre-qual approval, but something that’s more in depth.

You got to remember, we’re bringing strangers into people’s homes and we’re exposing them to people going into their house and we want to minimize that as much as possible. So, quite frankly, the only people really out looking at property are your serious, most motivated buyers because why would you be doing this right now unless you needed a house?

Steve Pomeranz: Yeah. The other aspect of this is that qualifying these days is a little tougher.

Terry Story: That’s right.

Steve Pomeranz: The banks are looking more deeply, not only into the assets that you have saved or the down payment, but they’re looking at your job and the ability for your job to stay in place.

Terry Story: That’s right. And so we’re going to ask more candid questions to make sure that we feel that your job isn’t in jeopardy and we do the best that we can. We can only qualify as far and deep as we can. But so far everything, knock on wood, has been going through for us.

Steve Pomeranz: Now, would you say that if you’re selling your home and the buying agent or the buyers come to your property and they haven’t been pre-qualified or the agent’s not doing this kind of work, should you look a little bit askance at that?

Terry Story: Yes, I think so. As the listing agent, my obligation is to, well we work as transaction brokers to make sure that we’re being fair to everyone and that we’re only bringing ready, willing, and able buyers through a seller’s property, especially right now.

Steve Pomeranz: Right now. So after all of that has happened and an offer is made, a price is agreed upon, what are the next steps?

Terry Story: So the next steps, once it’s agreed upon, and we know that they’re qualified, it’s business as usual. They go onto their inspection period. We’re doing them in a shorter period of time. We don’t need 10 days. We’re doing them in seven days because the inspectors aren’t that busy. You can get somebody out there the next day. So we don’t need 10 days, 15 days for an inspection period. So we’re doing those quicker.

Steve Pomeranz: Well, that’s good news.

Terry Story: Yeah, the lending process is still the same except we’re monitoring it every few days. We’re calling the lender to make sure that everything’s being done still in a timely fashion. The seller, the buyer’s cooperating, getting everything over to them as needed and just staying on top of it.

And then quite frankly, we’re communicating more so than we ever have with the other realtor to make sure that their buyer’s still in on it, that they’re still motivated, that everybody is working towards the same goal of getting to the closing table.

Steve Pomeranz: Well, generally you know what obstacles mortgage wise are coming your way. So you’re trying to get those questions answered quickly and upfront more than ever before.

Terry Story: That’s correct.

Steve Pomeranz: Okay. Also, every mortgage broker and bank in town now knows your name. Is that it?

Terry Story: Pretty much, by now they should. So we’re going through that aggressively and it makes a difference who you use for finance. I just had multiple offers and we went with the person that was most qualified who was already approved for their finance. And oh by the way, I happen to know who that mortgage broker was and so when I called him on a Sunday night, (a) he answered the phone and (b) already had the right answers that I was looking for.

So if you’re a buyer, make sure you’re dealing with a very reputable mortgage lender.

Steve Pomeranz: Okay. Now what about the closing itself? I don’t think that there is a table that everyone’s going to sit at. So how has that changed?

Terry Story: Right, so it can be done remotely. Certain lenders have the approval to do closings remotely. The issue is you need documents notarized, but there are ways of doing that and they have relationships with certain lenders. So that’s a new trend for us here. So we’re starting to do that.

Terry Story: The title companies, if need be, will go out to the buyer to have documents signed. Agents are becoming couriers, whatever it takes to get the documents signed. What we’re not seeing though is a coming together altogether at a title company. Buyers and sellers and realtors all sitting around as documents are signed.

Steve Pomeranz: Those days are over for a while.

Terry Story: Those days are over, perhaps forever.

Steve Pomeranz: But the title industry really hasn’t moved totally towards digital either.

Terry Story: They’re working towards it. There’s a lot of legalities that they’re going through. I know that one title company we work with has a relationship with a certain number of lenders and they are now able to go totally digital.

Terry Story: Some lenders are sending the documents in advance to the buyers to sign, a large portion of the documents, so that at the closing table there are less documents to actually sign. So that’s a nice thing too.

Steve Pomeranz:  Okay, so once the deal is closed, how does someone pick up the keys? What’s the process there? Something so simple but yet you wonder.

Terry Story: Sure, sure. So typically the seller signs the documents first, then the buyer signs the documents and the buyer does not get the keys until the funds have been wired and cleared, which is all usually done the same day.

So the keys, the way that I personally handle it, is all the keys are left in the house with the clickers except one key. One key I hold back and as soon as the transaction is totally closed and funded, we will make arrangements to get that key to the buyer.

Steve Pomeranz: My guest is Terry Story, a 31 year veteran with Keller Williams, and she is a weekly participant on the Steve Pomeranz Show, which is a clip from what you’re listening right now.

The show can be listened to online at stevepomeranz.com, or it also airs on WLRN NPR station for South Florida. And again, once again, Terry Story. Thank you so much for joining me.

Terry Story: Thanks for having me, Steve.

Terry Story is a weekly The Steve Pomeranz Show guest with her Real Estate Round-up and Survival Guide, sharing with you her insights as a 30-year Veteran Real Estate Agent.