How to Navigate Closing During These Unusual Times
Image by Nattanan Kanchanaprat from Pixabay
You have a ratified contract, now what do you do to safely navigate the closing process as a seller? More than likely, the buyer has opted for a home inspection and an appraisal, which will require inspectors, appraisers, and possibly licensed contractors to come to your home. Your REALTOR® usually will work with the buyers' and their agent to set these up with you, but you still want to maintain the safety of your home during this process.
Due to the restrictions in place during the COVID-19 pandemic, getting the required inspections and appraisals completed may require longer time. Your REALTOR® may ask you to sign a COVID-19 addendum stating you will extend the inspection period over the time stipulated in the signed contract. In addition, due to the lower interest rates and the new government stimulus package, the banks are extremely busy. Even though in our area the banks are prioritizing new home loans, the process could take longer than the time set up in the contract. Therefore, your REALTOR® may ask you to sign an additional addendum agreeing to extend the finance period for the buyers to secure a loan. The Virginia Association of Realtors describes the form used as "protecting both parties by essentially pressing “pause” on the transaction for a period of time while things get figured out". The time of the "pause" is agreed upon by the buyer and the seller.
After the inspections, appraisals, and negotiated repairs are completed, you will then move to settlement and signing the final closing documents, thus changing ownership from the seller to the buyer. Under normal circumstances, the buyer chooses the settlement company, a time is set up to sign the documents, and the deed is then recorded at the courthouse. Some settlement companies have established different methods of closing to abide by federal and state mandated COVID-19 restrictions. These alternative closings can include remote online notarization, drive up signings where the closing attorney comes to your vehicle, or a face to face closing where social distancing, people limits, and minimal contact is implemented. It is important to discuss any delays or concerns with your REALTOR® as soon as possible.
Another unforeseen situation that may arise is if the seller themselves become sick and are unable to give possession to the buyer at closing. A post settlement occupancy agreement can be agreed upon by both seller and buyer, making it important to discuss with your REALTOR® as soon as possible if this situation were to arise. As of right now, it is unclear on how the courts would rule if the the seller was hospitalized and unable to meet the contractual deadlines. By implementing a post settlement occupancy agreement, you can protect you legal obligation as a seller as well as being able to focus on getting well.
Navigating through the closing process at this time is a new experience but with the proper communication it can still be a rewarding and safe transaction.