Long before the coronavirus outbreak, closing on a house was a transaction so legally and financially complex that it required the carefully choreographed work of a half-dozen specialists. Even minor disruptions of the ancient system of property purchasing have important ramifications.
“It’s a dance,’’ explained Sara Rosenfeld, a veteran sales associate at Coldwell Banker Residential Brokerage-Cambridge with 38 years’ experience in metro Boston. “Everybody has to be on the same dance floor and working for the same thing.’’
House hunting during the pandemic has become a danse macabre — as real estate professionals struggle with new steps and rhythms.
“It’s like all of a sudden someone’s changed a lock ... and I have to go to get a key,’’ Rosenfeld said.
As of March 30, it was difficult but not impossible to close on a home.
Rosenfeld had two closings scheduled for the week of March 30, but otherwise faced a lean schedule. Early spring normally marks the beginning of her busiest season. Instead, she said, “we’re on ground zero right now. I’ve never had this time period ever in my career.’’
Governor Charlie Baker’s directives currently deem real estate an “essential service.’’ On March 23, Coldwell Banker’s parent company, Realogy Brokerage Group, prohibited all open houses and in-person showings.
“Closings are still permitted, until further notice,’’ Realogy Brokerage Group stated in an e-mail shared with the Globe. “In the event that a physical closing is required, attorney’s [sic] may still use our offices as long as they follow social distancing guidelines. Agents are not allowed to attend closings.’’
Pandemic purchases are definitely different. New COVID-19 addenda are added to contracts. No more celebratory handshakes, no side-by-side document reviews.
“The visuals of conducting a closing have completely transformed,’’ explained Susan Goldstein, a partner at Pressman & Kruskal of Cambridge, whose primary practice is residential real estate.
“I’ve been practicing law for over 25 years, and this is uncharted territory for me,’’ Goldstein said. “Most of real estate is regulated by law, so we have very little flexibility.’’
Nevertheless, she explained that the real estate bar, title companies, and others have “been trying to work within this ever-changing environment.’’
For mortgage lenders, interest rates are behaving erratically. A rate issued at 10 a.m. once applied all day. Rates now “change five, six, seven times in a day,’’ according to Chris Butts, vice president and sales manager at Leader Bank. He called this fluctuation “unbelievable.’’
“It’s very hard for us to do our jobs,’’ Butts said. “If someone says ‘lock,’ you’ve got to lock it that second. It’s very, very stressful.’’
Even experienced home buyers may not realize how dependent real estate is on the free movement of certain workers, or how many players it engages.
A closing involves buyers and sellers, of course, but also realtors, lenders, lawyers, title researchers, title companies, city or town hall employees (for final water bills and municipal lien certificates), fire prevention offices (for smoke alarm and carbon monoxide inspections), appraisers, insurance companies, and the government employees at the county registry of deeds.
In a branch of government that dates to the 18th century, the state’s 21 registries of deeds remain essential to closing a modern real estate transaction.
Southern Essex Register of Deeds John O’Brien refers to his offices as “the last bastion for real estate.’’
“It’s an arm of government many people don’t know about,’’ acknowledged Bill O’Donnell, register of deeds for Norfolk County. “But of course if you’re refinancing … or selling your house or buying your house, it becomes personal.’’
Before the crisis, registries had been adapting to an increasingly digital world.
For years, many registries have had electronic document filing rates higher than 50 percent. However, certain types of filings — and certain county registries — still require paper. Legal policies and digital capabilities vary county by county, and sometimes even within different departments at a single registry.
The state’s registries are closed to the public, but filings continue electronically and by mail and drop-off. With regulations changing daily, county registry websites should be consulted for up-to-date information.
“A lot of the disaster recovery plans that we put in place were put in if something happened to the building,’’ O’Donnell said. “If there’s a flood. If there was a fire. But a pandemic, that’s — that’s huge.’’
The crisis may present an opportunity to reform an antiquated system whose idiosyncrasies are now being laid bare, argued O’Brien.
“Out of bad comes good,’’ he said. “I’m hoping that down the road we will be able to say: ‘Look at what we did. We changed all these nonsense laws and brought everything up to date.’’’
The registries of deeds not only perform vital work for the real estate sector, but also represent an important source of revenue for the Commonwealth. Statewide statistics were not available from the Office of the Secretary of the Commonwealth, but data for 13 of 21 registries show revenue of $166.9 million in 2019.
O’Donnell, whose county of Norfolk alone contributed $56 million to state coffers in 2019, warns that if real estate business “kind of grinds to a halt, there is going to be a tremendously negative ripple effect.’’
As shutdowns and restrictions increase, metrics collected by ShowingTime — an online service used by almost a million real estate professionals — provide a partial glimpse into the pandemic’s early impact. As of March 29, North American showings scheduled via ShowingTime were down 58.8 percent compared with the same time last year. In New York, the national coronavirus epicenter, showing traffic has dropped by 98 percent.
“Everybody who works on commission … there’s a certain group of us who are not in this position to sustain a huge amount of loss over a long period of time,’’ Rosenfeld noted.
“Real estate is stressful to begin with,’’ she said. “[But] it drives the local economy … The furniture stores. The appliance stores. Everything. The contractors. Everybody. It’s going to be a domino effect into many industries.’’
The pandemic has plumbed new depths of home-purchasing purgatory. In real estate limbo, the movers never come.