If you are intent on buying a home during the pandemic, obtaining an appraisal shouldn’t stand in your way. But procuring a home inspection may be another question.
In New York, California and other states, real estate agents, appraisers and home inspectors are considered “essential employees.” But others aren’t so lenient. Pennsylvania, for example, has prohibited in-person appraisals, inspections and even final walk-throughs.
Even where these necessary tasks are allowed, though, professionals must follow statewide health mandates and adhere to local rules, which may be more restrictive.
To do their jobs, appraisers are using technology to value properties instead of taking a firsthand look around. But independent inspectors can’t do that. They have to crawl over, under and inside your house to create their reports, and they have to do so in person. There’s nothing yet that would allow them to do otherwise.
Tech Helps Some Continue
To keep home sales afloat as people deal with social distancing, federal regulators have loosened the rules considerably. Under the new, but temporary, criteria, exterior-only appraisals or valuations powered by artificial intelligence – a.k.a. “desktop” appraisals – are permissible for most purchase mortgages. That way, appraisers need not go inside.
And now, three federal regulators have said that for the next year, banks do not need an appraisal until up to 120 days after the loans have closed. But that applies only to institutions they regulate, and only those loans they keep in their portfolios, as opposed to selling them to investors. There’s no word yet on whether other lending overseers will follow suit.
The authorities have encouraged lenders to accept truncated appraisals, but some, worried about potential repercussions, have balked. So, appraisers are turning to sellers for help, asking them to photograph their home’s interiors and upload the pictures so they can obtain as close a look as possible until the pandemic ends.
Toward that end, several companies have come out with software to improve the process. With one from Bradford Technologies, the appraiser shares a unique link with the seller, who uses it to submit geo-coded photos of the home’s interior. The seller is led through a series of questions, such as, “Have any upgrades been made to the kitchen or baths?” and “How old is the roof?”
Founder Jeff Bradford said he knows of some appraisers who are still performing interior inspections, even though “it’s a dangerous time to do so.” If they are carrying the coronavirus, even if they’re asymptomatic, they are “like bees pollinating an orchard” as they go from house to house, he said.
Inspectors See Big Drop in Demand
Home inspectors don’t have the luxury of working from home, but some are soldiering on. With fewer sales being recorded, you’d think they’d be readily available to take on assignments. But that’s not always the case.
Bill Walker, a third-generation home inspector in the Washington, D.C., area, said two of his inspectors won’t come to work, and he and his other inspector will only examine totally vacant houses.
Walker normally probes five or six houses a week; now he’s lucky to do three. And he’s requiring sellers to sign hold-harmless agreements “so they can’t blame us if they get the virus.”
“Normally, this is at a time of year when our phones are ringing off the hook. By Sunday night, you’d book the entire week,” he said. “But now, calls are way down, more than 50 percent off. We could do more inspections, but the virus is now part of the equation.”
Meanwhile, the big home-inspection chains like Pillar to Post and HouseMasters are requiring their franchisees to follow all CDC guidelines: Practice safe distancing, wash hands, wear masks and gloves and sanitize all surfaces. But even at that, said HouseMaster’s Kathleen Kuhn, some sellers won’t allow anyone inside.
HouseMasters inspectors now sometimes ask owners to leave the house while they perform their exams. And if they can’t be gone for the three or four hours an inspection typically takes, they are asked to isolate themselves in one part of the house and stay away from the inspector. In some instances, examiners just look at exteriors.
“At least clients are getting some information,” said Kuhn.
Kuhn said some of her franchisees, especially those who are older or have underlying illnesses, have shut down until the pandemic subsides.
“We’ve seen other significant declines in our 40 years,” she said. “But never anything like this. It’s pretty bad.”
Lew Sichelman has been covering real estate for more than 50 years. He is a regular contributor to numerous shelter magazines and housing and housing-finance industry publications. Readers can contact him at firstname.lastname@example.org.