Real Estate Closings In Pandemic Trim Nonessential Parties, Emotion in the Process

As the COVID-19 pandemic rapidly ushered in a new normal in March, real estate closings on the East End didn’t skip a beat. The process evolved as demand for Hamptons homes began to soar.

And while a redesigned closing process has enabled the legal transaction — albeit, through some unusual ways — the emotional transaction inherent to handing over the keys to a lived-in home to its next owner has been stripped from the process, agents say.

Traditionally, a closing brought together real estate agents, attorneys, title agents, and the buyer and seller. But with the emphasis on limited interactions, only those absolutely necessary to the transaction are present — and often this doesn’t even include the buyer or seller.

“You were packing the room and, in retrospect, some of that was probably more a function of tradition than practicality,” said Christopher Covert, an associate broker with Compass. “The superfluous parties are no longer needed … nor wanted in the room.”

Mr. Covert noted that the presence of real estate agents at closings held more root in tradition –– the agents have little role at that point in the closing process.

But for buyers and sellers, power-of-attorney agreements have allowed the room to become even smaller. Mr. Covert said that although the practice of signing such agreements is long standing, the pandemic has augmented their importance and usage.

Adam Miller, who runs a Bridgehampton real estate law firm, relied on power-of-attorney to complete closings long before the pandemic — around 60 percent of closings he has aided used the agreements. But with COVID-19, they have become essential.

On the East End, such agreements have held particular importance as clients tend to close deals from more distant places, while traveling, working or living someplace far, said Steven Bodziner, a vice president and manager at Bridge Abstract, a title agency in Bridgehampton. “You have people from all over the country buying houses, and that’s not unusual,” he said.

Though in-person real estate showings were allowed to resume on Long Island beginning June 10, when the region entered phase two of reopening, closings have remained mostly virtual or socially distant.

Mr. Covert heard a story of a closing being conducted in the parking lot behind Sag Harbor Cinema: “Everybody stayed in their cars in a circle, and the title closer, who had a mask, a shield and gloves — basically all PPE — just went back and forth between the cars passing the document.”

In similar fashion, Mr. Miller detailed the dances his staff had to learn to make closings function in the pandemic: “My paralegals have done things where documents are left on the back of someone’s car that someone would go sign them then sterilize a pen, and then we pick up the documents from the car.”

On Sunday, Mr. Bodziner separated attorneys and buyers in different rooms at his office to facilitate an in-person closing, he said.

For Peter M. McCracken, an associate broker at Corcoran’s Shelter Island office, there is some discomfort associated with closing a deal from afar: Buyers may be purchasing a home that they never visited.

“There is a little bit of a risk from a buyer’s point of view,” he said, adding that a buyer’s risk increases with homes that are not newly constructed. Old homes do not come with builder’s and manufacturer’s warranties the way new homes do.

And in Mr. McCracken’s experiences over the past five months, closings have been almost entirely virtual.

“Nobody goes to closings anymore,” he said. “Everything is pre-signed: One lawyer gets everything signed by their client, the other gets signed by their client, and then they just swap everything and send it around, and it gets all signed.”

For agents, Mr. McCracken expressed that having the option to close remotely makes their jobs significantly easier. Corcoran also introduced DocuSign for all its agents to use on nonlegal documents. “It’s quite easy,” he said.

Legal documents, Mr. McCracken said, are often overnighted through the U.S. Postal Service or FedEx.

But as the process has transitioned away from handshakes and face-to-face meetings with everybody at the same table toward sanitized pens and PPE, some worry that the emotion in buying a home has been stripped from the transaction.

“It’s more efficient, for sure,” Mr. Covert said. However, he noted that “there’s an emotionality that goes into a closing.” He recounted stories of buyers wanting to be present for the purchase of their first home. He’s witnessed sellers share their cherished memories of raising their children in the house with buyers who are new parents, he said.

Mr. Bodziner — he said he has performed few virtual closings — noted an increased sense of urgency among many buying homes now. He recently helped someone in her eighth month of pregnancy close on an East End home; she wanted to escape to the airiest parts of Long Island.

“The thing that’s driving the market this year is the urgency to be out of the city and even the more densely populated suburbs like Nassau and Westchester,” Mr. Bodziner said. “Everyone wants their backyard.”

At his title agency, he has experienced closings happen in record time — a recent transaction turned from bidding war to signed contract in just 5 days, he said — and amid record demand: He predicted that if schools remain closed, the South Fork’s population will remain swelled from summer.

“In 2020,” Mr. Bodziner said, “every closing is a story.”