Many Chicago buyers and sellers manage to close on a home amid the pandemic, but others have not been so lucky. For Cameron Leavitt, a construction manager who was in the middle of buying a unit in a newly constructed three-flat in Pilsen with his wife, the process ground to a halt when the lockdown went into effect. The Leavitts were scheduled to close two weeks earlier, but found themselves stuck in limbo after the Cook County Recorder of Deeds temporarily shuttered its office.
“You can e-record some documents with the county like a deed or a mortgage for an existing property, but for new construction they require certain original documents which can not be accepted online,” Leavitt tells Curbed. “We Fed-Exed our paperwork, but they don’t have anyone in the office working right now. Our lender and title company need that stamp from the city before we can close.”
Leavitt says he and his wife had a mortgage lock that expired last week, but the seller is paying for a three-week extension. “We’re hoping we hear back soon. My wife and I are both still working and not really affected by the virus right now, but you never know with the way the economy is headed,” says Cameron, who’s resorted to tweeting at the county in hopes of getting a response. “We want to be able to move forward, and I’m sure there are some other people in the same boat.”
Homebuying—like so many aspects of everyday life—has been completely upended by the novel coronavirus. Still, Illinois real estate businesses continue to operate as an essential service during the outbreak.
One step that’s been especially impacted is the already complex process of closing, which requires close coordination between buyers, sellers, agents, lenders, insurers, attorneys, and county records officials. Closing on a new home is generally a joyous life event, but the process has taken on an extra degree of uncertainty, stress, and anxiety in a world experiencing the COVID-19 pandemic.
For Baird & Warner agent Lisa Byrne, much of her day-to-day business has changed under the coronavirus lockdown: virtual tours are the new norm and setting up in-person services like appraisals and inspections have become tricky. Still, she’s closed four real estate transactions since the shelter-in-place order went into effect and has yet to see a deal fall apart.
“My closings have been successful, but unconventional,” Byrne tells Curbed Chicago. “It’s possible to have a smooth closing transaction if you have the right players. Everyone needs to be proactive at every step to make it work. For example, I had a seller that couldn’t reach anyone at the bank, so I’ve started reaching out to lenders so I’m comfortable knowing that they can get the ball rolling.”
And it’s not just agents that are having to adapt to the changing environment. Everyone that is part of the homebuying process is finding new and innovative ways to soldier on, especially companies and that are part of the closing—the vital final step in purchasing a property.
“I never thought we would have to get so creative,” says Kathy Kwak, vice president of title and escrow operations and counsel for Chicago-based Proper Title LLC, a title insurance firm that’s offering curbside closing services. In-person closings are still taking place at the company’s Chicago-area offices (provided the parties fill out a health-related questionnaire based on CDC guidelines), but the newest option allows people to limit contact by staying in their cars.
“For curbside, we try to pre-arrange as much as possible,” Kwak explains. “The closer brings the loan documents down to each party’s car and a cover page provides instructions and cell numbers so they can communicate. It’s a lot of running around, but it helps with social distancing. We are happy that we are considered essential and not out of a job. Our staff is out there on the front lines risking exposure every day.”
Since the Illinois stay-at-home was issued, real estate attorney Paul Garver at Hawbecker & Garver says that he and his partner have attended closings on a daily basis and the vast majority of transactions are still going through. “I’ve seen a huge amount of effort by attorneys and title companies trying to make this work. You’ve got guys in suits standing out in the rain as clients sign through an open car window.”
For selling property, most of it can be handled remotely, Garver says. But for buying, it’s up to the client and attorney to work something out. “The buyer can give us power of attorney by new remote notarization procedures and can sign all the documents that way—which is something I’ve done for clients, including individuals that are immunocompromised.”
One of the toughest aspects is dealing with the slow or closed offices of municipalities. That’s what threw a wrench into the Leavitts’ closing—though the couple may not be completely out of luck. The Cook County Recorder of Deeds did, for the first time, set up a pair clerks to work remotely and process the backlog of mail-in paperwork, Garver tells Curbed. But it will slowing going and there will be some instances where people could face trouble closing.
“Municipalities are not operating at full capacity so it’s going to take time,” Garver says. “Some towns and villages, like Maywood, require extra inspections, and if that’s not happening you’re not going to be able to close.” The situation at the county level also complicates things from a liability standpoint. If the recorder’s office is shut down, title companies may not be able to guarantee that a property is clear of liens and that the lender will be first in line to be paid should any issues arise.
Byrne says she’s encountered at least one instance of officials dragging their feet and delaying a closing because the county wasn’t ready with its stamps. Hiccups in the process highlight not only vulnerabilities in the real estate business, but pre-pandemic society as a whole. “The lesson here might be that everyone needed to have a better backup system in place,” Byrne adds.
As real estate professionals scramble to get deals done, some are going the extra mile to look out for their clients in this uncertain time. “The lending environment is changing daily, and everyone is worried about what could happen to their clients,” Garver says. “I know a lot of attorneys are pushing for longer extensions on loan contingencies to account for the possibility of their client losing their jobs.”
The new practices adopted out of necessity during the COVID-19 crisis have already begun to reshape how Chicagoans buy and sell real estate, but Byrne says she doesn’t think all of the changes will stick around once the threat posed by the virus recedes.
“Real estate is a relationship-based business, and I hope that we can maintain that element of the process because that’s the way it’s intended to be,” she says. “When a buyer sits down at the table and closes and gets handed the keys, it’s an emotional experience—you feel like throwing confetti and popping champagne. I don’t see that going away.”