The Post-COVID world has and will continue to make substantial changes in how real estate brokers in New York operate. While real estate brokerage has been deemed an essential business, that does not mean “business as usual”.
Brokers and realtors are required to abide by guidance provided by the New York Department of Health.
This means that video conferencing will still be the primary means of communication with clients and that in-person interaction, when necessary, must be done keeping in place social distancing and anti-pandemic measures regarding the touching of any surfaces during home showings or inspections.
Similar to most industries, brokers will have to ensure clients that they are working in a way that provides maximum protection from infection. This will be both a marketing imperative as well as a legal requirement. Brokers would do well to use technology to enhance the ability to show properties remotely with greater detail and specificity.
Brokers should also, in their listing agreements and other disclosure documents, provide for their release from any claims of COVID related injuries. Contracts should also contain a clause regarding the ability of a buyer or tenant to terminate a transaction because of a COVID related event. Particularly, in commercial leasing, there will have to be clauses as to the effect of future pandemics or the like on a tenant’s ability to terminate the lease.
There has been a gradual movement through the introduction of technology to allow for a broker to have a greater reach to introduce and show properties more efficiently. In the Post-COVID world, this trend will continue. The good news with brokers is that they will be able to operate more efficiently. The bad news for brokers is that it will inevitably lead to a continuation of downward pressure on commission rates.
In the real estate brokerage industry, in particularly New York, there will be winners and losers. The winners will be those who embrace technology and changes to the way business will be done and the losers will be those unable or unwilling to adapt.
* This article was written by Howard M. Rubin, senior partner, Goetz Fitzpatrick LLP