How COVID-19 Affects Real Estate


We are in uncharted territory – that much is clear. After a Shelter-in-Place order was announced by SLO County on March 18th and a subsequent statewide order was announced on March 19th, the real estate community has been left to decipher whether or not sales activity are deemed “essential”. The California Association of Realtors® (C.A.R) provided guidance on March 20th providing the following statement:

“The real estate industry is not exempt from this prohibition except as needed to maintain “continuity of operation … of … construction, including housing construction.” Therefore, Realtors® should cease doing all face-to-face marketing or sales activities, including showings, listing appointments, open houses and property inspections. Clients and other consumers are also subject to these orders and should not be visiting properties or conducting other business in person. 

Property management and repair work, which generally involves maintaining sanitary and safety conditions is permissible. Additionally, many other aspects of the real estate industry can continue to occur without in-person contact, including documentation and signing, and in many circumstances, closings. Other activities may also be managed remotely, though there may be some difficulties.”

So what does this mean for real estate sales at this time? Here’s a quick Q&A:

Q: Are properties in escrow still moving forward?

A: While there has been an increase in the number of canceled escrows and buyers seeking price reductions, in general, active escrows are progressing. Most home inspectors, appraisers and escrow offices are still working although taking additional precautions. 

Q: Are properties still being shown?

A: Open houses, broker caravans and most showings have been moved to the virtual landscape, without the need for person to person contact. Following the letter of the law, there should not be any physical showings at this time. There are undoubtedly some Realtors and consumers who are not heeding the orders mentioned above. 

Q: What precautions are being taken when showing a home?

A: Prior to the statewide shelter-at-home order, we at CCRE developed showing protocol to help minimize risk to buyers, sellers and ourselves, including but not limited to basics such as:

  • Any person coming onto the property must be at least 18 years of age.
  • All persons entering the property must wear single-use protective gloves OR disinfect their hands prior to entering the home. 
  • No more than 4 adults may enter the property at any given time.
  • Prospective buyers must provide a signed statement that they have no signs of a cold, flu or other respiratory illness, have not been around or exposed to ill persons within the prior 14 days, and have not recently traveled abroad.
  • Buyers over the age of 65 or who have pre-existing health conditions are not recommended to physically view the property and do so at their own risk. 
  • Sellers are recommended to disinfect their home after showings, especially commonly touched areas like doorknobs.

Q: Can tenant-occupied property be shown?

A: We understand that some buyers and sellers still want to see homes despite the shelter-at-home order and in specific cases, if both parties understand and are OK with the risks involved, showings can often be accommodated. That being said, we have made the decision to cease all showings of tenant-occupied properties until further notice. First, the statewide order does not include real estate sales as “essential”. Second, from a risk management perspective, the liability is too great when a 3rd party (the tenant) is involved. If a tenant becomes ill, that tenant could seek legal remedy against both the seller and listing broker for bringing unknown parties into their residence, despite any precautions being taken. While it would be difficult to pinpoint how and when a tenant was infected, as Realtors, we have a fiduciary responsibility to protect the seller and morally, we have a duty to the tenant to heed precautions from medical professionals. Given this information, we advise sellers of tenant-occupied property to hold tight for the time being.

Q: Aren’t there still ways to market or sell a property despite our current environment?

A: Yes. We have put more emphasis on video tours of each listing so a potential buyer has a better understanding of the layout and condition of a property without physically entering. Moving forward, we are also obtaining a broader range of pre-listing inspection reports and disclosures so a buyer has all known information upfront, including a home inspection, pest inspection, sewer lateral video (for SLO City sales) and seller questionnaires. The goal is and will be to weed out buyers who aren’t serious and  to minimize the number of people who need to enter the property. 

Q: Is there a likelihood that real estate activity will be included as an “essential service”?

A: C.A.R. believes Realtors® provide essential services to their communities, and our statewide Association is working aggressively with the Governor’s office to broaden the categorization of essential workers to include real estate agents.

Q: How will this affect real estate moving forward?

A: It is too early to know. The amount of volatility in the stock market, mortgage rates fluctuations and decreased consumer confidence during the last two weeks is a game-changer. Some lenders are still working through a pipeline full of refinances, some buyers are hoping to take advantage of very low interest rates, inventory of available homes is still very low and we will continue to see new legislation being proposed and enacted that could change all of this. Until we see a decrease in the number of confirmed COVID cases, real progress on a vaccine and stability in financial markets / employment, we believe this will be a “wait and see” approach. 

Have more questions? Feel free to call us and chat about your specific situation. Contact Graham ([email protected], 805-459-1865) or Steve ([email protected], 805-458-5506).

*This is not legal advice. Please consult your law professional with any legal oriented questions.

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