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Backlash from Realtors prompts state to reverse policy – twice

For the second time in two days, New York State has reversed its policy toward real estate agents during the shutdown, first saying that agents could once again show houses to clients, and then clarifying that the showings must be virtual, not in person.

Empire State Development Corp., which is implementing Gov. Andrew M. Cuomo's restrictions on business operations, declared the real estate industry as an essential business late on Wednesday, in an abrupt change from the original interpretation a week earlier. That appeared to allow agents and brokerage firms to continue operating during the business shutdown, as long as everyone complies with social distancing rules.

The new guidance indicated that agents could once again show both houses and commercial offices to potential buyers, as showings of both kinds of properties were deemed essential.

But ESD faced a backlash from agents in Western New York and across the state, who did not want to expose themselves, their families or their clients to the spread of Covid-19, and objected to their industry being deemed "essential."

"I’ve been in contact with quite a few people in my industry. I have not spoken with a single agent who is for being deemed essential personnel," said Robert Blake, an agent at Hunt Real Estate Corp., who manages a team of other agents. "It's been a very hot topic. No one that I've come across thinks this is a good idea."

And he said he had no intention of going out.

"This is wrong, this is dangerous," he said. "I just can’t risk it. I have a family to support. I have a team of agents that rely on me."

Petitions were even drafted and circulated, calling for another reversal.

"The overwhelming response that I’ve seen from agents locally, it seems as though a a lot of people are upset about the decision," said Jonathan Carvallo, an agent at Keller Williams Buffalo Northtowns. "They feel that it’s reckless."

So on Thursday afternoon, ESD again changed the guidance, explaining that "being an 'essential' industry does not mean business as usual." Agents can not bring clients to see houses in person, but can use photos and videos provided by the buyers to create virtual and 3D showings online.

"Business can only be conducted if social distancing and other public health protocols are followed and all must be doing everything they can to help stop the spread," ESD said in a statement. "For real estate, that means brokers can only transact business in their offices or show properties virtually, and anything else is off limits."

Open houses are still barred, as they attract groupings or crowds of individuals, which could increase the potential for Covid-19 to spread, the state agency said.

The rest of the guidance from Wednesday remains unchanged. So home inspectors can again tour through a property to ensure there aren't any pitfalls. And residential appraisers can examine a property to determine its value for purchases and loans.

Brokers can oversee transactions and signings at their offices, but only "while following social distancing protocols," ESD said. And back-office real estate functions – while essential to support the agents, inspectors and appraisers – should still be done remotely as much as possible.

A spokesperson for ESD, which is implementing the governor's business restrictions, said it set the new guidance based on its own review in response to thousands of inquiries from across New York. But many agents – and even industry leaders – were not happy with the change, and voiced it. Both the state trade group and the local group urged members to stay at home.

"My leadership team and I are very concerned with this decision," Donna Littlefield, president of the Buffalo Niagara Association of Realtors, wrote in a letter to her members early Thursday. "As many of you know, we have had a member pass away from Covid-19... I am asking for us to wait and do not act on this Empire State Development decision until we have procedures in place and guidelines to follow."

Individual companies echoed that sentiment. Sam Gurney, president of Gurney Becker and Bourne, said his brokerage firm didn’t change its policy, and would encourage agents to stay home and “limit all in-person work interactions.”

“The health of our employees, agents, clients and friends remains our sole effort,” Gurney said.

And Peter Hunt, CEO of Hunt Real Estate, also encouraged the use of virtual showings, even when it appeared ESD was allowing in-person visits to houses.

"This abrupt change came as a surprise to our Leadership Team just as it must have to you," Hunt wrote in a message to his agents Thursday morning. "Even with the easing of the restrictions placed on our industry, we must remember that the virus is silent and we have no way of knowing where any other person has been or what precautionary measures they may be taking, or not taking, to ensure their health and safety. Please do not do anything to make your customers or you in any way uncomfortable."

The rapid-fire series of pronouncements gave agents a case of whiplash, as they went from being locked down with most other businesses, to apparently being free to go back out into houses, to being restricted once again to virtual showings – which most were already doing anyway. In other words, the only thing that really changed for them was the word "essential."

"We’re not doctors or nurses. We’re not transporting food. We’re salespeople," Blake said.

But the panic, for many, was real. "To green light us to just start showing homes is just foolish. There’s no way we can go from one house to the next and not guarantee we haven’t brought something with us," Blake said.

Agents also complained that they would now feel pressured to choose between taking on clients and feeling safe. They worried they would lose business or be seen as not interested in helping clients if they didn't do showings.

Stephanie Morgan, a broker and co-owner of JRS Morgan Realty, admitted to being "torn" between such financial and health considerations.

"I am anxious to get back to work and regular life, but do not feel it’s in the public’s best interest to bring people through homes, even with six feet between us, at this point of the Covid-19 outbreak," she said Wednesday night.

"The tough part is even if I decline a showing, another agent inevitably will show the home, thus still endangering the public and I lose a client in the process," Morgan added. "It's a tough situation to be in."

Moreover, they said, there's really no urgency for real estate to be a priority right now. Buyers aren't actively looking, sellers don't want people coming through their homes, and many are holding their listings in abeyance for now until the crisis passes, agents said.

"Most people aren’t selling right now. They’re sitting back at home," said Littlefield, an agent at Keller Williams Buffalo Northtowns. "I’ve got listings in the queue, and my clients are waiting until this is done."

And they're confident the market will eventually rebound. "The market is essentially frozen right now, and it will continue to stay that way until we get past this," Carvallo said. "People’s health and safety comes first. The real estate market will be here waiting for us when this is over."

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