I asked Matt Hodges to help me with this post on how #Sandy is likely to affect real estate closings. (bolding & links added by me)
Whenever a natural disaster occurs, there is usually an effect on real estate closings. When the earthquake occurred last year, many counties from Louisa to Culpeper were declared disaster areas. Several actions typically follow, depending on the severity and we would expect similar reactions this week.
First, lenders will start requiring appraiser re-inspections of houses going to closing, to make sure that the lenderâ€™s interest in their collateral is secure. In some instances, an employee of the lender may do this visual inspection as well.
Next, homeowners insurance companies might not issue new policies and may suspend pending binders for coverage prior to closing. Talk to your Realtor, attorney, insurance agent to ensure you are all on the same page. Prepare for a delayed closing.
Finally, we expect disruptions in service – power, phone, internet. From lenders to settlement agents and attorneys, many of us will be without power and thus, unable to close transactions. This can cause blown rate locks or the need to extend interest rate protection.
Good communication amongst your partners is critical during times like these.
Update – I asked an insurance agent in Charlottesville for his input (because I’m not one) and he emailed:
That’s not the first time I’ve heard this today, and the short answer is, check with your insurance carrier. Â Some insurance carriers are not binding new business anywhere in the storm’s path until the event is over. Â This means the ability to place new coverage, existing policies, and policies that have been “bound” should be fine. Â Some carriers are still writing business in this area (as of this writing, we are).
Coverage that is already in force or “bound” but not issued should still be fine, provided they are paid and there are no other company-specific restrictions.
Update 2: I heard yesterday of a closing delayed because the lender was requiring a reinspection (reasonable, in my opinion) due to FEMA’s declaration that Virginia is/was in a state of emergency.
So, what this means is this:
First. Be Safe.
A few stories and resources I’ve found useful/helpful in preparing:
- Twitter remains the best way to keep track of what’s happening; this is my Twitter Charlottesville Media list.
- UVA, Charlottesville and Albemarle have put worked together (see? They can work together!) to put up a website – Community Emergency Information – that is chock full of great information. Tips, radio stations, links to locality information and more.
If power is out, call your power company to report it:
o Dominion Power: 1-866-366-4357
o Central Virginia Electric Coop: 1-800-367-2832
o Rappahannock Electric Coop: 1-800-552-3904
o Appalachian Power: 1-800-956-4237