What to know if you're buying or selling a home during COVID-19
Wednesday Apr 01st, 2020
What to know if you're buying or selling a home during COVID-19:
A buyer cannot cancel a deal because of COVID-19.*
As a BUYER this is what you might expect:
- You may not have the opportunity to view the property in person. There are new legal clauses being developed that will address this by making the offer conditional upon seeing the property in person at some unknown date.
- Many Sellers don’t want to let anyone into their homes right now.
- Limited number of properties on the market.
- Realtors abiding by the Public Health and Ontario Real Estate Association guidelines are no longer meeting clients in person. This means that, except in unusual circumstances, most of your real estate search will, by necessity, be done online, using photos, floor plans and virtual tours.
- Condo buildings are increasingly restricting visitors to residents, which means that it may not be possible to see a condo that’s for sale until safe to do so.
- Open houses are no longer permitted.
- Financing conditions: Approvals are taking longer. If there is any change in your financial history from when you buy a property and when you close can impact securing a mortgage.
- Bank Appraisers: need to physically go through a home to confirm value. Appraisers were recently directed by their governing body NOT to enter homes physically, limiting the appraisal process to photos, information supplied by agents, MLS listings and exterior views. This may impact the value estimate.
- Home Inspections: Many home inspectors although considered essential, have chosen not to work as to not put themselves and others at risk.
- Status certificates for condos: Condo boards are closed and may not be able to provide certificates which is a standard condition on any condo offer.
- Closing Dates: Property values may be reduced especially if Closing dates are far out from the date of purchase. If the property has dropped in value the Bank will fund based on current value which may result in the Buyer being responsible for the gap in funds.
As a SELLER this is what you might expect:
As your real estate agent, my motto has always been "To Get You Top Dollar For Your Home". Experience, Marketing, Advertising, Staging, Preparing your Home are all valuable ways to achieve this.
Selling your home successfully involves a lot of professionals including photographers, stagers, lawyers, land registry office, insurance agents, mortgage brokers, lenders, realtors, home inspectors. Many of these professionals are not able to do their jobs due to illness, quarantine or government restrictions at present time.
Your property may not be showing the best it possibly could be. You run the risk of potential buyers not considering your home for these reasons. Sellers also run the risk of unsuccessful deals due to lack of professionals being able to do their job. You also run the risk of a discounted price to reflect the risks the Buyer is taking.
Selling/Showing Your Home:
This process has always been one of the best ways to get your property sold. Now as a Seller you are faced with ensuring the property is wiped down, proper sanitation tools are made available to Buyers (i.e., gloves, sanitizer), possibly move out while your home is for sale.
Selling/Showing Your Condo:
If you are selling a condo there may be a number of obstacles in your way. For instance:
- Some condo buildings have restricted access solely to residents. If there is no access to realtors and Buyers, it's going to limit the number of buyers.
- Status Certificates: some condo boards are closed and no guarantee you can get one in a timely manner.
- Safety challenges relating to physical distancing on elevators and common areas.
Selling/Showing Tenanted Properties
Right now selling a tenanted property can be somewhat complex. If your property is tenanted right now you cannot guarantee vacant possession. Ontario Landlords are finding it very difficult to evict Tenants and the Landlord Tenant Board (LTB) is currently closed.
Forcing a tenant to allow showings can create safety concerns for your tenant. You cannot force your Tenants to allow showings, given the safety concerns presently.
Offers & Deposits
Offers: Many Realtors use electronic signatures already to have you sign offers. Longer conditional periods for financing and inspections are the norm these days, and non-standard COVID clauses are being added to offers to address potential closing issues, delays, illness and issues with pre-close visits.
Deposits: Most realtor offices are closed but will accept Wire transfers for deposits. A Buyer typically has to provide a deposit within 24 hours from date/time of acceptance and possible delays may occur due to COVID-19.
If you are successful in selling your home during COVID, you’ll need to prepare for:
- How to handle the buyer pre-close visits (if the buyer, their agent or someone in your home is sick, isolated or quarantined)
- Delays due to appraisal issues (appraisers may not be available, able to do their job or they may be discounting values)
- Land registry offices are currently open, and we've been advised it's unlikely they will close but things are changing daily sometimes hourly.
- Closing issues: Most real estate lawyers are able to sign documents electronically, but some lenders require the lawyer to meet the Buyer in person, which may or may not be possible in the future. Make sure your lawyer can close electronically and hope that the Buyer is using a lender that doesn’t require an in-person meeting with the lawyer.
- Movers: Currently, movers are considered "essential" in Ontario, but many are in isolation or quarantine or choosing not to expose themselves. You may need to be creative with organizing your move.
The reality is that people still need to buy and sell homes. There are people who have job transfers, have an existing contract to uphold, or simply need to sell or buy for financial reasons. Selling or Buying a home during COVID-19 isn't easy right now but it's not impossible either.
If you find yourself in a position where you need to buy or sell right now, know that Realtors are working hard to figure out how to make it happen. Please call, text or email me any time.
Things are changing daily and I will update this BLOG accordingly. Stay safe! Stay healthy!
*Serious consequences could result. The only way a deal could be cancelled at this time is if the government registration system completely closes down; if lenders cannot fund mortgage loans per realestatelawyers.ca
April 1 2020