Before we begin, I need to say the best advice comes from our Public Health Officials and Prime Minister: Stay Home.
Today I am talking to people who are in the process of buying or selling a home during Covid-19.
While Real Estate (and all that goes along with it) has been deemed essential - it is not business as usual. Some things have changed.. mostly the way WE (as Realtors) have changed the way we practice. It is not always simple.
LEGIT Reasons you NEED to buy a home right now:
* You have sold your current home and need to buy the next one.
* You have bought a house and now need to sell your current house.
* You are a tenant and you have been given notice.
* Personal circumstances like you are going through a divorce or a job transfer.
If you just WANT to buy a house right now, I strongly recommend that you wait. While there is no telling what the future holds and it is impossible to predict what the market will do and their prices, it's just not worth the risk. Health wise and Financial wise. (I will explain more about the financial side.) It might be wise to wait.
* You are looking for a deal and hoping Seller's are desperate (they are not).
* You have time on your hands and you like house hunting (this is not a hobby for your realtor & the Sellers are on the market right now for serious buyers only)
* You think you are immune and invincible to getting the virus or passing it onto others (you are not).
If you find yourself in a position that you need to buy right now, Realtor's across Ontario are working hard to figure out exactly what that looks like to make it happen. It not business as usual. It's just not. Pack some patience for yourself, your realtor and the process. Things are changing all the time.
Let's talk about Financing:
In this market now more than ever it is important to have your pre-approval ready to go.
Buying and Selling Realtors are vetting EVERYONE to lessen the risk exposure for themselves and their clients.
In the environment that we are in banks are seeing deferred mortgage payments and layoffs. (My own bank has reduced hours of operation.. ) there is complications and uncertainty.
Appraisals: Appraisals are a financing concern. Banks are dependant on appraisers to go into homes to estimate and confirm value. Appraisers were recently directed by their governing body to NOT enter homes physically, limiting the process to photos (pray the listing realtor hired a professional - I've seen some that photo's were done with the realtor's thumb in them and it was difficult for the appraiser. The uncertainty for the bank meant the Buyer had to come up with more money for a down payment if they wanted the house . .) So literally Appraisers are "looking in the windows" or driving bye. The impact moving forward it uncertain. Lenders want to be protected.
Approvals: With most people working from home, everything is taking longer, including getting pre -approved.
YOU: Lenders have the right to confirm employment and all other financing details right up until the closing date. I have always cautioned my Buyers to not do anything to change their situation.. don't change jobs, don't buy a new car.. don't even apply for a credit card for this reason. In today's world almost anything can happen, if you bought and then lost your job or got laid off, there is no guarantee that the lender will go through in providing a mortgage. There is no way to predict 100%. This is a pretty big risk.
Interest Rates: They have been fluctuating, affecting how much Buyers can borrow.
Deposits: The traditional deposit procedure - bringing a bank draft to a real estate office within 24 hours of an accepted offer - is complicated. Many offices are closed, with reduced staff working remotely. Digital options are available but you have to be ready - again with banks on reduced hours etc., and the 24 hour deadline can't be breached.
NOTE: Some banks continue to insist that mortgage documents are to be signed in person, on paper with your lawyer. You will need to talk to your lawyer to make sure they are doing face-to-face transactions. Some lenders will accept electronic signatures. You should ask your Mortgage specialist if the lender they have chosen for you will allow electronic signatures before you commit.
Listing and Sales:
No big surprise here . . listings and sales are down right now.
Showings: With the changes that the State of Emergency has presented there are significant changes on seeing a home that is for sale:
* Most sellers do not want anyone in their house right now.
* Most local realtors are abiding by the Public Health and the Ontario Real Estate Association guidelines and are no longer meeting clients in person. This means that except for unusual circumstances, most of your real estate will be done online, using pictures, floor plans and virtual tours.
* Video walk throughs (FaceTime, Skype etc.) are being experimented with - where the Realtor or the Seller takes you -the Buyer through electronically.
* Most condos are restricting visitors to their owners, which means it may not be possible to see a condo.
* In Person Open houses are no longer happening.
* Expect to sign a disclosure in writing BEFORE even asking to see a house that your are not a health risk.
* Expect that your agent is going to ask you all these questions in advance and they still can decide that they do not want to take you through..even IF you check all the appropriate boxes.
Offers present their own unique challenges as buyers may not have had the opportunity to touring person. Legal wording is being developed for these situations where buyers are buying "sight-unseen", with provisions when the Buyers eventually have the opportunity to visit the home.. far from ideal but hopefully to lesson risk . . but will not be able to eliminate it all together.
Typical conditions that are used to protect a buyer such as home inpections have changed as Home Inspectors are limiting their risks with public safety as well and often ask that the Buyer is not present for the inspection. Condo management may be closed and boards unreachable for status certificates . . just not available. Then what?
Buying a house right now for the vast majority of Buyers is a risk. We hope things return to "normal" soon, and we will be able to view and buy homes again. In the meanwhile, Stay Safe.