Because of the coronavirus (COVID-19) outbreak, everyone around the world is keeping a large social distance, and everyone is also hoping that others are following the same. Everything is closed, ranging from factories to shops, schools, gyms, dealerships; almost a lot is closed (except for some bank offices, factories, stores) but hospitals are always open.
In short, a lot of white-collar workers are working from home. In the United States, the Congress and Senate passed a $2 trillion stimulus bailing out companies in the current crisis. Canada might do the same. Let us give you an update about the current conditions of Toronto’s real estate market.
Despite the pandemic’s severity, the real estate market of Toronto is running strong and new listings are being added daily. Agents are working hard with both buyers, sellers and homeowners in ensuring the fulfillment of all safety precautions ensuring the health of everyone alike.
Everyone in the real estate industry understands why everyone is worried during this uncharted period. Hence, let us have a look at what home buyers should expect when buying a home during the coronavirus outbreak.
What should buyers be expecting when buying a home during the current COVID-19 pandemic?
Let us consider buyers and people looking to buy or in the process of purchasing a home during the current COVID-19 pandemic.
The advice from public health officials and the esteemed excellency, the Prime Minister of Canada, gave with regards to the current pandemic: Stay Home.
This pandemic should not be taken lightly. The situation is worrisome, and a lot of people have fallen sick. For real estate professionals and industry; it is a time when their hectic schedules take a rest, but their presence is largely needed as many are still seeking to buy a good home during the pandemic.
The following are the reasons why people are looking to buy a home during the current pandemic:
- Homeowners have already sold their homes and have not purchased a new one.
- Tenants either gave the notice to vacate their property or were given the notice to leave before the coronavirus pandemic started.
- Personal circumstances.
In times like these, buyers need to sit and watch the market and wait for the right moment before they can make a purchase.
Why should home buyers watch and wait before they purchase a new home?
It is wise for buyers to take a pause, watch the scenario and wait until the right moment arrives. No one knows what the future holds. When it comes to the market and prices, it is hard to predict what will happen next.
The reason we all must pause and wait is that it is not worth putting everyone at risk, both in terms of money and especially in terms of health. If buyers are looking for a deal and hoping sellers are desperate in looking for them, then buyers should not make a buying move.
Similarly, if prospective buyers got time on their hands and like to do house hunting, then they need to realize that it may be a hobby for them. But for the realtor, it is not a hobby. Also, nobody is invincible and immune to the coronavirus; anyone can fall ill to this disease.
If buyers find themselves in a position where they need a home right now (be it a townhouse, a loft or a Toronto condos available in any option), they need to now that realtors all across the province of Ontario are working hard in trying to make it happen and possible. However, it isn’t the normal business routine for everyone given the way things change quickly.
Here’s what buyers should expect in the city’s real estate
The financial aspect
As of now, banks are deferring mortgage payments as large scale layoffs are occurring. Obtaining financing for anything is uptight because of uncertainty and complications hovering around.
- Interest Rates: They have been fluctuating and have impacted how much buyers can borrow.
- Approvals: With most of Toronto working from home, things are taking longer, and a pre-approved mortgage is out of sorts.
- Financing: Lenders have the right to confirm employment and other financial details prospective home buyers have until the closing date. In the current environment, there is a lot of uncertainty and almost anything could happen in between. If a buyer buys a house, loses their job then there is no telling whether the lender will approve their loan application or not. Hence, no risk should be taken in this regard.
- Appraisals: Banks depend on appraisers to go inside the homes to estimate and confirm the value. They have recently been ordered to not enter the homes, thus limiting the process to pictures, the information provided by agents and MLS listings, computer-generated models and the like. Its impact on closings and mortgages is unknown.
- Deposits: The traditional procedures of deposit became complicated because real estate offices are closed, and a lot of staff are working remotely from their homes. Digital options are available but there are associated complications with them.
There are two tips prospective homebuyers can follow, given by real estate professionals:
- It is important to remember that the mortgage broker does work for the home buyer but also must inform the bank of any change in information about the buyer that could impact the mortgage contract. Meaning, if the home buyer changed jobs, then the mortgage broker must inform both the bank and their lawyer.
- Some banks insist on mortgage documents to be signed in person, on paper or with the lawyer. Since the current situation does not allow anyone to leave their homes, signing them in person is not possible. Buyers should act smart and ask their mortgage rep if they will be accepting electronic signatures or not before they commit.
Home listings and sales
As much as anyone wouldn’t want to admit, listings and sales for homes in Toronto are stagnant and are getting reduced (thanks to the coronavirus pandemic).
The showing aspect
Non-essential services and businesses are closed for the time being. Keeping that the government has issued strict rules and guidelines on physical and social distancing, hence rules for seeing a listed home have changed too.
Why? Because most sellers are not letting anyone in their homes right now. Agents are following guidelines of the Public Health Ontario and Ontario Real Estate Association in avoiding meetings in person. Hence all real estate searches and work will be done online (thanks to virtual tours, floor plans, and photos).
Real estate firms, realtors and property developers are also experimenting with video walkthroughs. Buyers, sellers, and agents tour homes that are to be sold.
Condominium buildings have restricted visitors to just residents. It means that condos for sale cannot be visited until the pandemic is over. Similarly, open house sessions are no longer taking place in the greater Toronto area as well.
Offers are affected too
Offers often present their unique challenges because buyers wouldn’t get to see the homes in person. Legal provisions are being developed to allow for circumstances where buyers can buy homes without having to see them. Such provisions are made to deal with eventually differences when buyers eventually get the opportunity to visit the home.
Such a situation isn’t ideal, and this may reduce the risk but does not eliminate it.
Because of the Coronavirus pandemic, typical offer conditions like home inspections, status certificate reviews and the like are not possible. The same goes for Condo management and boards who have closed due to the pandemic. When this will all change? No one knows at the moment.
It is not easy to stay and wait for the market to cool down but its best to stay at home and practice caution. Social distancing and isolation are the new norms because of the COVID-19 outbreak and the pandemic is a worldwide one. With lenders, brokerage houses, management boards, and real estate offices taking a break due to the pandemic, it would be best for prospective buyers to stay at home and wait for the pandemic to slow down so they can go out and see the homes they want to buy, with ease.