Thinking of buying or selling a home during the corona virus pandemic?
As home buying season approached this year, the Corona virus outbreak called everything into question. In the month of March, the premier of Ontario issued stay-at-home order. The last few months have been filled with both emotional and financial ups-and-downs. The new normal has set us up for an equally unique set of challenges. The pressing question for many of us is, is it still possible to buy or sell a home despite of the Covid-19 Pandemic?
- Based on TRERB statistics, the short answer is yes. Having said that, new challenges have to be considered. For instance, following mandatory precautions issued by our province prior to and following the transaction. There are people out there buying and selling real estate, but it’s not just business-as-usual. Government social distancing regulations vary based on the province, and town. As Ontario continues to open sector by sector, certain restrictions will remain.Here are some things you might encounter if you're looking to purchase or sell a property:
Since the increase in unemployment and temporary closure of business's across the country; financial lenders have set a 'hard to obtain' criteria for mortgage qualification. Borrowers with lower credit scores and smaller down payments may find it much harder to qualify and may have to shop a little longer.
Open houses are not allowed and are strongly discouraged. Buyers and sellers are instead relying heavily on virtual tours, which allows people to see inside a home via video. In some cases buyers are making offers without physically visiting the home. When physical showings are allowed, they often require extra caution. The agents and buyers must wear PPE such as gloves and masks. Washroom use is prohibited and visitors must refrain from touching anything during the showing. The seller would open all interior doors so they could easily see inside rooms and closets. The obedience of safety protocols are currently playing an important role in negotiations during the buying and selling process.
Sometimes, a home appraisal is required to get a mortgage. Normally, an appraiser will visit the home to assess its condition for an accurate evaluation. Due to the pandemic, lenders have become more flexible. Sometimes, they will allow alternatives so appraisers don’t have to physically visit the home. The appraiser will use photos, exterior views, market research and other data to estimate a home’s value.
Usually, buyers and real estate agents attend the home inspection so they can follow the inspector around and ask questions on the spot. Some inspectors are going through homes by themselves. After the home inspection, they will send an inspection report to their clients buyers. That can include photographs, videos and visual observations.
If you’re buying a home, its important to review the home inspection report very carefully. Any and all concerns should be asked and clarified before moving forward.
If you’re selling, ask your inspector to use hand sanitizer before entering homes. Disposable shoe coverings and gloves could be warn to prevent spread of bacteria. Hands should be thoroughly washed between viewers and any potential surface that would of been touched.
Home purchase contracts usually outline penalties for failing to meet deadlines or for canceling the deal. In this current market, many real estate contracts include clauses to protect buyers or sellers in case of delays or cancelations. These clauses may address things such as the unavailability of appraisers, inspectors or buyers due to travel restrictions or illness. Alternatively the permission to electronic sign documents could be included in the contracts for sake of limiting human contact.
Tips for buying or selling a home now
Here are some tips if you’re thinking about buying or selling now:
• Carefully consider whether you’re financially and emotionally ready to buy a home and whether you need to move right now. It may be better to postpone if you’re just playing with the idea or worried about losing your job.
• Shop at least three lenders to find the best rate and get a preapproval for a mortgage before you start looking for a home. Remember that the lenders are also affected by COVID-19, and the process may take more time than usual.
• Don’t be surprised by a competitive market. There may be fewer buyers out there, but there are also fewer sellers. Still there are some multiple offers, But the market is active and not too competitive because of the low inventor.
• Stay updated on the regulations and be prepared to see revisions to the real estate regulations.
By Moti Arusi July 4, 2020
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*** VERY IMPORTANT If you are buying a brand new condominium, the paperwork and entire process can be confusing and overwhelming. Many Buyers are not aware that when a brand-new condominium is purchased from a builder, there are actually two closings:
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