Tips for Buying & Selling during COVID-19
Resources for Buying/Selling/Offers during COVID-19 Pandemic
The Ontario Government released the essential business for our current COVID1-19 crisis: Essential Services in Ontario – #67 – Real Estate.
You may be wondering why houses are selling on the market (and being listed daily).
- A seller may have bought a house right before the COVID restrictions took place and will need to sell their house to close on the one they purchased.
- Some buyers need to purchase a house during this pandemic or they will be homeless.
- A seller has already sold their home but has not bought one yet.
- We can’t judge if someone is in a personal circumstance like, divorce, abuse or a financial crisis before the halt of the market.
(I’m sure there are more reasons, but these are some of the situations my clients find themselves in)
As we know, things are changing daily, and even hourly. According to the Ontario Real Estate Association, they are urging Ontario Realtors to stop all face-to-face business. Read the full article here. So it’s a fine line to keep our family and ourselves safe, but still provide assistance to our clients that need help.
If you are not in any of the predicaments above, I would recommend that you wait before you enter the real estate market. As a buyer, the inventory is dwindling, and there was little inventory to begin with. I don’t see any deals to be had, and less inventory to choose from.
As a seller, especially if you have a unique property or a higher price point, we do not know what the market will bring in the days and weeks ahead, so it’s best to hold tight and wait it out.
If you are a current homeowner and are worried about your mortgage, you can contact your mortgage broker and/or bank and ask for a deferral. This is one option, and deferred payment policies vary from lender to lender, but many are offering deferred payments for up to 6 months, depending on circumstances. A deferred payment does not mean the payment is forgiven. The payment still needs to be made, but it can be paid at a later date.
Each lender has their own policies on who qualifies for deferred payments. In general, you will need to provide evidence that you have been significantly impacted by the COVID-19 crisis to qualify.
If you do need to list your house on the market now here are some tips to protect you and your family
- Consider selling your home with professional pictures and virtual tours only. Have the buyers agent to an in house live chat while in the house to show the buyers.
- Have all lights, doors open during the showings.
- Have only one set of buyers in your property at a time without overlapping appointments and NO children.
- Pick specific times your home is available for showings to prevent you from having to sanitize your homes several times a day.
- Have the buyers and buyers agents confirm they have not been out of the country in the last 14 days or been in contact with anyone who has. (consider having them sign paperwork verifying such) – Click here for sample
- Have them also verify they are NOT exhibiting any flu-like symptoms.
- Place a cautionary sign(click here for a sample) on your door to remind buyers what their obligations are when viewing your property.
- Have all parties wash their hands.
- Leave sanitizer available for the buyer’s agent to wipe down the doorknob, keys and lockbox upon exiting.
- DO NOT be home during the showing.
- DO NOT have an open house at this time.
These are just a few tips to keep you and your family safe. Talk to your Realtor® for further advice.
Electronic Signature and Zoom Meeting
There is no need to meet your agent in person. Everything can be done electronically. Unfortunately, there are still agents NOT providing electronic signature options to their clients and they need to figure this out. I was working with an agent just last night (March 24th, 2020) and was sending me the offer to the fax machine at our office because she is not set up electronically. Our office is currently closed and I’m not even sure our fax machine works anymore so make sure your agent gets organized and has this technology in place.
Some Inspectors are doing the home inspections without agents or buyers present. This keeps the home inspector safe and allows fewer people in the home
Mortgage Brokers and Banks are still processing offers however it may take longer than the 5-7 business days to get a commitment back. There may not be any appraisals at this time. Consult with your bank or mortgage broker
Most Real Estate offices are closed to the public and some(including ours) are not staffed but the admin staff is working at home so it’s best to be set up to do your deposit via e-transfer. Keep in mind most banks will only allow a limited amount of e-transfers a day and deposits are due within 24 hours of acceptance. You will need to make alternative accommodations in the offer if your deposit can not be sent in one day. Not all brokerages are set up to take e-transfers and some banks are not going to be able to provide you with a certified cheque so make these arrangements before making an offer on a property.
Clauses to put in your offer
Thanks to lawyer Mark Weislder https://www.realestatelawyers.ca/ – here are some clauses that he recommends to put in any offers:
The Buyer shall pay the balance of the purchase price, subject to the usual adjustments by wire transfer. The parties acknowledge and agree that all closing documentation can be signed electronically and forwarded by email or fax in accordance with the Electronic Commerce Act, 2000, S.O.2000,c.17
The parties agree that the keys to the property shall be left in a lockbox at the property and the code to the same is to be provided to the Buyer’s lawyer in escrow pending closing of this transaction.
The parties herein acknowledge and agree that they are required to close this transaction notwithstanding any impacts of COVID-19, save and except the closing of the Land Registry Office(s) and all financial institutions. In the event the closing cannot occur due to a shutdown/disruption of the Land Registry System and/or banking system, then the closing date shall be automatically extended to the fifth (5th) business day following the date upon which said systems have returned to operational status and can clear funds accordingly.
Buyer and Seller acknowledge that due to measures taken by the Provincial Government in response to the current COVID-19 pandemic, there could possibly be a delay at land registration that would affect the actual registration date from the date herein contemplated. In such an event, the Buyer and Seller hereby agree to extend the completion date of this transaction until the next possible date following the scheduled date of completion that registration could actually be affected, with no additional charges being made to the Buyer. Notwithstanding the foregoing, in the event, the Buyer’s title Insurer has provided “gap coverage” to the Buyer, and all closing funds have been paid to the Seller’s Solicitor in trust, keys may be released (possession transferred) to the Buyer with title transfer and registration to take place at a later date. In such circumstances, all expenses and risks related to the property shall be the responsibility of the Buyer from the date of such escrow closing.
Problems to watch out for
Lawyers: Find out if your lawyer is equipped to handle the closing electronically.
Appraisals: Reach out to your mortgage broker and go over the issues with appraisers not available.
Closing Date: Most closing dates are at the end of the month; consider a less common closing date so your lawyer and bank will not be as busy.Financing Fall Thru: (firm offer in place already) While there are rumours that buyers say this is an act of god and now they have lost their job and will not proceed with closing it is a FIRM sale and there could be serious consequences to the buyer and/or seller if you DO NOT complete the closing. Consult with your lawyer immediately.
Land Registry Office: Currently they are listed as an essential service however this may change. If it does close it will delay closing until they are open. Start to make a plan in place in case this does happen and you need to make alternative living arrangements especially if you have sold and closed and haven’t moved into your new home yet.
Movers: They are listed as an essential service however they may not be working. Make sure to check in to see if they will be available. Utilities: Don’t wait until the last minute to change or update your utilities, mailing address and any other changes you need to make. Some government agencies are closed already but don’t delay as you could be experiencing long wait times. Consider using their online forms but make sure to follow up.
Remember this is uncharted territory for everyone. I don’t think anyone expected the pace at which this all came at us full force. If you need to sell then set up your plan and make it happen while doing everything you can to keep your family safe and others. If you don’t need to buy or sell now, then hold tight and keep an eye on the market and wait it out.
* Not intended to solicit properties already for sale or buyers in a buyer representation agreement.