COVID-19 has had an effect on every aspect of our lives, including our real estate plans. There are still Sellers listing their property for sale, and Buyers purchasing properties right now, albeit much less than we would normally see at this time of year. Considering that a couple weeks ago many listings were receiving multiple offers and we were seeing an overall increase in price, it’s a good opportunity for Buyers to find something without as much competition and for a potentially good price, depending on just how keen the Seller is to sell.
With this pandemic currently in full swing, we’re seeing new Government Protocol that can affect your plans to buy, in addition to unexpected changes to your own lives, so during this time you have to be prepared for the unexpected.
Here’s a quick, non-exhaustive and non-specific list of some things all Buyers should consider if they are still interested in purchasing a property at this time. This is not a substitute for professional legal or financial advice, so work with your Realtor, Mortgage Broker and Lawyer to ensure you understand your obligations, rights and worst case scenario.
(1) Review Property Documentation, Floor Plans, Videos and Photos Prior to Viewings
In an effort to ensure everyone is doing what they can to be socially responsible, Realtors are trying to ensure that viewings are for serious Buyers. Make sure you do some due diligence on the property prior to scheduling a viewing. Realtors will likely have all Buyers and showing attendees sign a Waiver Form indicating that they, nor their Seller, are responsible if you end up infected with Covid-19 after the viewing.
(2) Ensure your Mortgage Lenders are Committed before Making the Purchase Official
Buyers should have mortgage pre-approval in place prior to starting their search. This means a mortgage lender has approved the Buyer to purchase a home up to a certain dollar amount, and are waiting to approve the property the Buyer is interested in purchasing. Pre-approvals only last a certain amount of time before they expire and in this period, lenders can ask for updated financials from the prospective Buyer (including recent paystubs, updated investment portfolios, etc). Once lenders are satisfied with the Buyer and the property, the lender will often submit a “Financing Letter” which means the Lender is committed to the situation and can’t back out. Buyers should ensure that they should not remove subjects on any offer to purchase without an official financing letter from the lender just in case the Buyer’s financial situation changes unexpectedly between subject removal date and the official completion date. In normal real estate markets, it was common for Buyers to remove subjects prior to receiving an official financing letter, but knowing that they had lenders interested in their file.
(3) Be Prepared to be Flexible
At this point all essentials services relating to a real estate purchase are allowed to continue working. This includes Realtors, Mortgage Brokers, Lawyers/Notaries and the Land Title Office. In addition, Movers and those in the construction industry are still allowed to operate, though you never know if someone will fall ill with Covid-19 and needs to cancel or postpone their services, so have a Plan B in mind. For Buyers hoping to purchase new furniture and things for their new space, keep in mind that companies have may have closed their stores and/or may be delayed in delivering furniture. Buyers should try to give themselves an extra few days between the day the move into their new place and the day they need to move out of their current place, just in case.
If you are a Buyer starting your search, and want to ensure you’re getting appropriate, up to date advice during these trying times, don’t hesitate to contact me to chat about your current situation and real estate goals: