Jennifer English

REAL ESTATE IN THIS TIME OF COVID-19

26 March 2020
Jennifer English

COVID-19 IMPACTS THE WORLD

As Coronavirus spread quickly across our world, changes to ALL our lives started happening, and we needed to adapt, quickly. With each passing day, new information led to new and necessary change, primarily, social/physical distancing. Fast-forward to the writing of this blog, Ontario is in a 'State of Emergency', all non-essential services have been ordered closed, and real estate, in somewhat of a surprise, was deemed essential. 

Before I get into anything to do with real estate ...

I hope you're well and keeping safe, and that the same is true of your loved ones. This is a scary time. I know for myself I'm feeling a sense of fear and uncertainty, however, it's combined with a great deal of hopeful optimism. Profound gratitude to all the people on the front lines, healthcare professionals, grocery store employees, pharmacies, delivery people, restaurants offering takeout, and so many more. And to all our levels of government, as they work together, within our country, and throughout the world, doing all they can to protect us, and protect our nation. They deserve as much support as we can give them and for those of us with the ability to #stayhome, that is our contribution.

REAL ESTATE, IT'S AN 'ESSENTIAL SERVICE'

But make no mistake about it, it's NOT business AS USUAL!

With so many pending deals in the pipeline set to close and real estate services directly affecting 'shelter', I do think we're essential, but let's clarify 'ESSENTIAL'. It's for clients NEEDING to buy, sell, or lease during this time of COVID-19. 

If you are in the WANT category of buying, selling, or leasing right now, I strongly urge you to 'get onto the sidelines' and wait this out! It's not worth putting yourself and others at health or financial risk.

What does NEEDING to buy, sell, or lease look like:

  • you've already bought your next home but haven't sold your current one
  • you've already sold your current home but haven't bought your next one
  • you're a tenant and either gave notice, or were given notice, to vacate, before COVID-19 began
  • your financial situation before COVID makes it necessary or, since COVID, feels like it may be necessary
  • personal circumstances like a marriage or a divorce

What does WANTING to buy, sell or lease look like:

  • you're hoping prices will drop (Sellers are NOT desperate, no "fire sales" here)
  • your Tenant didn't pay rent and you're panicking (you may qualify for a mortgage deferral)
  • you can't work right now and worry about paying your mortgage (you may qualify for a mortgage deferral)
  • you can't work right now and worry about paying your rent (the government has financial options for you)
  • you think the virus can't get you, it can

YOU DO NEED TO BUY, SELL OR LEASE

Know that real estate professionals in Toronto and across the GTA/Ontario are working hard to make it happen.

Thankfully, in this digital/electronic age, REALTORS have options available which allow us to continue providing best possible service to our clients through COVID-19. It's a different type of service given we're in a significantly different world at present but, it remains as high-level as possible. Public and agent open houses were one of the first things to go. Large-scale social media promotion, not happening. That's been a real balancing act, needing to advertise properties while recognizing, and quite frankly agreeing with the public's understandable distaste for marketing right now.

Showings are one of the greatest challenges. 'In-person' is strongly discouraged. Not only is it more difficult to maintain social/physical distancing, everyone has to be sure not to touch surfaces. Things like lockboxes, door handles, or light switches need to be diligently wiped with disinfectant. Sellers need to perform a sanitization routine before and after the showing. My brokerage, in an effort to mitigate as much risk as possible and provide greater safety assurance, has implemented a mandatory disclosure be signed by all parties having 'in-person' contact.

Here' a list of additional things being done, more-so at this time, being done differently:

  • mass sharing of listings, particularly those that are exclusive, through private Facebook REALTOR groups
  • most new listings are now being priced AT market value (very few REALTORS are listing low to attract multiple offers)
  • photography and video (not likely by professionals)
  • staging (not likely by professionals, if at all)
  • home inspections have about a 50/50 chance of being an option
  • OFFERS:
    • being made 'sight-unseen', the majority of these being conditional upon the property being viewed 'in-person' AFTER offer acceptance 
    • longer conditional periods for financing, home inspection, status certificate review
    • all real estate documents being signed electronically (including lawyers/lenders using electronic or video signings)
    • being presented by email or video conferencing only
    • deposits for accepted offers, required within 24 hours, by EFT (Electronic Funds Transfer) or Direct Deposit (provided banks remain open) ONLY
    • COVID-19 clauses to address potential closing delays, possible quarantine/illness of Seller(s)/Buyer(s), acquiring of keys to the property
  • CONDOS:
    • many condominiums are enforcing RESIDENT ONLY ACCESS - if REALTORS and their Buyers can't see the unit a) it may not be possible to sell it, b) you may HAVE to accept a 'sight-unseen' offer that is conditional upon Buyer being able to view it at a later date, c) the price may need to be reduced to reflect the risk the Buyer is assuming
    • potential challenges getting the Status Certificate (required for the mortgage and for lawyer review)
    • greater challenge for maintaining social/physical distancing due to elevators and common areas
  • CLOSINGS:
    • possible delays due to appraisal issues (not being available/able to do their job)
    • possible delays if a Buyer pre-close visit cannot be satisfied (due to Seller/Buyer illness/quarantine)
    • Buyer's being unable to close due to job loss/layoff or other change to their financial situation (though Buyers can't just 'walk-away' from a firm sale without serious repercussions)
    • Land Registry Offices are OPEN but, if they close, closings could be impacted (we're providing a COVID-19 clause which allows the transaction to close, noting the transfer of title will be registered within 5 business days of the LRO re-opening, this would rely on having "gap coverage" with your title insurance)
  • TENANTED PROPERTIES:
    • UNABLE to guarantee vacant possession as Landlords NOT presently allowed to evict tenants + the Landlord Tenant Board office is closed
    • Tenants can't be forced to allow showings given the legitimate safety concerns right now

WHAT ABOUT PROPERTY VALUES

As of right now, NO downward movement in prices!

Here's what I mean ... over the last 7 days in W01 and W02, (think High Park, Bloor West, Roncesvalles, all in Toronto), detached/semi-detached and attached/row houses had an average sale price of $1,459,244. Condo apartments in C01, (downtown Toronto), a total of 56 condos sold setting the average sale price at $876,284. These are VERY STRONG numbers! I'll be sharing the full picture with you when the Toronto Regional Real Estate Board releases the stats for the month of March.

I don't think any of us could have foreseen a time in our lives quite like this. Please stay safe and keep healthy. We're in this together, and together we will prevail!

For additional details around Real Estate in the time of COVID-19, here is the Ontario Real Estate Association's guidance to REALTORS.

Here are additional information resources from the Canadian Government and the City of Toronto. Government of Canada COVID-19 link. City of Toronto's COVID-19 link.