FAQ on COVID-19 and Real Estate
There are a lot of uncertainties surrounding COVID-19, how it’s impacting the GTA real estate market, how long the situation will last, and factors that will play a part in your decision to buy or sell now or later. Below are some of the most frequently asked questions.
Is the GTA real estate market going to be heavily impacted by COVID-19?
During economic downturns, the real estate market is usually more robust compared to the price dives experienced by many asset types such as stock equities. The reason is because people still need a place to live, and the government usually cuts interest rate in order to stimulate the economy. This means lower mortgage rate and more buying power for those looking to purchase a home or get into the real estate market. Check our earlier article on COVID-19’s impact on the real estate market in the GTA.
Although there are still a lot of uncertainties, history tells us that markets usually make a strong comeback. China’s recent success in reducing the number of community transmissions through social distancing resulted in businesses being re-opened and life slowly returning to normal. Once the COVID-19 crisis here is over, the factors that have been driving the GTA real estate market will still exist: low supply / inventory and increased demand due to the growing population and influx of people who move to Toronto and need a place to live.
FAQ for Home Buyers & Renters
What can I do now as a prospective home buyer?
You can browse our listings and contact us to discuss your intent to buy. One of the advantages of buying now is that you might face less competition from other buyers – hence there could be a lower need for “bidding high” in fear that you will be outbid by other potential buyers. We can help you get started with photos and virtual tours of some of the properties you might be interested in. If there is a property that you feel you might want to proceed with and make an offer, we can set up video conference meetings and take you to the property while practicing social distancing.
If home showings are currently on pause, what measures do you have in place if I’m serious about buying a particular property?
Virtual tours and video conference calls are used first to make sure that you’re really set on the home you plan to purchase. If you’re serious about a particular property, we make sure that the seller takes extra cleaning and sanitation measures before, during, and after the in-person visit. This includes wiping down and disinfecting high-touch surfaces (door handles, cabinet pulls, doorbell, etc.). You also have the option to wear a mask and gloves as you tour the property or unit.
I have signed an agreement to purchase or rent a place, but I’ve recently lost my job due to COVID-19. Can I back out of the deal?
We understand that economic times are tough for most people during this time. But if you have a firm deal, you are still legally obligated to close on the transaction. If you don’t, you could be open to legal action. Many banks and lenders are offering mortgage deferrals for up to 6 months at this time. You might want to contact your bank or lender to discuss options.
If I have signed an Agreement of Purchase and Sale, will my closing date be affected?
For now, your closing date should stay the same. If you’re a buyer, your will still be able to move into your new home as planned. Banks, financial services (including mortgage brokers), professional services (including lawyers), land registration services, real estate agent services, and home moving services are considered as “essential services” in Ontario.
If I have signed a home rental agreement, will I still be able to move in on the moving date?
Yes, there are currently no restrictions to move into a new home. You might want to connect with your current and new landlords to make sure all arrangements are in place (e.g. exchange of keys, cheques, moving logistics, etc.).
FAQ for Potential and Current Home Sellers
What can I expect if I’m a seller at this time?
Expect less viewing activity and lower number of offers on your current listing. It’s advisable that you have photos and virtual tours set up for potential buyers.
Can I still list my property for sale now?
Technically there is no restriction on listing new properties for sale. However, it is recommended that you wait. In-person home showings are currently being paused during to adhere to social distancing rules and the ban on public gatherings. If you list your property now, and even if you use virtual home showings, the number of potential buyers and offers will likely be much lower.
If I want to sell my place, can I hold home showings?
As of March 21, 2020, the Toronto Real Estate Board (TREB) and Ontario Real Estate Board (ORB) strongly recommend the pause of “in-person open houses during the Ontario State of Emergency”. You can, however, hold virtual home showings through video conference calls.
I’m an Airbnb home owner, but revenue from short-term rentals has taken a big hit. Should I sell my Airbnb property?
This is a personal decision that requires you to think of your current and future financial circumstances and preferences. Do you have any other stream of income at the moment? Are you able to still pay down bills and other financial obligations without the Airbnb rental income? Do you need immediate cash from selling the Airbnb property? Note that even if you decide to list your Airbnb property for sale now, it might be some time before you get offers and a closed deal.
You have the option of waiting for the current crisis to pass and tourism will pick back up, try renting it out long-term, or listing it for sale. If immediate cash is not needed to meet current financial obligations, we suggest waiting it out until the COVID-19 crisis is over. You might be able to sell for a higher price then, with more offers and bids from potential buyers.