Back in April of 2020 I wrote an article for this publication with a headline of House Hunting During a Pandemic.
In it, I wrote about some of the new property viewing procedures and the innovative technology that has allowed us to continue to trade real estate. It was surreal to write about then, and even more surreal to still be writing about this pandemic almost a year later! While we have quickly adapted to the new ways, the challenges home buyers have faced due to COVID-19 are important to note. If you are on the hunt for a property – pre-construction or re-sale – you might find the rest of this article useful.
Buying a home before it is built is already a big leap of faith for buyers, but given that some developers have closed their sales centres and are not allowing visits to their model suites or construction sites during the lockdowns presents a new level of mystery. Buyers might now have to rely on renderings and virtual 3D models exclusively, instead of being able to see an example of finishes and quality they can expect in their potential future homes.
It seems that everything is taking more time these days, which may result in potential construction delays. This may be due to longer material delivery times, labour shortage, longer wait times for city-related inspections, etc., so make sure to plan accordingly. For example, if you are a tenant waiting to move into your new home I suggest not giving your landlord the notice of your vacancy until you have a firm commitment from the developer confirming your occupancy date.
Resale Home Shopping
This pandemic has sucked the fun out of many aspects of our lives, with house hunting being just one example of that. Back in “the good ol’ days” buyers could bring their whole family, and maybe even a couple of friends to look at homes together for extra opinions and moral support. These home viewings would usually be a ton of fun and presented a great bonding opportunity for those families. Now, showings must be limited to two buyers and their real estate representative only.
In most cases, home viewings are now also limited to 15-30 minute time slots, as opposed to one hour slots pre-COVID. This can put extra pressure on home buyers, who are already feeling the pressure of today’s seller’s market.
Also, in many cases no children are allowed to attend home viewings, which may present a separate challenge for some house-hunting parents who now have to arrange for child care during those outings.
If you are shopping for a condo, it’s unlikely that you will be able to see any of the amenities. Due to restrictions associated with COVID, most condominiums have restricted access to their gyms, pools, party rooms, movie theatres and rooftop terraces. You may need to rely on photos alone for this.
Buying a home that needs renovations may also present some challenges right now. During the lockdowns we’ve experienced so far no new construction starts were allowed, which further contributed to the backlog of work for contractors, leading to more delays and wait times. So, if you plan on doing some work in your future home prepare yourself for some likely frustrations and higher renovation costs.
The Ontario Real Estate Association has made it clear that only essential real estate transactions should be made during these times (this does not apply to new construction). Real estate agents are strongly advised to only allow viewings to serious, pre-qualified buyers. Agents may refuse showings to buyers without an immediate need to make a purchase. Open houses have also been forbidden. Which means no more casual browsing or free cookies! In the past, I have always advised my clients that seeing as many homes as possible will help them make a more informed decision once they are ready to pull the trigger. The new guidelines may make it difficult for buyers to get an in-depth understanding of the market before making a purchase. I should mention however, that a majority of listings on MLS now include a 3D virtual tour of the property, which can help with this.
This is something your friends are probably happy about – they won’t have to help you move! For now, you will have to rely on professional movers or yourself for this.
If you plan on ordering new furniture online, I suggest doing this well ahead of your possession date. Many suppliers are experiencing low inventory and delivery delays, especially when it comes to office furniture.
I asked my trusted experts about the new challenges they are facing in their fields of work, and here is what they shared.
Chris Allard, a mortgage broker with Smart Debt Mortgages says: ‘’Many hourly wage income earners have had fluctuating hours worked in 2020 and many self-employed individuals have had reduced revenue and reduced net earnings in 2020. Due to this, they may have a hard time qualifying for the best mortgage rates in 2021. My suggestion to these borrowers is to speak with a mortgage professional such as a mortgage broker as soon as possible to evaluate the impact 2020 has had on their ability to borrow a mortgage loan.’’
Michael Abrams, a partner and lawyer with Kelly Santini LLP says that the main challenge he has faced are delays in many aspects: “Whether it is dealing with lenders or communicating with other firms, there has been a decrease in the rapidity of communication and action. That can translate to mortgage instructions coming to us very close to the closing date or difficulties getting funds from lenders on the day of closing. Add to this the very competitive real estate market which has led to shorter closing dates and it is a perfect storm.”