These are definitely interesting times, and times that we will never forget. Despite having been on lockdown, and home sales being down tremendously, the ratio of buyers to sellers has remained healthy for the most part, which has kept home values relatively stable.
As we begin our journey back to normalcy, more businesses are starting to re-open. We’re now in what is typically the hottest season for the real estate market. The weather is warming up fast, and more people are starting to get the itch to buy. My team is starting to see a large increase in the number of requests for preapprovals, and many of our previous preapprovals are starting to come out of the woodwork and seriously enter the market once again. There are however still many who are still waiting on the sidelines for the perfect time to re-enter the market, which means there is still plenty of opportunity to get in ahead of the pack.
It’s still far from ‘business as usual’ in the real estate market however, and there are some key differences between purchasing a home now, vs. purchasing a home during regular times.
The Importance Of Stable Employment
Over three million Canadians have registered for unemployment over the past two months, with many more seeing large cuts to their paycheques. Given that so many have lost their jobs, or experienced cuts to their regular pay, mortgage lenders are now scrutinizing employment more than ever.
In a regular market, a lender will issue a mortgage commitment with nothing more than an application and credit bureau. It would then be conditional on employment documentation such as job letters and pay stubs, among other things, which can be supplied at a later date.
In today’s world, income documentation is required up front by most lenders. A lender may even contact your employer to verbally verify your employment prior to issuing the commitment. They may even make a second call to your employer prior to closing to ensure that your employment is still stable and that there are no cutbacks planned.
In other words, if you are not 100% confident in the stability of your employment and your income, then I would suggest holding off before purchasing. Speak to a mortgage professional about your situation and find out what your options are.
The Home Buying Process during COVID-19
The entire home buying process can now be done virtually… beginning to end. You can shop for a home, sign your offer, complete the mortgage approval process, sign with your lawyer and get your keys. All without having to walk out your front door. Video conferencing software such as Zoom makes this all possible.
Prior to the pandemic, the only part of this process that could be done virtually was the mortgage. 99% of the mortgages completed by my team are done without face to face meetings with our clients. While they are still available at our office in regular times, the vast majority love the convenience of going through the entire mortgage process from the comfort of their own home.
Completing the entire home buying process like this though? This part is new.
While many showings are being done virtually, many realtors are still offering in person showings to serious buyers. However, your realtor may first take you through several properties virtually, allowing you to narrow down your search prior to arranging the in-person visit.
Before any physical showing can take place, you will be required need to complete a health questionnaire. Be prepared to answer questions about whether or not you’ve experienced symptoms, recent travel, potential exposure to COVID-19 patients, etc.
If you are being shown a property in person, expect to wear a mask and gloves, and try to refrain from touching anything. Some sellers will leave the lights on, and closet doors open to minimize the need for touching.
Some condo buildings have eliminated physical showings altogether, or are only allowing showings by the listing agent or owner of the property. The exact protocol for showings can vary from realtor to realtor, seller to seller, and building to building (if shopping for a condo). Your realtor of choice will fill you in on exactly what you can expect with showings. If you do not yet have a realtor, we’d be happy to refer a great one to you.
In cases where a lender requires an appraisal on a property, which is commonplace, the appraiser is no longer required to enter the property. They rely on the seller, or listing agent to provide current, interior photos of the home or condo. Some appraisers may require the homeowner or listing agent to take them through the property via Zoom call. They will also drive by the property, and/or may even walk around the exterior of the home as well.
Arrange Your Mover Early
If you are planning a move, make sure you arrange your movers with plenty of time to spare. This is not something that you want to wait on, especially if you are moving into a condo building. Leaving this to the last minute could result in you having to move everything yourself.
Allow Extra Time
Everything can take a bit longer than it did in the past, so it’s a good idea to allow extra time for each step of the process. While purchasing a home could have been done in as little as ten business days in the past, some lenders are now requiring a minimum of fifteen. Even that is tight in today’s world. Allow yourself some extra time for each step of the process, so you can ensure everything runs smoothly.
The Window of Opportunity To Buy A Home
There are many who have been waiting on the sidelines for the past couple of months, watching the market and waiting for things to get better before starting their search for a home. The pent–up demand is large, and continues to build. Once it appears as though we are through the worst of the pandemic, people will come back into the market in droves. As the more and more businesses re-open, people still start to regain confidence, and the real estate market will be humming along once again.
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The Paul Meredith Team will be donating $250 to local food banks for every mortgage we fund from April 30-July 31st, 2020.
With well over one million Canadians now out of work, the food banks need our help more than ever.
For this period in 2019, we closed 93 mortgages, which would have meant a donation of $23,250! We want to exceed this number this year! Regardless of whether you are purchasing, refinancing, or have a mortgage coming up for renewal, all closed mortgages closed through the Paul Meredith Team will add to the total donated.
Paul Meredith is the author of the Amazon #1 best selling book, Beat the Bank
– How to Win The Mortgage Game in Canada, and has ranked as one of the top
75 mortgage brokers in Canada since 2016. He was a finalist for Mortgage
Broker of the Year in 2018, and can be seen as the exclusive mortgage broker on
season two of TV’s Top Million Dollar Agent.