5 Questions: Realtor advice for homebuyers
In this post, the first of two parts, we asked a Toronto realtor, Anne Marie Lorusso of Freeman Real Estate Ltd., five questions about her perspective on buying a home in a market affected by COVID-19.
Q1: What has your experience with the real estate market in Toronto been like in the last few months?
It has been busier lately than ever before. “Bidding days,” where prospective buyers are asked to hold their offer until a specified date, have continued to be a practice as there is no shortage of buyers. Those who are anticipating a drop in home prices due to COVID-19 have been disappointed so far, at least in Toronto.
By and large, people are buying and selling homes for the same reasons they always did: upsizing or downsizing as family needs change, job changes, retirement, etc. Still others are taking advantage of the current low interest rates to purchase a cottage or a second home as an investment property.
There have been some interesting developments due to COVID-19. More than one couple who cancelled a wedding has put the money toward a house instead. Some buyers are also moving away from the recent trend of open concept homes to seek out properties with more separated spaces as they anticipate having both partners working from home for quite some time to come. As working from home becomes a more established practice, people who had been renting in the city to have a shorter commute are now open to moving further out of downtown for a property they can afford.
Q2: Has 2020 presented many surprises for those buying a home?
Showing houses to prospective buyers is certainly a different experience. The use of face masks and hand sanitizer are required at every home, and appointments are strictly limited to 15 to 30 minutes. In some cases, a virtual open house is the only option. With showings limited to one at a time, sometimes they are completely maxed out, leading to sales from buyers who have not seen the home in person. A few condo buildings prohibited visits from realtors entirely, leading to sales in a completely virtual environment.
Digital signatures have been adopted and are probably here to stay, making transactions move faster than expected. However, the process to qualify for a mortgage has been taking longer, and it often involves more paperwork. For self-employed buyers using their two-year average income to qualify, in some cases, adjusted income forecasts have been used in light of the effects of COVID-19.
Q3: What are some of the most common questions you’re getting from would-be homeowners?
Buyers who have lost out on competitive bids ask if they can make an offer without a financing condition. This is risky for everyone, but especially for those who haven’t obtained pre-approval for a mortgage. This summer, many buyers also asked if the market would cool down after the school year was underway, but that doesn’t seem to have been the case so far.
However, one of the most common questions has been from those who have been laid off or seen a reduction in income. They wonder if they will be able to qualify for a mortgage at all. In these cases, I advise prospective buyers to speak with a mortgage broker to identify the best solution based on their individual circumstances.
Q4: What can home buyers expect as they begin their journey to purchase a home?
The volume of paperwork required for mortgages is increasing, and so is the timeline to qualify for financing. Hence, it’s a good idea to start working with a mortgage broker well in advance of putting in an offer on a home. I’d recommend at least four weeks to avoid being disappointed if you find the home you love, but are unable to make an offer. Your realtor can help you understand the home buying process and gain a firm understanding of your wants and needs.
In addition to finding a trusted realtor and mortgage broker to serve as your advisors in the homebuying process, it is a good idea to identify a lawyer (notary in Quebec), home inspector and a contractor, if necessary, to call on when you are ready to make an offer. There will often be many prospective buyers who love a home as much as you do, and there is still a lot of competition for homes, even in the time of COVID-19. It’s as important as it ever was to be ready when buying a home.
Q5: What advice would you give to someone planning to buy a home within the next year?
Make sure your realtor has you set up for automatic notification of new listings based on your desired criteria. You can avoid the rush for desirable properties by going to see them on weekdays, rather than putting it off until Saturday or Sunday. Along with ensuring your financing is in place and you are ready to go with an offer when you find a home you love, these steps can help prepare you for buying a home in an active market.
But the most important thing for homebuyers to have when shopping for a home is patience. From downtown Toronto all the way up to cottage country, the real estate market is competitive, but your realtor is on your side to help!
Many thanks to Anne Marie for taking the time to answer our questions! For more information, visit our recent blog post: How to reduce stress when purchasing a home.
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