Do you have questions about buying and selling real estate during COVID-19? We're certainly getting a lot of questions from clients and friends, not to mention colleagues across North America. Whether you're thinking about buying or selling a home in the near future, or you're just curious about what it's like for real estate agents in Edmonton, we've got your answers. Here are the most common questions we're hearing right now - ask your questions in the comments and we'll happily answer them.
How Motivated are Sellers to Accept a Lower Offer Due to COVID-19?It totally depends on the seller. There are a lot of people shopping for bargains and looking for desperate sellers right now, but sellers are generally reluctant to give up their hard-earned equity, and many will choose to keep a property rather than sell at a loss. Don't forget, many homeowners are able to defer their mortgage payments for up to 6 months right now. The number of new listings coming on the market right now is extremely low, and I'd say if you have your home on the market right now, you're probably serious about selling. Prices are already low (even before COVID-19 we were one of the most affordable markets in Canada) and the historically low-mortgage rates we're currently seeing mean you will pay less overall. Another thing to consider is the market value of the property you are interested in. If the seller has been aggressive with their price in the first place, we have seen a lot of multiple offer situations in the past few weeks, particularly in single-family homes priced between $300-$400k. So if you act quickly you may snag a really good opportunity before it disappears. However, my advice is unless it's the "ONE," don't sweat the small stuff, there will be another.
Do we have to wear masks to view homes?If you're viewing homes with one of our agents, we will ask that you wear a mask, our agent will wear a mask as well. Other brokerages may have different policies. For everyone's safety, we assume every property we view is contaminated, and everyone we meet is asymptomatic and we take precautions for the benefit of everyone involved. Many sellers have their own requirements you will need to follow. In general, before you view a home in person, you will be asked "the COVID questions" (do you have symptoms, have you travelled, etc.). You'll also be asked to sign additional forms (such as a hold harmless and/or COVID questionnaire). At the home you will be asked to leave your shoes outside the door or wear disposable booties, to use hand sanitizer and to maintain a physical distance of at least 2m (6') from the agent showing you the home. We will have asked the seller to sanitize all surfaces and handles in advance and to leave all interior doors open and all lights on (so we don’t need to touch anything when inside the home). A great suggestion from our agents is to keep your hands in your pockets and you'll be less inclined to touch anything. Our recent blog post outlines what to expect when buying a home during COVID-19.
Can we bring family members to showings?At this time, we are asking that a maximum of two clients attend a showing, to limit exposure. We also ask that you do not bring children to showings. However, in certain circumstances, we have been asked by people for exceptions including single parents. If the seller is willing and the buyer's agent is comfortable with these types of requests, we should be able to make them happen.
Can I attend the home inspection?That will depend on the seller's and the home inspector's wishes. In general, we are asking clients not to attend inspections, and with the seller's permission, our agent will remain outside the property during the inspection, reducing the risk of contamination.
Should I wait to buy until this is over?That is a decision only you can make, but here are some important points to consider:
- The inventory of homes on the market is relatively high, and the number of buyers looking is relatively low, so you will face less competition than in a typical spring market, and will likely be able to negotiate more favourable conditions, terms and price.
- Prices are already low (even before COVID-19 we were one of the most affordable markets in Canada)
- Mortgage rates are historically low making real estate even more affordable
- You will be asked more questions and will be asked to complete additional forms and there is added to viewing homes.
- Many sellers are limiting access to their properties, so you might not get to see the homes you want at the times you want.
- When will this be over? It seems as though the restrictions currently in place are going to be relaxed slowly, and we may be required to continue physical distancing for many months to come. How long can you wait?
- Talk to your agent about what you're looking for and they can tell you what is happening in that segment of the market. Ultimately, the right time to buy depends on your needs and desires and your financial situation more than on the market, as your home is more than just an investment.
- Reviewing properties with you online first and discussing which ones are worth visiting in person
- Doing virtual walkthrough showings with you "live" or sending you a recording
- Utilizing their knowledge of the area and product to let you know which sellers are serious and which are not.
Should I wait to sell until this is over?Much like buying, that is a decision only you can make. However, if you're uncomfortable with the idea of letting buyers come through your home, there is not much point in going on the market right now. Although homes occasionally sell sight unseen, it's very rare. If you had your home evaluated pre-COVID, expect a lower evaluation now, if you come on the market, you will have to be priced very well to sell. Talk to your agent about the market, they can help understand what to expect if you do list your home by looking at the absorption rate, competition, historical prices and trends for homes like yours. Don't get caught up on city assessment and when you review your evaluation, anything sold prior to March 12th, 2020 really doesn't compare.
What will the real estate market look like when this is over?No one knows the answer to this question, but I can see some likely scenarios. RBC says to expect a “tough but temporary blow” to the housing market, but also notes that “oil-producing regions are the most at risk due to the plunge in oil prices." They also expect the market will recover in stages, hopefully starting early this summer, and that next year will see a big rebound in sales - that makes a lot of sense to me. I expect there may be waves of activity, caused by external factors like mortgage rates, government policies and COVID-19 restrictions. Our entire world is going to look different when this is all over, but we will all still need a place to live.
Is it a good time for first-time buyers to buy a home?It could be a good time if you have saved up a downpayment, have a steady source of income, and know that you'll be happy living in a home you can afford now for at least five years. In Edmonton, even in slow markets, the entry-level price range is always the most active and we almost always see multiple offers on affordable homes with quality. Because of this, first-time buyers often have to compete with other buyers, and may have to act more quickly than they are comfortable with. We are currently seeing a lot less activity than normal, which puts buyers in the driver's seat when it comes to negotiating. With good affordability and low mortgage rates, a patient and cautious first-time buyer might find exactly what they're looking for in today's market.
Should I take my house off the market?This is definitely a question you should ask your agent, but in general, as I've already mentioned, if you're not allowing showings, you might as well come off the market. Only the best priced and most attractive homes are selling right now, if you're not getting any interest, and are not willing to undercut your competition, you should probably come off the market. Prices are affected by supply and demand, and we have lower demand than normal and slightly higher supply than normal, this is definitely not a time to "test the market."
Are houses selling right now?Yes, over 100 residential listings have sold each week in April in Edmonton thus far (it's looking like about 160 sales will be reported this week). While this is down significantly compared to previous years, we have seen activity on our website and inquiries on properties reach new highs. It is taking a bit longer to put deals together, but I do expect to see sales continue to increase in the coming weeks.
If we do list our home, what can I do to keep my family safe?First off, we can limit the need for many in-person showings by:
- Including 3D walkthroughs/virtual tours with our listings (and asking buyers to view them before confirming a showing)
- Creating a walkthrough video, where our agent films a walkthrough of the home, pointing out features that don't come through on photos
- Livestreaming a virtual open house where interested buyers can ask questions about the property
- Offering potential buyers virtual walkthroughs, where an agent walks through the property with the buyer on a video call