{"id":12627,"date":"2020-04-09T08:00:00","date_gmt":"2020-04-09T12:00:00","guid":{"rendered":"https:\/\/www.zolo.ca\/news\/?p=12627"},"modified":"2022-01-14T12:30:53","modified_gmt":"2022-01-14T17:30:53","slug":"buy-sell-home-strategies-covid-19","status":"publish","type":"post","link":"https:\/\/www.zolo.ca\/blog\/buy-sell-home-strategies-covid-19","title":{"rendered":"Ask RK: Strategies to Buy and Sell a Home in the Time of COVID-19"},"content":{"rendered":"\n

Self-isolation. Self-quarantine. Mandatory quarantine and #FlattenTheCurve. All terms dominating the news and views these days and with good reason. The COVID-19 pandemic threatened the health institutions put in place to protect us, and wreaked havoc on business and commercial ventures. Despite these difficulties, governments and citizens are trying to push forward \u2014 finding solutions even when things look a bit hopeless. But how does the slowdown look for home buying and selling?<\/span><\/p>\n\n\n\n

We\u2019ve dealt with economic slowdowns, all-out recessions and even pandemics, in the past, but never all three at the exact same time. This truly is an unprecedented time and the solutions required need to be dramatic and drastic. <\/span><\/p>\n\n\n\n

Richard Baldwin, professor of international economics at the Graduate Institute of International and Development Studies in Geneva, summed up the importance of continuing business aptly in a recently published <\/span>article<\/span><\/a> in the <\/span>Chicago Booth Review<\/span><\/i><\/a>. He compared the impact of the pandemic to the effect caused by a burned out bulb in a string of old Christmas lights. One goes down, the rest follows, and we are plunged in darkness until we can find a fix. <\/span><\/p>\n\n\n\n

Decades ago, that fix would\u2019ve required us to check each bulb, one-by-one in order to find and replace the culprit. This solution worked best because bulbs were expensive and labour was cheap. <\/span><\/p>\n\n\n\n

Today, the solution is to \u201ckeep the lights on,\u201d according to Baldwin.<\/span><\/p>\n\n\n\n

The economics professor writes, while the cost of financial stimulus may be expensive, the ability for this stimulus to minimize disruptions to workers and businesses will be \u201cworth it.\u201d <\/span><\/p>\n\n\n\n

From a real estate perspective, how can housing market professionals, buyers and sellers keep the lights on?<\/span><\/p>\n\n\n\n

Here are six tips that can be used by either the home buyer or the seller on how to buy and sell a home during the COVID-19 pandemic. <\/span><\/p>\n\n\n\n

Strategy 1: Get a Home Inspection<\/h2>\n\n\n\n

Pre-pandemic, it was typically the buyer who chose whether or not to pay for an independent home inspection. This is still the case, but, now, seller\u2019s should consider paying for this service \u2014 and then use it as part of your transparent selling strategy.<\/span><\/p>\n\n\n\n

\u201cThe more a seller can be open about the house and the process, the easier it will be to sell the property,\u201d explains Mark Weisleder, a 30-year veteran of real estate law and a senior partner with the law firm Real Estate Lawyers.ca LLP. An inspection report by an independent professional home inspector signals to the buyer that a professional has visually inspected the home and flagged any potential concerns. It\u2019s not about creating the image of a home without faults, but being transparent about potential faults, while highlighting the benefits of this particular property. <\/span><\/p>\n\n\n\n

Strategy 2: Pay For Accurate Measurements<\/h2>\n\n\n\n
\"accurate-square-footage-measurements-couple-looking-at-house-plans\"<\/a><\/figure>\n\n\n\n

<\/span>Whether it\u2019s a buyer looking for a home, or a tenant looking for the right unit to lease, the seller will need to find ways to provide visually engaging images of the property, as well as accurate information about room sizes and locations.\u00a0<\/span><\/p>\n\n\n\n

Weisleder suggests the seller set up video calls, where the prospective buyer or tenant are given a virtual tour of the property. <\/span><\/p>\n\n\n\n

Another option is to pay for a virtual tour. Prices start at $250, depending on the size of the home, and quite often include a short video as well as an interactive floor plan that offers still shots of the home. <\/span><\/p>\n\n\n\n

But sellers should go one step further and pay for accurate square footage measurements. <\/span><\/p>\n\n\n\n

In residential real estate in Canada, there are no rules or regulations when it comes to how room measurements are taken or recorded. For many listings, the size of rooms are approximate and, quite often, taken from the listing information from the last time the property was for sale. In new builds, measurements are often 7% to 12% greater, on average, than the actual square footage a buyer gets after they move-in, since builders are allowed to market units based on measurements from external wall to external wall. <\/span><\/p>\n\n\n\n

By paying a few hundred dollars, up front, you give potential buyers a far more accurate description of the property \u2014 and this goes a long way to helping people appreciate what is being offered for sale. \u201cVisual walk throughs using a tape measure [or professionally measured floor plans] enable buyers and tenants to figure out if couches fit and dining tables work,\u201d explains Weisleder \u2014 all questions would-be buyers would normally have answered during an open house or showing. <\/span><\/p>\n\n\n\n

Strategy 3: Offer a Home Warranty<\/h2>\n\n\n\n
\"Repair-man-fixing-pipes-in-a-home\"<\/a><\/figure>\n\n\n\n

<\/span>In the United States, most buyers will only purchase a home if a home warranty is included in the price. This way, if a major component or appliance breaks down, the buyer isn\u2019t stuck with a massively expensive repair bill.\u00a0<\/span><\/p>\n\n\n\n

Up until recently, it was virtually impossible to get this kind of home warranty protection in Canada, until FCT launched a product in late 2019 (pre-COVID-19 restrictions). <\/span><\/p>\n\n\n\n

WIth the purchase of the FCT home warranty a seller or buyer gets 18-months and up to $20,000 in warranty coverage for major household systems and components, including foundation, roof, heating and cooling. According to the FCT blog, the average claim payout for this coverage is just under $8,000. The cost of the coverage is roughly $350. <\/span><\/p>\n\n\n\n

\u201cIf sellers want to provide buyers peace of mind, they can purchase and offer this home warranty coverage as an inclusion in the purchase of the property,\u201d explains Weisleder. \u201cIt gives the buyer protection, particularly at a time when properties cannot be seen or thoroughly viewed.\u201d <\/span><\/p>\n\n\n\n

Strategy 4: Only Accept Closing Dates That Are 60 Days or Less<\/h2>\n\n\n\n

As we are all now very aware, a lot can change in a day, nevermind 30 or 60 days. To minimize potential when closing a deal, sellers and buyers should insist on a closing date that is less than 60 days from the date of agreement acceptance. <\/span><\/p>\n\n\n\n

\u201cYou don\u2019t want to have long closing dates,\u201d says Weisleder. \u201cIf a buyer can agree to a shorter closing date, it shows that they are serious about the transaction. Get them to provide a good deposit up front and you\u2019ve got a better chance of a deal closing without hiccups.\u201d<\/span><\/p>\n\n\n\n

Strategy 5: Use Clauses to Guarantee Social Distancing Without Disrupting the Deal<\/h2>\n\n\n\n
\"Covid<\/a><\/figure>\n\n\n\n

<\/span>One of the most significant requests made \u2014 and the most disruptive to business, as a whole \u2014 has been the need to be physically distant. (The original term was social distancing, but people took exception to this term, stating that socialization was important at a time like this but close physical proximity was not.)<\/span><\/p>\n\n\n\n

The idea is that we cannot transmit the virus through the community if we don\u2019t have contact with the community. As a result, we\u2019ve been asked not to gather in crowds (or even small groups); we are to stay two metres (about six feet) away from people and we are to limit non-essential travel. <\/span><\/p>\n\n\n\n

For buyers, this can create problems when trying to close on the purchase of a house. For instance, most offers require a buyer to provide a bank draft deposit. To get this draft you\u2019ll be required to spend hours in a bank line-up (six feet away from the person ahead of you and the person behind you) before you\u2019re able to see a teller in order to get a bank draft. <\/span><\/p>\n\n\n\n

For sellers, the problem can arise when they must sign contracts with their Realtor or hand over keys and sign forms with their legal representative. <\/span><\/p>\n\n\n\n

To limit the number of trips required and the number of people you see, consider adding very specific clauses to the agreement to purchase contract. <\/span><\/p>\n\n\n\n

To eliminate the need to go to a bank branch and to avoid having to show up and meet someone to give them money, keys or documents, add in the following clauses (all courtesy of Mark Weisleder, senior law partner at RealEstateLawyers.ca) : <\/span><\/p>\n\n\n\n

  • The Buyer shall pay the balance of the purchase price, subject to the usual adjustments by <\/span>wire transfer<\/b>.<\/span><\/li>
  • The parties acknowledge and agree that all closing documentation can be signed <\/span>electronically and forwarded by email or fax<\/b> in accordance with the Electronic Commerce Act, 2000, S.O.2000,c.17<\/span>
    \n<\/span> [Ontario based, see relevant Act for your province.]<\/span><\/li><\/ul>\n\n\n\n
    • The parties agree that the <\/span>keys to the property shall be left in a lockbox<\/b> at the property and the code to the same is to be provided to the Buyer\u2019s lawyer in escrow pending closing of this transaction.<\/span><\/li>
    • The parties herein acknowledge and agree that they are required to close this transaction notwithstanding any impacts of COVID-19, save and except the closing of the Land Registry Office(s) and all financial institutions. In the event the closing cannot occur due to a shutdown\/disruption of the Land Registry System and\/or banking system, then the closing date shall be automatically extended to the fifth (5th) business day following the date upon which said systems have returned to operational status and can clear funds accordingly.<\/span><\/li><\/ul>\n\n\n\n

      \u201cThe first three clauses eliminate the need for meeting in-person,\u201d explains Weisleder. <\/span><\/p>\n\n\n\n

      The fourth clause stipulates how to handle the deal should a delay with the legal part of the transaction, specifically the government registration system, goes down, explains Weisleder. If you don\u2019t add this clause and a delay does occur, the seller may not see their money on closing day; the buyer may not move-in on closing day, and, as a result, additional legal actions could be a result.  <\/span><\/p>\n\n\n\n

      One final clause a buyer or seller may want to consider is adding in a provision that should either party suddenly find themselves under mandatory quarantine, due to COVID-19, the deal with continue, but that both parties will agree to extending the closing date by 14 days. \u201cThis type of clause would protect the deal even if one or both parties find themselves sick and under mandatory quarantine, due to COVID-19 health requirements,\u201d explains Weisleder.<\/span><\/p>\n\n\n\n

      Strategy 6: Pay For Title Insurance<\/h2>\n\n\n\n

      Once the deal is struck and finalized and a price has been agreed to and a closing date solidified, it\u2019s time for the buyer to get a bit of assurance with the purchase of title insurance. (This coverage typically costs between $250 and $500 depending on the property.)<\/span><\/p>\n\n\n\n

      \u201cTitle insurance offers protection from potential problems that can arise from gaps,\u201d says Weisleder. For instance, if there is a delay in registering the transaction \u2014 either because the government offices are closed due to a national holiday or closed due to a health emergency \u2014 title insurance will cover any issues that may arise before the transaction is legally finalized. <\/span><\/p>\n\n\n\n

      Past examples of how title insurance has helped buyers avoid expensive problems include: <\/span><\/p>\n\n\n\n

      • Avoiding the cost of paying for a lien that\u2019s registered against the property (but has nothing to do with the new buyer); <\/span><\/li>
      • Paying for back taxes owed by the previous seller; <\/span><\/li>
      • Paying to remove names from the deed to the home of people no longer associated with the property\u2019<\/span><\/li>
      • …and the list goes on. <\/span><\/li><\/ul>\n\n\n\n

        For buyers and sellers, these six strategies should help protect you from unexpected costs, unfair dealings and, yet, still allow you to comply with health authority requests to prevent the transmission of COVID-19.<\/span><\/p>\n\n\n\n","protected":false},"excerpt":{"rendered":"

        A renowned economist recently suggested that the best way to treat COVID-19\u2019s economic impact is to “keep the lights on.” Here are six strategies buyers, sellers and Realtors can use to avoid problems when buying and selling a home during the COVID-19 pandemic
        \n\u00a0<\/p>\n","protected":false},"author":3,"featured_media":13107,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[47,48],"tags":[],"guide":[],"class_list":["post-12627","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buying","category-selling"],"acf":[],"zolo_excerpt":"","_links":{"self":[{"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/posts\/12627","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/comments?post=12627"}],"version-history":[{"count":11,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/posts\/12627\/revisions"}],"predecessor-version":[{"id":20179,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/posts\/12627\/revisions\/20179"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/media\/13107"}],"wp:attachment":[{"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/media?parent=12627"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/categories?post=12627"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/tags?post=12627"},{"taxonomy":"guide","embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/guide?post=12627"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}