Ask An Agent: How is COVID-19 Impacting Toronto’s Real Estate Industry?
With the world on pause right now amid the COVID-19 pandemic, realtors are adjusting to a new reality just like the rest of us. But amid all this, Bosley Real Estate Ltd. broker Davelle Morrison is confident she’ll still be able to make a go of it.
“This will blow over. I’d say a month from now, things will probably go back to normal. It’s really just waiting out the month – I think – before things can go back to some kind of normalcy,” she asserts.
But for now, things are decidedly not normal, so we asked her the question currently on every GTA realtor’s mind.
How is Toronto’s real estate industry being impacted by COVID-19?
I think it’s a very scary time because we really don’t know what’s going to happen. I just listed a condo on Monday, and on Monday bookings for were hot and heavy. But on Tuesday, with the announcement that Ontario was under a state of emergency, I’ve definitely noticed a huge decline with nobody calling for showings. I worry for my seller. I do know that on Monday night a number of properties took offers and did still have a lot of people offering, but I think that was before this big “State of Emergency” news came out. People were still offering last night, but I feel like today was a different day.
I think it’s a scary time to be a landlord as well because they’re talking about renters not being able to pay their rent, and what does that mean for landlords who have mortgage payments to pay? Some banks are allowing them to skip their mortgage payments and some banks aren’t.
I just think it’s a scary time all around for everybody.
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In response to the crisis, I’ve definitely seen agents who say, “You can see the condo after you’ve made a conditional offer on the condo.” I think the average buyer is not really going to be comfortable doing that. An investor would do that, but a buyer wants to see, touch and feel the space. What I’m doing is providing a floor plan for my listings as well as a video, so people can actually see what the property looks like. I had someone contact me yesterday from realtor.ca. They’d seen the listing, wanted more information, and perhaps wanted to go and see the property. Instead, what I thought I’d do is qualify them first. I did so by letting them know more information about the place: I gave them the floor plan, I showed them the video and I told them what the expected price point was going to be and after I gave them all that info they said, “Thanks very much. This isn’t going to work for me.”
Changes to the industry as a result of COVID-19 will be qualifying buyers more, asking more questions, giving more information upfront so buyers can make more educated decisions as to if they actually need to see a property or not. Other than that, I’ve said no to any more open houses; I don’t want to have many people walking around a property together. I’ve said no double bookings, so when people are shown the property I really want them to be able to breathe their air as opposed to trying to share that space with other people.
Also, the property I happen to have listed is also vacant, which I think makes a difference. If you have somebody living in the space, it makes it a little bit harder to show it or list it right now because there’s so much concern about germs and contamination. When a property is vacant, I don’t think you have as much of a concern, but when people live there, there’s a bit of a concern for sure. We’ve also put hand sanitizer in the kitchen of properties we’re showing and we’ve tied it with a rope to one of the drawer handles to make sure no one takes off with it. We’re also going to be requesting a 30-day close because we want to make sure somebody’s going to be able to close quickly — we simply don’t know what the hell’s going to happen right now. If something (God forbid) happens to banks and lawyers, we need to make sure our clients are protected.
Asking for a 30-day close and also asking for an additional deposit are some of the other changes. Normally, we would say we want 5% down as a deposit and now we’re saying a deposit of 8%, just to really show that the buyer has skin in the game and to make sure they won’t walk away. I’ve heard rumours of appraisers not willing to go out and appraise properties right now, so that poses a problem with banks and getting mortgages. Banks will either have to take your word for it or wait until appraisers are willing to go back to work.
The other challenge right now is that the landlord/tenant board is closed. For agents who have sold properties right now and have had to deliver an N12 for the tenant to vacate because the buyer is going to move in themselves, all of the sudden, there’s nowhere to go. You can’t file that N12 anywhere and if the tenant wants to contest it, there’s nowhere to contest it. Basically, because the tenant is in there, they’re going to win. They are going to get the extra time, so closing dates are going to have to get pushed back. There’s no governing body left to police any of these things.
If you’re a renter right now and you’re out looking for a place to rent — maybe you work in the hospitality industry — how are you going to come up with first and last month’s rent? How is your new landlord going to buy into the fact that you can rent from them if you’re working in an industry that’s been severely impacted by COVID-19? And really, what industry hasn’t been?
It’s just such a crazy time right now.
You can catch Davelle Morrison on The Agenda with Steve Paikin discussing Airbnb’s contribution to Toronto’s housing crunch on Wednesday March 18, 2020 at 8 and 11 p.m. on TVO.