Assess Your Risk: Buying & Selling Toronto Real Estate During The COVID-19 Pandemic

COVID-19 & Toronto Real Estate, Real Estate

As I have always contended, success in real estate hinges succinctly on smart strategy; a shift in the market, in turn, requires a shift in strategy.

This is even more essential today, given the uncertainty and turbulence we currently face as the world navigates a health crisis. Just four weeks ago in Toronto, those who were on the hunt to purchase a home or were preparing to list their property for sale were proceeding under the assumption the process would be ‘business as usual’. However, with this unanticipated global disruption, the trade of real estate has been altered dramatically. Although the Toronto real estate industry has been deemed an essential service, the landscape by which business is being conducted is new uncharted territory. Business is being conducted within the limitations of social distancing measures, non-essential business closures and directions from every level of government pressing residents to stay-at-home (including the request you only grocery shop once a week).


Image courtesy of Hilltimes


So Who Is Highly Motivated To Move (At A Pressing Time Like This)?

It’s hard to press pause on a goal, especially if you’ve already invested a great deal of time and emotional energy in it, which is exactly what numerous Toronto house hunters have had to do recently. The Toronto real estate market has long been characterized by low supply and high demand, so until all our attention was directed to social distancing, it wasn’t uncommon for Buyers keen to secure property to have lost out on one or more bidding wars.

In fact, just prior to the pandemic the Toronto market was ramping up hard, looking a great deal like Spring 2017 prior to the provincial government’s Fair Housing Plan intervention. Low mortgage interest rates and the announcement of a relaxation of the mortgage stress test rules were propelling many buyers into the marketplace, which resulted in a wave of bidding wars. Here’s my February blog sharing some real-time examples of properties that sold substantially over asking, with pictures: Getting On The Bidding War Bandwagon.

Like many well-established realtors, we were guiding several clients who were preparing to list their residence imminently. Did you know spring is traditionally one of the most popular times to list? Here’s why Canadian real estate traditionally oscillates between a spring and autumn marketplace, in my post called The Seasons To Real Estate.

The traditional cycles of real estate, however, have been impacted for now. And it stands to reason that only those who remain highly motivated to either buy, sell or rent Toronto real estate market are actively engaged in the process.




What’s Your Motivation For Buying and Selling Right Now?

When it comes to motivation, the need to relocate during a pandemic is initially limited to a fairly small group of people.

There are those who, when the market was disrupted, were in the middle of transacting but it remains incomplete. Like those who recently sold their residence but haven’t found new digs. Or those who already bought but still need to sell the one they currently own. There are the people who are renting that already gave their landlord their notice to vacate (or the landlord served them an N12 Notice to end tenancy) leaving them on a quest to rent or buy. Plus there are the people navigating the challenges of relocating to Toronto and require either temporary or permanent accommodations.

Then there are those where other life circumstances require a sale or purchase by necessity and urgency. Some are joyful, like cohabitating with a new love after courting by long-distance, the birth or adoption of a child after years of effort to procreate, or winning the lottery after being laid off. And others suck, like being served with divorce papers from a liar and a cheat, completing probate mired in grief over the death of a loved one, or being side-swiped by an unexpected change in financial circumstances.

These situations are all needs – and they continue to occur every day with, or without – a pandemic. Which is why the trade of real estate is considered an essential service.




It’s Time To Press Pause If You Can

If you’re the type of goal-oriented person who gets enthusiastically swept up in the desire to move into new digs, you should put that want – which is not a need – on hold for the time being. Sure, there are a whole bunch of us binge-watching HGTV during self-isolation to stave off boredom, but now is not the time to let it cast its spell and give you a reason to sell or buy a new place for the purposes of reinvention, or a way to occupy your time. Instead, might I suggest you invest in a mini-makeover of your existing home? Here’s a recent post from my Dear Urbaneer Series called How Can I Feel More Comfortable At Home During Self-Isolation & COVID-19?

However, if the disruption has had a direct impact to the livelihood and income of your household, such that your employment status has changed and you’re concerned whether you can afford your expenses, including paying for the property you currently own, look into the new relief programs being offered. These include the opportunity to defer mortgage payments by several lenders, utility bill deferrals from the city, and various other incentives by different levels of government. Investigate the Canada Emergency Response Benefit (CERB), Canada Emergency Wage Subsidy, Indigenous Community Support Fund, Employment Insurance (EI), Provincial Employment Relief, in addition to extensions on Income Tax filing/payments or Student Loan and payments, increased federal benefits and a reduction in the withdrawal sum requirement for those with Registered Retirement Income Funds (RRIFs). This article in Moneysense called ‘Where To Find And Apply For COVID-19 Financial Relief” offers a good summary of what is currently available, but check often as the situation is fluid and ever-changing.

Also, while these turbulent times will bring an added layer of stress and uncertainty to everyone – if your income is at risk and all of your expenses are fixed – now is the time to assess your financial circumstances in earnest with a long-range view. While the residents in the City of Toronto – like most everyone else in Canada – has been cautioned to remain at home for the next 12 weeks – which is effectively freezing our economy and its real estate market as a whole – it seems feasible governments will have no option but to extend the requirements for multiple segments of the population to self-isolate for the next 18 months or so until everyone is tested or a vaccine is available for everyone. During this period, it’s realistic many households will reconcile a bitter pill they can’t sustain their pre-pandemic expenses for the time necessary until we collectively return to our ‘business as usual’ lives. Already, many property owners employed in industries hit hard by the pandemic (including travel, hotels & Airbnb; arts, entertainment & sports, plus retail, restaurants, bars & clubs plus any services which support them, etc) are vulnerable. If there is a possibility your situation could go from so-so to uh-oh, you may be doing yourself a service by selling your property now while real estate values remain stable.

Over the next 4 to 8 months – and for as long as the Canadian economy is frozen or in flux – I suspect we’ll see an increase in the number of properties being listed under duress. The greater the economic (and mental and emotional) tolls the pandemic fosters, including the chain reaction that occurs when one company declares bankruptcy forcing all its partners to do the same, the likelihood even more properties will come to market for sale. At some point, the media will spin the doom and gloom news documenting the economic hardships of the pandemic with such intensity it will, in turn, prompt Buyers to withdraw from the market in anticipation real estate values will experience even bigger drops in value. This will, in fact, exacerbate market conditions. It’s too premature to estimate how significant Toronto property values will be impacted, but under the best of circumstances, the better properties (in terms of size, condition, and location in the original City of Toronto) will suffer modest declines in value, while inferior properties – or those located in areas where there is a greater supply of properties listed – will experience significant price drops.

If you are buying or selling as a “need”, right now you need to adjust your expectations and understand the process of the trade of Toronto real estate is not fully operating on all its cylinders.




Sellers Take Note

Sellers: think about the time, energy and investment required to list your property for sale. As I outline in my pre-COVID-19 post How To Prepare Your Home For Sale, the process typically begins with purging your property of all the items which won’t be moving with you, organizing all the stuff which will, completing your seasonal maintenance checklist inside and out, attending to small repairs, upgrading value-added deficiencies or even tackling renovations. It’s also common to engage outside support, like a junk removal business, a handyman repair service, and a landscaping company when your objective is to garner top dollar.

Meanwhile, your realtor would also be completing their marketing and promotional material in advance of bringing your property to market, including hiring the floor plan measurer, a professional photographer, a home staging consultant, a graphic designer, a printing company, installing the ‘For Sale’ sign, engaging a home inspection firm or, if it’s a condominium, the Status Certificate from your building’s property manager.

Right now, all of these tasks by the seller and realtor are currently challenging or even impossible under the government’s mandated COVID-19 closure restrictions because of social distancing requirements and non-essential business closures. You might be purging to create space and a more pleasing home for sale, but most places aren’t accepting charitable donations. Many hardware stores are open for supplies, but given trades are not supposed to enter a dwelling, you need the appropriate skill set to complete any repairs or renovations yourself.

Although it’s possible you can tackle many of these preparations yourself, for the majority of us, the end result is not going to be to the same standard as what it otherwise would be pre-COVID-19. Plus, your realtor and their brokerage – like the majority in this industry – are operating with almost none of the resources available just weeks ago to turn out a high-quality sales and marketing campaign & due diligence package. Without a pre-sale home inspection report, or your condominium’s Status Certificate outlining the state of the corporation’s affairs, the ability for a buyer to properly and fully informed on the condition of your property is jeopardized. What used to be executed efficiently and effectively like clockwork is no longer possible because of government intervention, even though the trade of real estate has been deemed an essential service.

Realistically, sellers must anticipate it will take longer to sell their property, that List Low Holdback Strategies, Bully Offers, & Bidding Wars are less likely as the pool of active Buyers engaged in the market shrinks, that one must be prepared to negotiate, and that an Agreement of Purchase & Sale may include conditions for a longer period of time than was typical pre-COVID-19 so the Buyer and their lender can complete their due diligence.




Viewing Properties For Sale, Negotiations & Completing The Purchase

Obviously, Open Houses are no longer permitted at the moment. And many brokerages, including Bosley Real Estate Ltd., Brokerage whom we represent, has issued a request that only vacant properties can be viewed.

It’s important that Sellers and Buyers consider the risks associated with viewing a property listed for sale where household members are in residence, whether that be the owner or a tenant. Although there are serious restrictions around viewings now (which I will go into detail about below) Sellers must weigh the pros and cons of permitting prospective purchasers into their personal or investment property during this state of lockdown, potentially exposing themselves and their families to COVID-19. Brokerages are recommending Sellers should move out of their property in advance of bringing it to market, and anticipate that tenants may resist letting viewings proceed.

When viewings do occur, there is a fair bit of COVID-19 protocol both in the preparation of the residence for viewing (basically sterilized);  once inside, prospective Buyers cannot touch anything during a property visit, including doorknobs, cabinet handles, faucets, light switches or window coverings. There is also additional documentation for clients to sign, including Seller and Buyer Indemnity Forms, and a Health Disclosure Declaration that must be submitted by the Buyer’s realtor in advance of viewing a property for sale or rent that discloses the state of the Buyer’s health status. It will be increasingly common that Offers may be conditional on the Buyer viewing the property in person after securing it under contract.

In the past, some lenders and lawyers made it mandatory you meet in-person to sign all of the documents. However, this isn’t advisable or even feasible in the current climate, so ensure you have the option of electronic signing with the members of your professional circle. For offers, electronic signing had been common practice for realtors prior to COVID-19, which is a real boon in the current environment. Expectations around that part of documentation are largely the same. However, expect longer time periods for things like financing approvals, the completion of due diligence and all legal property documentation, as we adjust to the new workflow. Deposits were usually supplied within 24 hours of offer from the Buyer. However, even though banks are open, this timeline might prove challenging for Buyers.

Once a sale is negotiated, due diligence is complete, and it becomes a firm and binding contract, Sellers should anticipate the possibility of delays occurring on, or shortly before, the completion date. It is important you stay flexible and understand any obstacles are not intentional. For example, pre-closing inspections might have to be delayed if the Buyer or their relator is ill or in self-isolation because of exposure. Appraisals may be delayed too. And at the moment Toronto’s Building Department is closed so lawyers cannot fully complete the due diligence necessary to confirm the clear title. In fact, Agreement of Purchase & Sale frequently includes clauses that state the flexibility -and good faith – required by both parties to complete the sale.

While a Buyer in a firm and binding contract is legally bound to complete a purchase, given the financial uncertainty and widespread temporary unemployment, it’s possible that Buyers may not be able to close because they can’t secure the requisite insurance or they’ve spiralled under financial duress. The Buyer and Seller’s lawyers will need to resolve how this failure to complete the trade gets resolved, just as it has been done pre-COVID-19.

It’s important for all parties to remember that the situation is fluid, and that necessary offices and services may be open right now, but that situation could change – like Land Registry for example.

Also, how do you plan to move out or move in? Movers still fall under essential services, but that service is highly exposed- and could expose you as well. Furthermore, if you live in, or are purchasing a condominium, confirm whether the building is even allowing, or restricting, the use of the elevator, or having anyone other than residents and their guests enter the building.




From The Real Estate Trenches

Right now, the majority of properties are being sold sight unseen with video walk-throughs and electronic marketing material, with offers being submitted conditional on the buyer viewing it. To our surprise, while the number of listings and sales have dropped, most everything is still going into biddings wars (condos have jumped to $1250 per square foot!), which shows how much demand still outstrips supply.

March stats do show that the market has cooled, but the sentiment is that, once this crisis has passed, the market will be robust again, mostly due to the gap between supply and demand. Click here to read “Toronto Housing Market ‘Going To Take A HIt’ During COVID-19, But Experts Say It Won’t Last“. I believe this to be true, but I anticipate the market will adjust down in terms of volume and values before it recovers.

Real estate has always been considered cyclical, meaning that there is inevitably peaks and valleys in the market cycles. And as a realtor in his 28th year, I started my career after a Housing Bubble had burst, but had yet not recovered (In fact, I saw property values drop a total of 35% from their peak value in 1989 – and it wasn’t until 1995 that the market began its escalation up). This disruption will cool the market, but if your objective is to own your property for 5 to 10 years, and your financial status is not in jeopardy, then your focus right now is to remain healthy and stay home.

We are here to help!


** Addendum April 16th, 2020 –> Posthaste: Threat Of Coronavirus Outbreaks Could Continue Until 2024: Harvard Study **



If you are looking to learn more here is our post about improving your home life during COVID-19:

Dear Urbaneer: How Can I Feel More Comfortable At Home During Self-Isolation & COVID-19?

and if you’re renewing or arranging mortgage financing, here’s how

Canada’s Big Banks Are Responding To The COVID-19 Pandemic Panic.




May my team and I be your realtors of choice?

With decades of experience navigating the ever-changing Toronto real estate market, a commitment to promote the sale of properties like yours with interesting and relevant information, and the ability to guide Buyers with credible insights and well-informed guidance, we are here to help without pressure or hassle.

Please consider our services!


Thanks for reading!


-The Urbaneer Team

Steven Fudge, Sales Representative
& The Innovative Urbaneer Team
Bosley Real Estate Ltd., Brokerage – (416) 322-8000

– we’re here to earn your trust, then your business –


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*Love Canadian Housing? Check out Steve’s University Student Mentorship site called which focuses on architecture, landscape, design, products and real estate in Canada.


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