I was recently asked to present to a group of realtors and mortgage brokers on the latest trends and developments in real estate and real estate law. As I took time to reflect, I realized that the majority of developments and trends that have impacted real estate closings over the last year revolve around Covid-19.
The pandemic has created some unique challenges and opportunities for real estate lawyers and our clients. Below are some key points to keep in mind when selling or purchasing a home in the current market, which I hope will be helpful!:
- Interest rates are at an all time low as the central bank has reacted to the pandemic accordingly. This coupled with ongoing supply issues has created a sellers market unlike one we have seen before. With interest rates so low, banks have seen an unprecedented volume of mortgage and refinance applications. As a result, we have seen some banks, who are already dealing with understaffing, being unable to process mortgages on short notice. We highly recommend that clients start their mortgage approval process early and well in advance of their closing date to avoid closing delays. The days of quick closings or rush closings are gone!
- Bidding wars are inevitable. On numerous occasions at Accord Law, we have seen purchasers submitting offers, often on multiple properties, and then getting cold feet and failing to provide a deposit after the offer has been accepted. In order to protect sellers, we always recommend sellers obtain a substantial deposit upwards of 5% of the purchase price. Purchasers must understand that once an offer is fully executed and firm, not providing a deposit does not relieve them of their contractual obligations and they will still be held liable. There is no “cooling off period” for residential resale real estate!
- Due to the circumstances involved in multiple offer situations, purchasers and sellers are being placed in positions where they have to make consequential decisions quickly and often without legal advice. We suggest making sure that you are represented by a Realtor, who has a team of professionals including lawyers, mortgage brokers, and inspectors at their disposal, so you can seek timely advice during these critical moments.
- Due to health and safety concerns, the Law Society has allowed law firms to verify our clients’ identity virtually, through video calls. This change has allowed our office to act for clients throughout the Province, and our client’s outside of the GTA no longer have concerns of having to travel to our office prior to closing. For your convenience and safety, Accord Law is fully equipped to close deals remotely through video conferencing, and our team is available to assist you every step of the way!
Angat Saini, J.D., LL.B.
Owner, Barrister & Solicitor
Accord Law Professional Corporation
1457 McCowan Road, Suite 209
Toronto, ON M1S 5K7