Should you sell or buy a home during COVID-19? What are investors doing right now? Are there delays with Mortgage lenders? These are all great questions which we will cover in the video below.
For full disclosure, Aditya and I we're trying to do a joint video live, but we had technical difficulties and he is on the video but I am on the phone.
Video located at the end of the article.
Windsor Ontario Market Update - Post COVID-19 and Investor Tips
Below is the transcript of the whole conversation... enjoy.
Do you see me live on Facebook now?
Okay, I think now it's live.
Sorry. I know there is a lot of technical disturbances here.
I was trying to add Scott who is a mortgage broker and proud owner of a LendCity Mortgages also the owner of a Canadian Real Estate Network and investor from the last 10 years.
So I would like him to join on the call, unfortunately.
Facebook doesn't allow me to add another person.
So I have him on the phone.
He can answer questions and he will be talking so we will be sharing the market updates just stay tuned with us. Bear with us on this technology side. Hey, Scott, can you hear me?
Yes, everyone. Can you guys here Scott?
Please let me know in the comment below so I know if you guys can hear.
Hey, birth. Hey Clark. How are you guys?
Can you guys here Scott?
Yes, yes. Perfect.
Awesome. Welcome, Scott. Thank you for your time.
Yeah, perfect guys have your questions ready for Scott in the meanwhile, I'll go over basic Market updates right now and then Scott can jump in and give us all the nuggets.
Awesome. Hey Clark.
Awesome. Thank you, guys.
So I was it was surprising to see The Stance because you know, there is a lot of fun Senate uncertainty going on in the market.
But even though still the real estate market holds strong, I was surprised to see because the numbers so basically I was looking at the black the total number of sales happened in March of 2020 and March 2019.
It surprised me to see they're pretty much the same in 2019.
The number of sales was 429.
And again 2020 is 427.
So it's interesting to see that number because again, it could be the sales that pretty much, you know tied up from February.
They could be closed in March and also I was looking at the average sale price surprisingly.
There is a 6.2 percent drop competitive to last month.
So last month the average price was 309 in February and March's average sale price is was 290,000.
So there is a drop of 6.2 something in the price average.
Average property prices, so it's interesting to see what's going to happen in April.
The number of Corona cases in Canada.
Still increasing day by day.
I say I was looking at a graph on Google So currently we have new cases like today alone is 2008 2018 so which is a lot higher like every day the cases are going up.
And it's curious.
I'm even am curious to see what's going to happen in the market in real estate. But right now there is a drop but not significant again. I would take on Scott. What's your take on that?
Yesterday there were like eight offers on this property.
Yes, so it's still different going but I think people are being cautious in there were wanting to see what's going to happen with everything and it's slower for sure.
Yeah, and you know, especially these are the times where we need to ever be aware of you know, what are the options that are available for us.
So one of the options that for many investors are you know many employees who got affected due to Corona right now.
Canada is providing emergency fun.
Like if you got affected by COVID, you know, if you have lost your job or you know, if you are self-employed if your income stopped coming in then Canadian emergency response benefit is something that you can look into it.
There are basic eligibility is that you need to be received in Canada and you have to be at least 15 years old and You should have worked in 2019.
You know, you should have phoned at least 5,000 you will be qualified for two thousand dollars for every four weeks.
So which will which is a good amount especially if you got affected you. So neither, would you have your job now the wood you're making money, but just in case it's you know, if it affected you you can look into this program and if you guys have any questions regarding you know, anything that's going on right now? I'll leave the comments below. We will be answering at the end and there are other programs for self-employed and business probably I would let Scott jump on that because he is an expert who deals with that a lot more than me.
The government has lowered the Criterion for that. So you needed to make work payout or a unique impaled at least 50,000 of wages last year to grow by Prentice $40,000 long now you've We needed to pay out 20,000. So they just this week nor that criteria.
So with this loan interest-free for a couple of years, 10,000 is forgivable. If you pay the whole balance in full before the regular due date, so it's a cool loan and then something that you know, I'm looking at starting on the 26th, the employee wage subsidy learning. So if you do pay salaries the government will pay up to 75% of the salaries up to a certain limit as well as the retroactive middle of March. So there are lots of different benefits. But if you check out that link, it will show you everything for everybody and then kind of see what is the most you know applicable to you and apply for whatever benefits you can receive.
Yeah, that's, you know, very good program, especially first for those small businesses and you know sell some Why people like us who got affected by this COVID?
And you know, what are the mortgage options? What's going on with the mortgages?
What do you think an investor should be doing in these situations like now?
Mortgage payments up to six months.
Now what happened to the interest builds up in the attic to the principle of your mortgage. So you do end up paying it back and you do pay interest on the interest, but for investors, we're not certain if the tenants are going to be able to pay the rent or not.
So if they're not you were protecting yourself out of touring mortgage now if you're 10, End up paying the rent you have an option before the lender and this interest to your principal to pay it over those six months like the accrued interest they let you pay it upfront as well.
So if you're having to pay good, what do you suggest differing jesting unless you have a large emergency fund writing, you know, you can carry yourself through it, but otherwise, yeah, I will defer you can use the funds even if it Ends are paying rent. You can cleanse for other Investments.
Yep, and invest.
The interest is tax-deductible.
So yeah, so that's a pretty cool option for and I'm going for it because you know, as you said it helps us to float through this uncertain situation because even if the tenants are paying now has you said like it's great just to have that additional, you know saved up money for a rainy day.
Yeah, and you know what's going on with the periods with this mod gauge because you know right now I have some buyers who are making offers but they're asking me what would be the best timeline. Like how many days do I need to get the approvals or if I want to do a refinance? How many days does it take to get the refinance done?
The lenders like finding the big banks have a bit of a full-service spot, but it could alternatively under or credit unions different things like that and finding their way through it's taking longer to get it from them and you know enquired why and he said, you know what our main focus our current and existing customers and we're trying to help them with everything that we can do and then our second goal to apply the new ones so that's why I think you're going to see us. Slower response rate because they're trying to service their inclined to Members First.
So yeah, I'm thinking honestly expect read it to 10 days before you get a response from the lender and then as far as the quilting dates The Riddles things like if you do a 30 day closing it should be pretty who's with a ton of we do have to work on getting an appraisal in certain scenarios and they're coming creative like sometimes they're doing drive-bys and we're doing FaceTime who just seller two groups.
Later, they're doing different things too.
But yeah, there's a standard 30-day closing like that's a pretty good thing and now even that not looking at the property thoroughly. So that means you're getting your appraisal values or compared to looking them looking at the property in person and it works either way, but did you see any effect in the appraisal values coming? At the coming in from the appraisers is the reserve.
Not yet, but I perceived that there will be and it's hard to predict because they want to cover, you know, they want to protect themselves as well. So they're not going to prove this isn't a stretch.
They're not going to stretch anymore. They're going to give it value so I can see it affecting values in the market is truly affected.
You're going to start to see the appraisal that came down.
We have a question from Perth.
If the property is having tenants. Can we have taken the first time home buyer Advantage?
Do we need to have money in our as a piece?
Probably I think you can look at the comments Scott.
So you're going to have to work on getting done and then the home buyer Advantage?
So yes, you can redeem from or if you want to but you don't have to.
Yeah, that's a really good question. Because now the situation is you cannot evict the tenants.
So if the property has a tenant and if you want to move in have you came across that kind of situation at all, negotiate and find somewhere to go.
But yeah the wise yeah, it's a tricky situation right now.
I think so regarding using Dara's pace is that something could affect it or we can use the RRSP anyways, right for the first-time homebuyer.
Find five years a year. You could use that program again.
Yeah, that's good to know and another question from Phillips.
This is something interesting even I don't know actually if we have rental income. So do you have personal income Phillips like where you used to make personal income? And is your income stopped?
And Scott, what's your take on that?
I even don't know. What's that situation would be yes.
You know, I don't think any of us here can answer that. I am looking on the website here and it was to qualify.
It's available some workers who meet the following conditions, so it doesn't speak about if you have rental income or not.
But dating is available to workers who live in Canada and are at least 15 years old.
You stopped working because of COVID-19 and are illegible for EI or the regular sick day you Have not voluntarily put your job and you need at least 5,000 in 2019 for income rental income out there. So I'm Into a student from their criteria on their website that you can still get this even if you have a rental income because their wording is about having a job, but this is something that we probably can't answer for you get about to contact the government something.
Yeah, so Philip says that his wife lost her job. So that means she would qualify for it if she lost because of the COVID Yep, and Perth.
Yes, you understand it, correct. So especially if you're buying it as a first-time homebuyer, if you want to take advantage of our recipes 5% down and the insurer wants to see that property is vacant, you know, you have to put that in the offer they have to verify that.
I'm just you're suggesting that investors still defer their mortgage payments, even if their tenants are paying yes hundred percent. That's what Scott is suggesting because and I also such as the same thing because even if your tenants are paying to defer your mortgage payments for six months and you know after six months thank God if everything goes well if the tenants, you know, The rent and you have the money sitting in your account, you can pay back the Deferred payments after six months or whenever you feel like you're safe to pay back within your term. I think you will not you don't have to pay any interest over interest. Is that correct Scott?
No business could affect even more jobs as time goes on.
So Mike things to think proactively and it just does it and Bank the funds up the side and if there's if they're not leaving the ranch that I have that at murdered before that if they do that I pay interest so that's my hold on that now David is a messaging do we think thankful for more than 20% down payment on rentals going forward so Even some of the lenders have lowered the load values that they do and they're not 75% you but not own them so I can bring it down. We're thinking a liquidity issue in the market was should be reduced because the Bank of Canada announced that they're going to the bank and if Russia which away who I think that liquidity concern is going late, but they offer some of them are being Tighter and increasing the down team at needed but I think the standard is 20 so I do You're going to be a bunch of letters still at 20 and you're going to see some lenders that are higher than 20. So it just depends on the size of your portfolio and puking Rapids blenders that have 20% down or working here.
And I don't another question from my side for you Scott for student rentals.
Is there any lender still doing 20% down?
the attractive property they want to find so what they're telling us is to hold up on the applications until we figure out what's going on or in Look slows down with their responses from their existing clients.
So they are still doing 20 percent down on the student rentals, but now they're telling us don't know Google occasions.
This is the Wonders that are offering 20. We still have a whole bunch that'll do 25% down and higher with course that we could submit to you today that the lenders that do the 20% down there actually on purpose to pop these right now.
And another common question that I want to ask answer for the audience here many of them asked been asking me you know, what do you think about the market is the good time to buy now or wait for another few weeks or months?
That's you know, I want to give my opinion Scott and I wanna you know take yours as well.
Here's what I feel right now.
It's so uncertain.
No one knows what's happening.
So basically based on that COVID case is that we are seeing in Canada still they're planning to extend the lockdown for another few weeks.
And also the COVID case is going up which means the chances for extending the lockdown are for longer periods our high and which in turn will go forward in the next few. Two weeks you will get prices going down for sure.
But again, it's assuming that the lockdown continues to happen.
But there is a drop now.
So again, if you want to buy now, definitely it's a good time and if you want to wait and waiting is unsure.
Yes, it could go in a positive way that you can buy better for better prices.
But if the COVID, you know turn Back and you know if the government comes up with a solution and now people start to work back again, and the prices can rebound very quickly because the market is still holding stronger and that's what my opinion is. So it's always good to look and if you find something that makes meets your criteria go for it if you want to wait for the perfect time. I don't know if it's the if there is perfect timing so That's my opinion. And I love to hear your opinions caught on that.
Yes, so I've seen lots of clients that are investments right? Mainly speaking about Investors here that armour says to be buying right now because your thought and their mental mindset of protest is that the investors that are selling right now.
Are more than likely trying to get out of the market now that might not always be true in every scenario. It could have been an announcer that was going to naturally. So anyway, right and most investors. They're finding they're getting some really good deals.
So I think if you were to buy a home from a regular verb finding I don't think you would get a great deal, but I think if you were to buy a house from an investor, they're trying to extend this is their exit strategy and I think the rules specific properties You can get some really good deals on and that's what I've been hearing from.
My clients are that their front four previous investors. It's that's the jackpot.
So for Investments Elway now may not be the best plan not necessary that it's about today, right? It depends on what you're doing with your portfolio investor. That's fine. I think the swamp along the chain.
Yeah. I agree with a hundred percent and for selling your right. Right.
That's what I feel to it. If you like desperately need money.
Other than that, it's good to hold for a few weeks until saying how this will turn for a better, you know for a better price on your property because the market is was super-strong just before this COVID and even now it's still strong, but there is you know a lot fewer buyers.
To a few weeks ago.
We have another question from Perth.
What's the seller's mindset right now? And what kind of sellers investors are homeowners?
That's an interesting question.
Probably I'll take on it and I want to hear your thoughts as well Scott.
I'm seeing two different types of sellers one of the investors who have been. Of properties they want to liquidate a couple of them just to you know, if things go in a downturn even further worse now they can buy so that's what they want to liquidate now rather than waiting for longer and some of them are homeowners, you know who's been living the in the property for a while.
She loved them. If they're in a situation where they cannot survive because if they lost let's They have a very good income and they have the purchase a nice property like 500 600 thousand.
Now if either they lost their job or they're afraid that they might lose their job if they lose the like $202,000 is not enough for them to you know to float or maybe they're not confident that even the six months deferral is not enough for them to you know, find the property a find a job.
So it's kind of different.
What type of investors that's a great question different type of sellers that are looking to sell.
Yeah. I love to hear your thoughts on that Scott that something interesting question.
In all fairness. I mean you probably see more of a seller's minds and be what I see is we just do you know the more dirty so we're not seeing that process behind should I list the should I know rest but I do know that there is fear from all the sellers.
They don't want to get COVID-19 right? They do ya want So from that standpoint, I actually will get asked you about how you're protecting for your listings and things and what you're doing to protect against them. But I think yes, so I think the people that do want to sell that are selling right now.
I believe in my mind that there is motivation and they are active because most people do not want to send to the house. They don't want somebody coming in here who has COVID-19. 19 right and you get really because peeps some people are just carriers you don't know so I think that the people are selling do want to move either again homeowners are best is but there's a need to sell that property if it's for sale right now. So this is why you think it's a great buying opportunity.
Yeah, that's a great point and you know that brings us to another point that I want to mention especially if you're thinking of selling right at this is the point.
A time where you have to look at your finances.
Hey, can I do is it necessary for me to sell at this point?
Because you know, we're all in together with this uncertain time because of the virus so that can only stop you know, if we all are responsible for it.
So if if you're selling it for no reason and if you're letting different people come into your property, And that will have chances for spreading the corona so until unless if it's a must avoid selling or going into properties walking in just like how we used to do before but now the technology is helping heavily.
Thank God. My brokerage is like a cloud brokerage now, we have the technology for everything so pretty much even like for sellers or buyers what I'm doing, right? Now is mostly trying to do it virtually.
So showings virtual listings doing a virtual tour of the property and trying to minimize the buyers to walk into the property as much as possible.
Even if needed we are just asking to write offers first before letting you know the buyer to see the property, you know we to avoid The spread of Corona has much as possible.
If I'm and it's already 7:45, I know it's more than what we thought Scott probably will give another minute or two for the audience to ask if they have any more questions or if you want to you know, share any other things that you think the audience would benefit out of it.
Feel free to Scott.
You're not allowing access to the property and Lester's assign an accepted offer.
And then at that point, you're allowing the showings. Are there any tips or anything that you would have for a seller in addition to those precautions?
Yeah, definitely. So one thing is like right now. We are too using technology as much as possible.
So first thing if you are listing a property for sure one we going to get a virtual tour video tour.
And best photos as much as possible, if it's owner-occupied if it's tenanted if the tenants allow and if the photographer is comfortable to go in we will get virtual, you know photos and videos and everything that a buyer can see from the home. So that's the first option always and then, you know, we'll have either of a presentation or will other buyers to make an offer.
But if the buyer is not comfortable if it's a must if the if they are serious then we have a forum to get their information to you know to get a declaration from the buyers and the Agents to make sure that they haven't they don't have any symptoms make sure they don't have any, you know, anything going with them any symptoms that can you know, stop spreading so we are screening it.
The buyer gets into the property again trying to minimize as much as possible.
If you're doing that probably the chances are not lesser compared to you know, doing multiple showings and also no more open houses. So no open houses at all, but we are doing a virtual open house.
We started doing virtual open houses a year ago so that now most of them are doing that so which is pretty cool.
Looks like we have a bunch of questions.
Maybe if you want to jump on.
The appraisals they're doing drive-by Scarface times.
So that can be brutal for the home inspection. What am I do or what? I might suggest is have to sell our complete home inspection and then gives it out to the buyers.
So then you're not having multiple Home Inspections done on the property if it doesn't proceed and then the way you know, there are fewer people into the problem. So I think that's why would do with the Home Inspections so for Michaels, Here that the southerners knowing how buyers come through do we think they'll be an influx of listings with COVID eyes down. And if so, do you think the prices to drop I do think there's going to be an influx of listings and there's going to be an influx of Irish because I know the whole bunch of buyers are waiting and I know people are waiting to sell to because they don't want us to shelter and COVID-19.
So I think the market this is my opinion only but I think the market will kind of get back up pretty much Rachel where it was before this happened.
In no time flat once it's all done. Yeah, and also I will add another thing to it.
There were so many buyers waiting on the sidelines or waiting because they couldn't get a property under contract because of just a few weeks ago. There were like 15 16 20 offers on one property. That means there are many buyers. They couldn't get their hands on the property. So now if the listings go up, that means the buyers are ready to buy.
Yeah, that's an interesting thing to see how it will turn.
and then I think the advice to give to clients looking to buy or sell drugs and directly.
So we advise them to wait or get into the market sooner angel from Canyon.
I think it depends on your buyer and what they need or your seller because some people still need to move right we could be living in a house that the landlord was is moving into there could be things wrong with the place and you want to move to different ones. So there are circumstances that require you to move in the cell right now if its Financial from the Standpoint do it now, like don't wait, but if there's no immediate rush on your mobile quite a few Realtors who are getting there by a rep signed and then they're delaying them like extending them for when this is all done so you can get out there and start buying selling Yeah, it's you're right Scott. It's, you know, you have to ask yourself first up.
What's my necessity? You know, how How badly do I need to sell or buy and if you are buying probably has caught mention we can mitigate getting into the property as much as possible.
Maybe just make offers conditional offers. Once it's accepted than even like you don't have to go and see you can look at all the virtual tours and then let the inspector do and inspectors especially because they are professionals.
They just protect themselves with all their equipment and they go do in and do the inspection and if the sellers Give us an inspector report then that's even awesome.
So yeah, definitely ask yourself first.
If it's most then do it with precautions and work with the right agent, you know if you're not in Windsor probably find the right one who is tech-heavy at this point for buying and selling both you need a techie guy who can understand the technology. Well, who can utilize it because at this point these are the times where we have to Avoid are trying to minimize the showing a person in-person showings as much as possible even for signing the documents or doing anything?
It's good to minimize the in-person meetings as much as possible.
Yep, Scott, I think there is one last question. We'll take that and we'll sign off. I know you gave me more than what I asked for. So thank you so much Port was asking do you still see the bidding wars in Windsor?
Oh, yes. There are still bidding. What's going on?
I was working on a property to make an offer for one of my buyers yesterday again death. Lee lot lesser compared to previous and compared to last month now, they're not getting the price that what they're expecting but still the bidding was going on depending on the property depending on how they listed the price.
So especially if they listed like 80,000 or 100,000 below market value then of up there are bidding wars going on. But if the Listed for market value then, you know the bidding was there of several hours are a lot less or you know, maybe they do not even offer.
So that's my take on it.
Yeah, guys. Thank you so much for helping on and thank you so much for all your questions and all your time because even I learned a lot from Scott Scott. Thank you so much for your time.
Can you put your information where people can reach out to how people can reach out to you?
Yeah, guys, especially at these, are the times where you will have to be closely in touch with your mortgage agent and real estate agent to make the wise decision.
So feel free to contact the score for any questions. And also if you want me to hop on a call, if you have any questions personal questions that you want to discuss I'm always happy to you know jump on Scott thank you so much. Have a good night.
Yeah, it is.
Thank you so many guys for hopping lamp with that. I will sign off. Stay home.
Stay try to avoid going out as much as possible.
Looking forward to helping you guys.
Thank you, JJ.
And have a wonderful night.
Make sure you give your time quality time with your family in these times.
Hey, thanks, Clark.
Take care guys.