Legal Brief for May, 2020

The Best Of Times, The Worst Of Times

These are challenging times to be trying to sell a property in Alberta, whether it is a condo, a house or a vacant lot.  The double whammy of low oil prices and the covid-19 pandemic has sent many would be buyers to the sidelines, as they work to protect their own financial resources rather than enter into new commitments, and sheltering in place rather than touring the city looking at show homes or open houses.  Many sellers are likely to find themselves coming under pressure to reduce their listing prices in order to attract interest from potential buyers.  It is shaping up to be a quiet real estate market over what are usually the busiest months of the year in the real estate world.

On the positive side for buyers are the very low interest rates on mortgages that are currently available.  When I tell young buyers about the 1st house that my spouse and I purchased back in 1984 and that the interest rate on our mortgage was 11% they look at me in disbelief.  I then tell them that we renewed that mortgage after three years at 14% and they gasp, especially when I tell them we were lucky we weren’t locked into a 20% interest rate mortgage the way some folks were during those years.

When you can lock in a five year mortgage at an interest rate of less than 3%, the market is almost at the point where you can't afford not to buy if you have been looking to make a move or to get onto the ownership ladder.  Add to this the fact that sale prices are likely to be declining over the next few months, and you have what amounts on the buyer side to a very promising opportunity to purchase quality properties at rock bottom interest rates on borrowing.

However, even in a down market quality always sells, and that principle is no less applicable when it comes to real estate as it does to other products.  A well kept home, reasonably priced, and in a neighbourhood with schools and amenities will always find a buyer.  There are many things a seller can also do to make life easier for a potential buyer.  Having a new real property report and compliance certificate on hand ahead of time for example rather than leaving those items to the lawyer to scramble to obtain at the last minute as part of the closing process can make a big difference in making the process move along from a buyer's perspective when they are looking at whether to make an offer on your house.

The oft quoted opening from Charles Dickens A Tale of Two Cities - "It was the best of times, it was the worst of times.  " - certainly seems to be very applicable to today's real estate market!