While the spring market is upon us, it’s become clear that the typical real estate rush of previous years has shifted. The traditional ways of viewing properties have begun to adapt to a virtual environment with the growing hesitation of property visits, restrictions on open houses, and the limitation of conducting inspections. In response, a variety of clauses are being used and developed to provide buyers and sellers more comfort and security in their real estate contracts.

Agents and lawyers can get creative to address these issues by providing clauses that allow extensions or terminations under certain conditions, or ways to compensate a party for particular issues.

Here are three important aspects of real estate deals that are being affected, and how they can be addressed during this time:

Health and Safety

Knowing the health status and travel history of the parties is important to minimizing risk to buyers, as well as sellers who are allowing visits to the property. Clauses may serve to reaffirm the status of the parties, and can provide additional terms to extend or terminate if certain standards are not met.

Financing

Many businesses have been mandated to shut down and with the employment status of many people in limbo, the ability to finance has become a concern. Clauses with conditions relating to the buyer’s ability to finance, or the re-opening of a certain industry, can be used to negotiate an offer.

Condition of Property/Inspection

A buyer is responsible for conducting their own due diligence regarding the condition of a property. This can be challenging as the list of essential services in Ontario may include real estate agent services but is silent on inspectors. Clauses that warrant the state of the property can be useful, but so can hold back clauses. Hold back clauses are great tools to ensure a certain amount of money is held back to ensure the integrity of certain property conditions, which may be verified at a later date.

The pandemic is certainly showing its effects on the way the real estate market is operating this year, but perhaps opportunities can be found. Finding creative ways to adapt to the current climate can help buyers and sellers by providing safeguards and help the parties move forward with a successful deal.

Thinking of buying or selling? Contact us! We would love to help get you there.