Holiday Home Purchase – What to expect during the holidays

In our household as well as others around the Okanagan and Canada, the holidays are a time that are filled with family, relaxation, and festive spirit. For some, like our family this year, it is a time where big decisions have already been made and new roots are about to be put down.

In 2019, stats can reported that 45,000 families made the decision to purchase a home at the end of November with the potential for closing the deal and being moved in by the end of December or by Christmas. In most cases, these purchases went the way they were planned, smooth and without issue. However, in some instances, buyers encountered a big surprise in how the market works during the holiday season, with some of the issues not being so merry.

Through my fifteen years of experience, I’ve helped numerous clients during this unique time of year and if you are deciding that a December closing on your new home is the time for you, the main question I always ask my clients to consider is:

“Do we have our Real Estate team and professionals, [Real Estate Agent, Legal (Solicitor or Conveyancer), Mortgage Broker and Finance (Bank)], in place and what are our expectations of all involved?”

Once you have that questioned resolved, it is good to understand the following issues that might delay or impede the process to meet your expectations.

Time:

Are we giving ourselves enough time?

Very much like buying and sending off gifts, time is the biggest factor and touches every aspect of the process and even more so during the holidays. Typically, the closing of a home from the time a signed offer is agreed to, to the time of broker completion is 45 days. This timeframe is condensed even more during the holidays, with roughly only 18 working days from the start of December to do what you normally are completing in 45 days. If you start the process late, you might not be ready to move in till early to mid January.

COVID-19 and Finance

The big elephant in a small room. COVID-19 is here for the foreseeable future and we advise our clients that it is affecting the finance world in different ways. The biggest being it’s started to create inefficiencies that a year ago we never saw.

The major issue we deal with now is the loss of the “office advantage”. Previously, all parts of the finance team where closely knit, with the junior underwriters and credit teams sitting in close proximity to each other. This helped to resolve any financing issues around the purchase of a home as they arose. How does this affect me you might ask? Today, most or all these employees work from home and are communicating either by email, phone, text or in some cases having to schedule Zoom meetings to review documents. It’s not always fluid and we’ve seen this process go from one or two days to adding an additional two to three extra days worth of time (Oh, the sneaky time factor again).

With this change in the process we advise our clients that making sense of the finance rules, some of which are new and some which continue to evolve, (The New Stress Test) as well as understanding your credit are ways we can help you lessen the time spent dealing with your bank.

Legal Team – Notary or Solicitor

What is the best option for us and when are they available, if at all over the holidays?

During a typical year, your legal representation whether that is a solicitor, or a notary is open, depending on the firm, Monday to Friday, 9 a.m. to 5 p.m. So roughly give or take, about twenty days during any given month. However, over the holidays, this can change. In most cases both have reduced hours and during December that can shorten your window to roughly 15 days. Why? Most solicitors and notaries are closed a few days prior to Christmas day and thru to New Years day. If for some reason, they must have employees come in and have documents signed during these days off, it could and usually is an added expense to the final closing costs.

The second thing to keep in mind is whether you feel the transaction is straight forward enough for a conveyancer or requires a little more expertise of a solicitor due to some legal issues surrounding the property, such as taxes or potential issues with a previous spouse. This is important because if for some reason a notary is not able to resolve some issues, they ultimately will send you to a solicitor, which again, will add time and money to the equation.

Your expectations:

Your expectations are sometimes the greatest challenge you will face during this process. My best advice to clients is that they should be giving themselves reasonable timelines and really understanding the issues noted above. Understanding these issues, allows the seller, the mortgage broker and the rest of the professional team to make strong decisions that are fact based. This can help the purchasing process move smoothly and create reasonable expectations within a client’s real estate team that make sense for all involved. In this we can help you avoid any potential disappointment or delays that might arise.

This December, whether you are purchasing a new home or seeking advice on the process, we hope that you are building on traditions and memories and as always, we are here to help you grow new roots.

From my family to yours during this holiday season.

Kari