1- Determine your needs
The reasons for buying property vary widely from one person to another. It is therefore extremely important to discuss your specific needs with me before starting visiting properties. During our appointment, we will identify them and draw up a list together of the important factors to you such as localisation, price, type of property wanted, number of rooms, proximity with shops, and so on.
2- Obtain a financial pre-qualification
Check with your financial institution to find out how much you can afford to carry as a mortgage and have the loan amount preauthorized. When will come the time to look for the best mortgage opportunity, i will be there to refer you to the best mortgage broker. A pre-qualified mortgage is fast and easy to get. And free. When you’re pre-approved for a mortgage, you take the stress away while you shop and you feel more secure knowing that you will be ready to move when you’ll find your dream house, and that you will have more arguments when negociating.
3- Make a list of fees related to buying a property
Some of these costs are to be paid only once, while others might be on a monthly or annual basis, and are over the ones you expected to pay. All these costs do not apply to all situations but it’s better to know what they are ahead of time in order to prepare a realistic and complete budget. Remember that buying a house will constitute the central point of your financial situation.
– Expenses to allow for when signing before notary :
Notary fees : around 1500$. Inform yourself about the fees charged by various notaries. Costs will vary based on the complexity of the file and the services offered by the notary
Tax redistribution and refunds : refunds are calculated from the date of the signing of the deed of sale. You are responsible for reimbursing the seller for the number of days paid to date : municipal taxes, school taxes
Heating oil tank : the seller is required to have the tank filled on the day of the signing of the deed of sale and submit the invoice to the notary for reimbursement in full by the buyer
Electricity meter (Hydro Québec) : the buyer and the seller must notify Hydro Québec of the date the property is scheduled to change hands, have the meter read, and ensure that all amounts owing are properly allocated
Homeowner insurance : upon signing of the deed of sale, you must present proof that you have contracted homeowner’s insurance in an amount equal to or greater than the mortgage on the property. Home insurance covers the reconstruction of the property (replacement value) in case of destruction and covers the contents (theft and fire). Your lending institution will require proof of insurance before releasing the funds for the signature at the notary. We’re talking about 500-1500 per year.
Tax on SCHL insurance premium of 9%
– Expenses to allow for after having signed the deed of sale :
Land transfer or welcome tax : the municipality in which you settle will bill you within four (4) to six (6) months of the signing of the deed of sale in an amount based upon the selling price and scaled as follows (we take the greatest amount between the evaluation and the price asked) :
0.50 % of amounts up to $50,400
1.00 % of amounts between $50,400 and $251,800
1,50 % between 251 800 $ and 503 500$ (Only for Montreal Island)
2% (only for Montreal and for amounts exceeding $503,500)
Moving fees, painting, interior and exterior decoration, etc.
The costs of professional moving companies average between $80 to $125 an hour for the truck and 3 men. The cost increases from 10 to 20% during the 1st of July period. Consider the fees you will have to pay to connect the phone and cable. Remember to notify current service providers prior to moving and to take action as required when settling into your new location.
– Other fees :
Your down payment : it will vary in accordance with the kind of property you are looking for :
Single family, duplex & condo (owner-occupied) : 5%
Triplex & quadruplex (owner-occupied) : 10%
Quintuplex (owner-occupied or not) : 15%
1-4 housing (non owner-occupied) : 20%
Note that several specific factors will have to be taken into account relatively to these amounts : for example, your status in Canada (citizen, resident or work permit) will go along with the specific amount that you will have to bring in terms of down payment. Since february 15th, 2016, SCHL will be asking you more than 5% downpayment when you buy a condo/house/duplex which value is 500,000$ and plus. If you have a visa and you are in Canada since less than a year, a minimum of 10% downpayment will be necessary to buy a condo/house/duplex. Furthermore, an undivided property often means a 20% down payment, as opposed to a divided condo. I would recommand that you check the exact approval politics and rules with your mortage broker regarding to your specific situation !
Mortgage insurance fees : if you do not deposit the required minimum amount in cash to get a “conventional” loan from the bank you will have to pay an insurance premium. This premium represents from 0.5% to 3.5% of the total amount of the mortgage. Payments of the premium are usually added to your monthly payment
Inspection fees : it’s vital to have your future house inspected. It will be a condition in your promise to purchase. Fees are around 400-600$. I will refer you a certified inspector who is affiliated to ‘’Ordre des inspecteurs du Quebec’’
Evaluation fees : the only case where you will have an evaluation is when the bank asks for it. Otherwise you won’t have to do it. The cost of such an evaluation varies from $275 to $600.
Land surveying fees : when you buy an existing house (as opposed to a new one), the bank can require an updated version of the certificate of location. If your offer to purchase did not already include it as being the responsibility of the seller, you will have to pay fees ranging from $500 to $800 for such a document.
Mortgage brokerage fees : a mortgage broker has the right to require to be compensated for analyzing various offers from lending institutions. However, it is important to “shop” since many brokers will offer this service for free because they are compensated by the lending institution.
Condo fees : the co-owners must pay monthly fees for the maintenance of common spaces, stairs, landscaping, snow removal, etc. These costs vary according to the property and the decisions of the co-property syndicate.
Water testing fees : if the water of the coveted house is fed by a well or a private aqueduct, you will want an independent expert to analyze the quality of the water. You will have to pay the cost for collecting and testing the water.
Infrastructures : it is important to know if a special tax relating to exceptional infrastructure expenses (sidewalks, aqueduct, sewers, paving) will apply to the property you’re interested in buying. These infrastructure fees might amount to thousands of dollars in addition to municipal taxes for a predetermined number of years.
If you are moving out far from my working sector, I will be able to refer you to a professional broker in the area of interest to you. According to federal and provincial tax laws, when a person moves to a new home (40km) because he is or will be employed in the new community, all eligible moving costs are tax-deductible – including the real-estate agent’s commission, notary fees and property transfer tax for the new residence.