How To Buy a House in Montreal
Montreal’s real estate market is flourishing as an increasing number of non-resident investors are developing interest in the city and seeking to purchase property here. This isn’t surprising considering that Montreal is the business capital of Quebec – largely French-speaking – and Canada’s second most populous city.
If you’re looking to buy a home in Montreal, you have made a wise choice. However, you need to analyze your financial health before making this decision.
Using data from June 2022 mortgage rates, average home prices and property taxes, the mortgage broker compiled estimates; Montreal sits at the top of the list, with an estimated income of $110,900 needed to purchase a home.
The average home sold price in Montreal is $564,683, as per the latest Montreal Housing Market Report. Considering the minimum amount of down payment (5% for the first $500,000 & 10% for the portion of the price above $500,000), you need to have at least 31,4168.3 to buy a house in Montreal .
Though home-buying can be a daunting process, if you’re armed with the right knowledge and make smart decisions, you can find the perfect home for you and your family. We’ve broken down the process into eight steps to help make things a little easier for you:
Step #1 – Find a mortgage broker or contact your bank to get pre-approval, so you know about your budget.
It’s wise to talk to a mortgage broker and request pre-approved for a mortgage before you start looking for a house. This way, you can confirm your borrowing capacity and clearly understand the price range you can afford. You might even be able to get an interest rate guarantee from the bank for a certain period of time.
Furthermore, having a mortgage broker and pre-approval document also increases your negotiable power while looking for the house, providing your credibility and advantage over the other home buyers.
To apply for pre-approval:
- You can consult with an experienced mortgage advisor in Montreal
- Apply for pre-approval online
Step #2 – Find a broker experienced with first-time home buyers
Carrying out the real estate transaction on your own is a risk and not a wise choice whether you’re a first-time buyer or not. In this way, you cannot get broader exposure for your property, handle complex transactions including legal and potential pitfalls and negotiate a good deal.
Being a first-time buyer makes it even more important to have an experienced broker by your side who can inform you about the first-time buyer’s advantages, including interest-free loans, etc. Furthermore, if you’re looking to buy a house in Montreal, you should contact ALP PEREZ, an expert real estate broker who does not take any commission from buyers. You can significantly benefit from his experience and services without paying a single penny out of your pocket as commission.
Step #3 – Ask your broker to send you MLS listings so you can check different properties online
Once you’ve contacted the broker, now it’s time to look at some properties. So, instead of doing random searches online, ask your broker to send your Multiple Listing Service or MLS listings.
What is MLS?
An MLS, or multiple listing service, is a database set up by real estate brokers who work together in order to provide data about a vast range of available properties. This information allows brokers to see each other’s listings and hopefully connect buyers with sellers. This system is beneficial for both the listing and selling brokers as it saves time and effort by consolidating information.
Step #4 – Choose some properties and ask your broker to schedule a visit
Home-buying is a process! It’s essential to research and know what you’re looking for before choosing any properties.
Not having an idea of what you want is like asking somebody to cut your hair without telling them how you want it done – sure, they might do a good job, but it’s a bit of a gamble. Avoid that risk by figuring out your needs and preferences before starting your home search!
Here are some considerations to keep in mind while choosing the properties;
- Area and neighborhood (Urban core, suburbs, subdivisions, rural, etc.)
- Type of home (Single Family House, Bungalow, Semi Detached, Townhouse, Duplex, Triplex, or Condo)
- House features (Heating and cooling system, smart locks, aluminum windows, etc.)
- Newly constructed or old
- Parking Spaces
Once you’ve chosen some properties that are aligned with your preferences, you can ask your broker to schedule a visit for you.
Step #5 – Make an Offer
After finalizing the house, it’s time to make an offer to the homeowner. The purchase offer or promise to purchase contains all the critical information required to close the sale. Your real estate broker will take care of the written documentation and contract.
The contract general consists of the following things,
- Purchase price
- Transfer date of the ownership
- Included and excluded items of the translation
- Buying terms and conditions
Step #6 – Do a pre-purchase inspection
A pre-purchase home inspection done by a licensed inspector helps examine the condition of a home, both internally and externally, before buying the property. This way, you can avoid any costly headaches or nasty surprises that might come up down the line.
Step# 7- Apply for a mortgage after the offer acceptance
Once the seller accepts your purchase offer, it’s time to apply for a mortgage.
Here are the main steps of a mortgage loan application to help get you started on the process of buying a house with the support of your advisor. Remember that a mortgage loan application differs from a pre-approval application, so it’s important to start thinking about which financing option best suits your needs.
- Application: This is where you’ll provide your personal information, like your income, employment history, and debts.
- Documentation: Your advisor will ask for some documentation to verify the information you provided in your application.
- Credit Check: A credit check will be done to assess your creditworthiness.
- Mortgage Insurance: If you’re borrowing more than 80% of the home’s value, you’ll need mortgage insurance.
- Mortgage Rate Lock: Once you’ve been approved for a mortgage, you can lock in your interest rate for a set period of time.
- Closing: This is the final step where all the paperwork is signed, and the mortgage is funded.
Step# 8 – Find a notary to take possession of the property
Lastly, after securing the mortgage successfully, now it’s time to take possession of the house. For that, you need to find a notary. Once done, the funds approved and provided by the bank are transferred to the seller, and after signing the legal documents, you officially become the house owner.
Now that you know more about the home-buying process, you’re ready to take the next step. If you have any questions along the way, don’t hesitate to ask your advisor for help. Buying your first home is a big deal and should be a memorable experience – even if it’s complicated. Luckily, there are experts like us who are here to answer all of your questions!