Want to buy or sell property in Montréal? Read this!

Thinking of putting your property on the market soon? Step one is to check how much your financial institution will charge as a mortgage penalty, whether your mortgage is closed or at a fixed rate. This step is very important so as not to have any nasty surprises after accepting a purchase offer, because this amount is sometimes high and forces you to list the property higher. If you only realize that you cannot sell at the listing price after accepting an offer to buy, it will be too late and you will have to absorb the penalty. I firmly advise doing this step before you even put the property on the market.

If you have an open or variable rate mortgage, you will not have this problem, but it would be wise and prudent to verify.

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Make sure everything is clean and tidy. The landscaping must also be immaculate and the grass cut. If necessary, do some work such as touching up paint and repairing broken tiles or leaky faucets. Make sure that waste and dead leaves are collected. Remove family photos and overly personal items. A property staged as a "guest room" will be much easier to sell.

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Be sure to open your blinds or curtains. In the evening, turn on all indoor and outdoor lights. A few candles or a lit fireplace increases the inviting sense of warmth. Open a few windows in the summer unless you live in an area that is too noisy. Buyers are usually looking for a property full of light or sun.

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The washroom must be impeccably hygienic and welcoming. Shine all metal surfaces, put out clean towels, scrub the floor and wipe down all surfaces. Close the toilet lid. Set out pot-pourri or candles if possible.

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The driveway and the garage must be cleared out and clean. Organize and clean storage spaces and their access area.

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Strong smells and cooking odors should be avoided. Make sure you turn down the volume of all your devices, especially the TV and set them to play only soft ambient music. Let buyers visit your property in peace by making sure there are not too many people in the house. Ideally, you should be absent and leave only the broker to visit alone with their clients. Prospective buyers will be less embarrassed to ask questions and spend more time on the property if you are not there; two strikes against selling for the best price. Be sure to keep your pets at bay, especially dogs, as some people may be afraid of them.

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Avoid conversations with visitors, answer only their questions. A plus for you may be a negative for them. For example: the proximity of a bus stop is a plus for some and a source of unpleasant noise for others. It is important to let the buyer visit the premises quietly. Let your broker do the talking. Consult them before making decisions. Let your broker take charge of the negotiation process. Avoid saying anything about the price being negotiable or not. This will allow your broker to better control the situation.

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Above all, it is very important to have your mortgage prequalified with your financial institution. In one single step, you’ll benefit from a protected interest rate over a specified period of time, avoiding fluctuating interest rates. In addition, there is often more than one offer on the same property. In this case, the seller will usually consider offers with pre-authorized credit before those without. It is always so disappointing to see a purchase offer rejected for a technical reason like this, after finding the property of your dreams.

Pre-authorization also tells you the exact amount you can invest while staying within your budget. It will be difficult to love a house worth $300,000, for example, after visiting others of a higher value. Also take the time to clearly understand your needs regarding location, size of the house, terrain, etc.

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Acquisition costs vary depending on the type of property; (condo, semi-detached, single-family home, income property ...) new or used. Some fees will only be expected for the first year after the acquisition, for example; down payment, notary fees and adjustments, transfer fee (welcome tax), inspection and/or valuation fees, GST/HST and QST (for new or commercial property only). Other fees will recur periodically, such as; mortgage payments, municipal tax, school tax, insurance and condo fees (for condo or semi-detached units only).

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Before you buy, it is important to know all the expenses to be expected for the first year after the purchase. This way, you can target your research according to your budget.

Once you have found your ideal property, it is strongly advised to carry out a building inspection following the acceptance of the promise to purchase. This inspection can cost between $300 and $800, depending on the property purchased, and whether it is an inspector or building engineer. The latter is generally more expensive. You usually have 7 days to have the property inspected from the date your promise to purchase is accepted.

There is also the down payment when you visit the notary. It can represent between 5% and 35% of the purchase price, depending on the institution chosen, your credit and the type of building. The 5% down payment is usually granted by banks when you are a private occupier and you buy either a single-family home or a condo. In this case, the loan will have to be insured either by CMHC (Canadian Mortgage and Housing Corporation) or by Sagen.ca. In both cases, you will have to pay insurance premiums. To calculate this premium, visit CMHC's website

Notary fees can range from $900 to $1500. To choose a notary, visit the Quebec Chamber of Notaries website at: www.cdnq.org or see the REFERENCES tab at the top of the page.

In addition, you will receive the transfer fee, commonly known as the welcome tax, within thirty days of the notarized deed. You will have thirty days to pay it from the time it is received. Transfer fees are always calculated according to the higher of the next two amounts; the sale price or the market value of the building. Plan this expense by doing the following calculation:

Example for a $275,000 home:

Finally, if you buy a commercial building or a new building that has never been inhabited, you will have GST and QST to pay. Some rebates apply. To get to know them, visit the following website: CMHC-SCHL

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Some expenses will be monthly, others will be annual.

The municipal tax is annual and can be paid in two installments. The account is billed for the period from January 1 to December 31 of each year. The school tax is charged for the period covering the school year from July 1 to June 30 of each year. You can also ask your financial institution to include these amounts in your monthly withdrawal. An unpaid tax could result in a seizure of the building by the municipality, so it is very important to be vigilant.

The mortgage payment can be paid monthly, weekly, or bi-weekly, depending on your preferences and your bank. It is advisable to consult your lender to find out which solution is best for you. A bi-weekly rather than monthly payment could save you several years of payments on your home.

There are also insurances that are renewable and can be spread over the year.

Finally, for those who buy a condo (divided or undivided) there will be the condo fee to pay. These are usually monthly. The condo fee is used to create a reserve fund in case there is work to be done on the building. A portion of the condo costs are used to pay for joint insurance as well as the maintenance of the common areas. You should check with the condominium syndicate in question to find out what your condo fees include.

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