01 Get out of your lease!
You can't "break" your lease any way you want even by offering compensation to your landlord; the Tribunal administratif du logement (TAL) has several rules and exceptions on this matter. You must come to an agreement with your landlord if you have special circumstances or get permission from the TAL.
We recommend that you transfer your lease to another tenant rather than trying to terminate it. It is a simpler procedure that won’t cost you a thing. In fact, it is possible to negotiate an offer to purchase conditional on the release of your lease. This way, you are covered: if the seller does not accept your offer to purchase or cancels it, you keep your home.
02 Establish your budget and your borrowing capacity
One of the very first steps before starting to look for a property is to establish a budget that takes account of your lifestyle, your projects, your down payment and your finances. Your budget will allow you to determine the purchase price and thus optimize your search.
In relation to this, we recommend that you do a mortgage pre-authorization in order to:
- Know the price range of the properties that correspond to your budget;
- Determine your borrowing capacity and your down payment;
- Ensure a mortgage rate;
- Attest that you are a serious buyer.
Calculate your monthly budget
Next, you can calculate your monthly budget in order to establish the amount you need to live in, finance and heat your home.
You need to calculate the difference between your net monthly family income and the total of your current monthly expenses (debts, insurance, food, subscriptions, miscellaneous expenses, etc.). The total amount should be enough to cover your monthly mortgage payment, taxes, heating and condominium fees (if applicable).
The larger your down payment, the smaller your mortgage and the shorter your payment duration. Additionally, the minimum down payment is 5% of the purchase price of the property.
It is important to note that if the down payment is less than 20% of the purchase price, the buyer must insure the mortgage loan. This amount can be paid in cash or added to the loan according to a variable percentage depending on the risk. Please note that the provincial tax on this insurance must be paid at the time of signing at the notaries.
How do you gather a down payment for your first purchase?
- Use your investments or cash
- "HBPing" your RRSPs
- Obtain financial assistance from a relative (donations)
The Home Buyers' Plan is a federal government incentive that allows you to withdraw up to $35,000 from your savings and retirement plan (RRSP) without penalty. But what few people know is that this program is also available to first-time homebuyers who have no RRSP or not enough to take full advantage of this tax break.
03 Calculate the additional costs
When embarking on this new adventure, we often forget that buying a property can involve costs other than the down payment:
- Down payment (between 5% and 20% of the value of the property)
- Professional fees
- Title insurance
- Inspection fees
- Transfer tax
- GST/QST on professional services
- Moving expenses
- Miscellaneous expenses (painting, repairs, furniture, etc.)
- Mortgage loan
- Utilities (electricity, etc.)
- Insurance (home, car, etc.)
- Property taxes (municipal and school taxes)
- Service providers (internet, cable, cell phone, subscriptions, etc.)
Avoid unpleasant surprises by planning a budget for each of these expenses.
04 Find your new home with a Proprio Direct broker!
For 35 years, Proprio Direct has been the largest independent real estate agency in Quebec. By teaming up with one of our brokers, you'll benefit from our professionals' significant expertise, incomparable efficiency, and unwavering patience.
The broker's job is to :
- Show you properties that meet your criteria and provide you with privileged information;
- Inform you of the current market conditions in your area;
- Discuss your needs and desires and analyze them to ensure that they are in line with your budget;
- Organize visits according to your availability;
- Coordinate the work of other professionals you will require during the process and let you benefit from their network of qualified contacts;
- Prepare the purchase offers and negotiate on your behalf with the seller and their broker;
- Ensure that all required documents are in order, properly completed and that deadlines and conditions are met;
- Assist you with the mortgage financing for you to benefit from the best offers;
- Inform you of government programs for which you may be eligible, such as the Home Buyers' Plan (HBP), as well as legal solutions for your lease, if applicable;
- Accompany you to the notary's office to close the transaction.
The added value of Proprio Direct brokers
By entrusting the sale of your property to a Proprio Direct real estate broker, you have the opportunity to find your buyer while profiting from the services of a broker from the beginning to the end of the transaction and to benefit from a favorable 2% commission rate.