# First Time Home Buyer (Quebec)



## tekcap (Feb 13, 2014)

Hello,

I'm currently living in an apartment with my girlfriend and we recently decided that it would be a good idea to buy a home this year. My first move was attending a free home buyers seminar, which ended up being a disappoint because in reality it wasn't about teaching newbies, it was a way to promote their services. My next move after that was to meet with the bank and get pre-approved, which I did for 250 000. After reviewing my girlfriend and I's monthly budget, I've decided that my maximum is 200 000 and not 250 000 (The bank said I could have 300 000 if I wanted.. what the hell is wrong with them?). This means that houses are out of the question and now condos are my only option, which is fine. The Realtor/Mortgage broker from the seminar has been very persistent in trying to get me to see him, most probably to sign some sort of buyer representation agreement. Before I go ahead and give in and let him take care of everything, how hard is it to do all this myself? I feel like I could probably take care of all this myself since I'm going to buy a condo for under 200 000 and not a half a million dollar home. 

Here are my concerns 

1: How do I shop around to get the best interest rate and closing fees? Is there a way to do this quickly and efficiently, without having to physically go to every bank in town? I'm sure the brokers don't go to each bank on my behalf, they must have some sort of system that allows them to check all the rates quickly? I don't mind putting in the time and effort it takes to understand all the numbers and do the negotiating. 

2: The internet pretty much allows me to be my own Realtor, right? I understand that they have access to much more detailed databases and have actual experience in the field, but I feel that the 2.5% commission they take might cause me to settle for something less. 

Does anyone here have any experience with buying homes in Quebec? I know that a law passed a few years ago that disallows Montreal Realtors from listing on Realtor.ca, which is strange because I do see plenty of homes on there.


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## Spudd (Oct 11, 2011)

You can look online for some mortgage rates. http://www.ratehub.ca/current-mortgage-rates-quebec?vscroll=0

These should be fairly competitive. Ask your bank what's the best they can do, and if it beats or matches the online rates, you're probably good. If not, then you can call around to the places showing good rates online, or call a broker. My experience with a broker was that they weren't able to offer much better than I could find online or negotiate with my bank - but it can be worth a shot. 

Using a realtor to buy a place won't hurt you (unless you buy from someone who isn't using a realtor). If you just call up the realtor who's listing their place and buy it from them, they will charge the seller 5% commission, whereas if you come with your own realtor, the seller will still pay 5% commission but it will be split between their agent and yours. So from the buyer's point of view there's really no difference. 

I don't have experience buying homes in Quebec but I have browsed realtor.ca a lot there, and it seems to me that although there's a listing on realtor.ca, if you click on it, it always goes to the realtor's own website, whereas in Ontario the listing is just directly on the realtor.ca website. No idea why they would make such a law!


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## wendi1 (Oct 2, 2013)

You're quite right that the bank will give you way more money than you think you can afford - they are counting on you neglecting your other obligations (like retirement) to pay them off. You will probably earn more money in later years, too.

If you and your girlfriend are buying together, make sure it is written down, and agreed to by both parties what happens if you break up. It seems unromantic, but it is easier to negotiate this stuff when you are not angry with each other. 

I would use a realtor, too. See if you can get by without signing that stupid BRA. Don't go with the big bully - find out who sells lots of condos in your area, or get a recommendation from someone you trust. A bad realtor can get you in a lot of trouble. 

You want to make sure there is enough money in the condo's pocket to cover expected maintenance - a special assessment can be very difficult to deal with. Don't forget you will need some cash on closing to cover notary fees, property taxes, welcome tax, and the like. Make sure the realtor lets you know what to expect.

This is a big step. Have a great time!


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## m3s (Apr 3, 2010)

tekcap said:


> Here are my concerns
> 
> 1: How do I shop around to get the best interest rate and closing fees? Is there a way to do this quickly and efficiently, without having to physically go to every bank in town? I'm sure the brokers don't go to each bank on my behalf, they must have some sort of system that allows them to check all the rates quickly? I don't mind putting in the time and effort it takes to understand all the numbers and do the negotiating.
> 
> ...


1. There is more to a mortgage than the best rate! A good mortgage broker knows the legalese and can translate your options to your specific needs. It seems they can also find the best rate without you shopping around and possibly lowering your credit score. I contacted an experienced broker all via email and I won't even bother visiting the big bank pony shows next time.

2. Yes and no. You are correct to be wary of RE agents! Their best interest is to close any deal asap and move onto another commissioned sale. The only benefit I see to using agents for a buy is that they have guarded knowledge and access to listings (they do this to keep their job relevant in the days of iPhones...) If you can google and arrange a home inspection on your own, and fill out an offer (5 mins) the rest is pretty easy.

I've bought a house before in Québec. For the first time it's probably worth using a RE agent. There is also DuProprio website which is a much nicer than mls imo, and eliminates the seller's agent (cutting out at least one commission)


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## Just a Guy (Mar 27, 2012)

1) you can contact a mortgage broker to get you the "best rates", bear in mind these guys get paid by the mortgage issuer so they can be biased. Also, look at things like repayment terms, and limitations, restrictions, penalties etc. it's not just about the rate (which is pretty much standard if you've got a good credit score). 

Remember, just because you've pre-qualified, doesn't mean you're actually qualified...the banks will probably make getting your funding a nightmare...but you'll still get it in most cases. Remember to add the "pending financing clause" just in case.

2) Realtor listings on-line tend to take a few days to show up on the public site I find. The real "deals" tend to be snapped up pretty quick by investors who work with realtors directly (speaking from experience here). I've seen many deals close before they even hit the public site.

Also, the realtor's site has much more useful information than the public site. Things like the sold history of the property, the commission rate (it's not always standard), days on the market, and a way to search comparables... A lot of this public ally unavailable information is vital to making a good deal. Realtors can also pull title cheaply.

A realtor can also set up automatic notifications of certain types of properties that sends you an email as soon as a listing changes. In your case, you could have 1 list for all properties, not a trailer, listed for under $250k (remember asking price isn't selling price), in a certain city...I'd also set up another one for all foreclosures in an area under a certain price range to bring that to my attention.

A realtor also often works with a mortgage broker and lawyer, lawyers rates should be pretty standard for this transaction, but it may be worth a few phone calls.

Having a realtor to buy isn't that bad, and comes with a lot of benefits...

3) places where I don't trust a realtor is once you've found a place. Remember, these guys get paid only once you've bought a place. I've seen many realtors turn and put pressure on people to buy something once they show interest...they rarely help to negotiate the lowest price, especially with first time buyers. Finding a realtor you like isn't easy, even if they seem good at first, they often turn in the end. 

Don't forget that realtors are professional salesmen. They are usually manipulating you. Often they will show you a lot of dogs and then show you a gem (which happens to be just "slightly" higher than you wanted to spend), or other such games...real estate is about emotions. It's a good idea to take a step back at times.

4) one thing you may benefit from is a home inspection. Try to avoid the big chains, most of these are run by ex-realtors. Try to find one that is an engineer or trades guy who actually know something. If you can't find a company, ask some friends who have construction experience or save your money. Most home inspectors aren't worth anything.

5) listen to Wendi about writing down what happens if the two of you split up. There are huge penalties built into mortgages, and selling properties which people tend to forget about and only see the "value" of home ownership. 

Remember that there are many ways you can be manipulated in real estate. Have patience, there are lots of houses out there, and probably many more coming on line in the future as the bubble bursts or at least deflates. Set your ideas down on paper, and don't be afraid to stick to your guns in the face of extreme pressure.

P.s. I almost forgot don't get sucked into the "starter home" crap. Always buy a place with the idea that this is the last place you're ever going to own, and that you're happy with the choice. True, the average Canadian moves every 7 years (which, incidentally, is pretty close to the break even point when you add up all the costs of selling), what happens if something changes and you can't move? You'd better like the place you buy.


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## Mortgage u/w (Feb 6, 2014)

MORTGAGE:
Seek a solid mortgage broker for your financing needs. No they don't visit every bank. Yes they have access to all the banks rates. Their best rates for that matter. Broker business and branch business is 2 different entities. The branch you'll need to negotiate your rate. The broker already offers the best rates available. Select a broker with a solid reputation since they higher producing brokers have access to the even better rates. Simple question to ask your broker, 'what volume of mortgages have you closed last year?' If their response is less than 20 million, change broker.

RE:
Montreal agents initially opted out of MLS but recently have rejoined. Competition issue regarding out of province agents listing QC properties on MLS for a flat fee and no commission. QC agents felt threatened so they fought MLS. MLS felt threatened and banned out-of-province agents. Everyone is happy now - except customers wanting to list privetely.
Do your own homework - search MLS (or centris.ca for QC) and DuProprio which offers props for sale by the owner. If you don't know QC at all, refer to a top producing agent. You should get some form of advice. At the end, they are all money hungry and it seems they are starving these days...so beware.

CONDO:
Once you figure the cost of taxes, condo fees, insurance and borrowing costs, you will soon realize that a rent payment is a bargain. Due to a surplus of condo builds in QC, their resale is very limited. Since there is an abundance, most people will opt for a new condo purchase vs a used one. Unless you buy a prestige condo over $500k.....you will have a hard time reselling your 'average' condo ($250k-$350k). My opinion is you buy small bungalow or a 3 floor townhouse if you want to limit exterior maintenance. Although there will still be a 'condo fee' for the townhouse, it is usually much lower than condo apartement and resale value is much higher. Price is virtually the same. 

If you're 'thinking' is to start off small and eventually buy something bigger, my advice is to make that decision now. Since you can qualify for a higher mortgage, I say go for it and buy the bigger home (not condo) because todays prices will seem like a bargain tomorrow. If you can't go that route, rent a few years and put an excess in savings. You can easily rent a 2 bedroom for $700-$800 a month. Factor in that an avg monthly pmt for a mortgage is easily $1500 when you include taxes.....so put the difference in a savings account to build a bigger down payment. You should be able to easily save $8k-$9k per year while renting. Do the math and buy when you're ready.


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## tekcap (Feb 13, 2014)

Some invaluable advice here, thanks everyone.

This has really put some doubt in my mind on whether I should buy a condo. It's true that there are a lot of them being built at the moment, especially the area I'm looking it. Houses are pricey unless I'm willing to drive 3-4 hours per day, which I'm not really sure I'm confortable with. If I get a house in a closer area, then I'm looking at something built between 1950-1970, which might not be a great idea, or maybe it is, I really don't know.

What is the best way to look for a good Broker and Agent? Internet searches, or just opening the phone book and calling one by one to see that they meet my criteria?

"Simple question to ask your broker, 'what volume of mortgages have you closed last year?' If their response is less than 20 million, change broker."

I like this idea, but is it accurate here in Quebec? Would most agents answer this question? or would they feel insulted?


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## Arshes76 (Jul 5, 2013)

I'm amazed at how many people still want to buy a home, despite all the bubble talk. Tekapo can I ask why now? How you run the numbers? Why a condo? Purcashe a condo will probably cost you double what it is to rent, even IF there's re growth and equity building. I assume your going to sell a few years down to buy a house. If that's the case just rent a build a down payment.


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## tekcap (Feb 13, 2014)

Arshes76 said:


> I'm amazed at how many people still want to buy a home, despite all the bubble talk. Tekapo can I ask why now? How you run the numbers? Why a condo? Purcashe a condo will probably cost you double what it is to rent, even IF there's re growth and equity building. I assume your going to sell a few years down to buy a house. If that's the case just rent a build a down payment.


I'm not really familiar with the market or how it works. I was just told to buy a house "NOW" because building a down payment doesn't work since supposedly house prices are going up faster than I can save.
Is this just not always true? I'm curious to know.


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## Arshes76 (Jul 5, 2013)

Prices WERE going up quickly, now not so much. If it were me I would wait at least a year, things are already changing. Prices here in Edmonton have been falling since 2008 and this is oil country. Can you check what prices were in your area? You may find prices falling where you are too.


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## wendi1 (Oct 2, 2013)

Local RE prices go up and down (not just up). There is no true way to tell what prices will be in 5 years, or 1 year. Or interest rates. Or the stock market.

I had assumed you and your GF wanted to move in together for reasons other than building equity - a condo or a house is not just an investment, it is also a home.


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## Mortgage u/w (Feb 6, 2014)

tekcap said:


> Some invaluable advice here, thanks everyone.
> 
> This has really put some doubt in my mind on whether I should buy a condo. It's true that there are a lot of them being built at the moment, especially the area I'm looking it. Houses are pricey unless I'm willing to drive 3-4 hours per day, which I'm not really sure I'm confortable with. If I get a house in a closer area, then I'm looking at something built between 1950-1970, which might not be a great idea, or maybe it is, I really don't know.
> 
> ...


I live in a Montreal suburb (Laval) and I can tell you there are a lot of newer homes to choose from. My commute to downtown Montreal is apx 45mins using car and subway. A commute of 3-4 hours is highly unlikely for Montreal. Maximum travel time I hear is 2 hours and that is someone living far out of the Greater Montreal Area. . My advise is to look for something close to a subway station because you can travel any line end-to-end within less than 1 hour. Homes within the downtown area are much older than 1950-1970...more like early 1900s. I strongly recommend you look at a suburb within easy subway or train access. Homes will be much more recent and much more affordable.

As for the mortgage broker volumes, they will no doubt answer the question. Brokers are proud people so if they sold 20 million +, they will answer without hesitation. If they don't answer, then you know what to do. Biggest brokerage firm in Quebec is Multi-Prets. We also have all the other banners such as DLC but not as dominent as Multi-Pret. Alternatively, you can go with TNM (True North Mortgage), they are salaried employees so there is no pressure on their behalf to force you a specific lender or product. They have access to all the better rates and offer sound advice.
Good luck to you!


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