Buying your first home in Montreal or anywhere else can be quite a daunting task. Whether you are purchasing a condo, townhome, or house, you need to keep in mind that there will be lots of expenses involved.
In fact, real estate agents in Montreal advise potential homebuyers to set aside between 2% to 3% of the property value to cover additional expenses. So, are you planning to buy a property in Montreal? We have compiled a list of expenses to plan for to make the process a little bit easier for you.
Transfer Duties
Also referred to as welcome tax, transfer duties will be charged within days or weeks following the signature of the deed of sale for the home you are buying. The total amount of the welcome tax is approximately 1% or less of the buying price. Feel free to use this simple tool to find out how much you will be charged.
Appraisal Fee
Your financial institution may also ask for property assessment to confirm its actual market worth. This is where the appraisal fee comes into play.
A certified property appraiser will be deployed on-site to verify the dimensions of the house, its structural condition, quality of renovations carried out, the size of land, and the general characteristics of the neighborhood (availability of social amenities such as schools, hospitals, shopping centers).
The appraiser will then give his/her opinion on how much the property is worth taking into account the prevailing market conditions.
Notary Fee
In Canada, any real estate transaction requires the services of a notary. However, the cost of this transaction may vary widely depending on a wide range of factors. The type of building, number of separate accommodations, and number of interested buyers are some of the factors that would impact a notary’s rate.
The easiest way to determine how much you will pay in notary fees is to reach out to a qualified notary who will assess your case, taking into account all the mentioned factors.
Electricity Meter (Hydro Quebec Costs)
The seller and buyer of any property in Montreal must notify Hydro Quebec of the exact date the property is scheduled to change hands so that the electricity meter is read and all amounts owing properly allocated.
You will be expected to cater for the cost of this process. Charges usually vary depending on a wide range of factors such as urgency.
Inspection Fee
A building inspector will charge anything between $400 and $1,000 to inspect a home in Montreal, depending on its size. However, it is worth paying the money because home inspection can save you from significant losses once the deal has been closed.
Also, don’t be afraid to pay a little more for the services of an experienced and reputable home inspector, preferably one who has qualifications in engineering or architectural design.
Mortgage Insurance
You may also be required to obtain mortgage insurance if you are making a down payment of less than 20% of the property’s asking price.
The cost of this insurance varies from one company to another, but it will always be anything between 0.5% and 2.90% of the total amount of mortgage loan. It is the responsibility of your financial institution to manage the mortgage insurance.