Your protection in real estate brokerage
Role of the real estate broker
Buying an immovable requires extensive technical knowledge. This is why we recommend that you use the services of a real estate brokerage professional in order to make sure that all the operations involved in buying an immovable are completed in accordance with standard practice.
The main function of the real estate broker or agent is to act as intermediary in the purchase, sale or rental of an immovable. He plays a prospecting role by ﬁnding an immovable for the buyer and a client for the seller; the buyer and a client for the seller; he plays a negotiating role by facilitating communications between the parties involved and, mainly, he plays an advisory role and helps , he plays an advisory role and helps the parties deﬁne their needs and complete ne their needs and complete their real estate their real estate transaction in a satisfactory manner.
Knowing how much you can
afford before selecting a home
How much can I aﬀord to invest in a home?
Analyzing your ﬁnancial capacity
Before you even start looking for a new home, you must conduct an analysis of your needs and an accurate evaluation of your ﬁnancial capacity. You must establish a realistic budget taking into account your lifestyle and your goals. The role of this exercise is to set a reasonable purchase price. This way, you can narrow down your search and avoid being tempted by an immovable that is above your means.
The key element in this exercise is accuracy. Remember that a budget is only useful if it takes into account your overall needs and personal or family situation.
Estimating your maximum mortgage loan
Most mortgage lenders use two ratios to calculate the maximum loan that can be granted to an owner-occupant, i.e. GDS and TDS. GDS ratio. The GDS (gross debt service) ratio sets the maximum amount that can be loaned at 32% of the borrower’s gross income. GDS ratio = (capital + interest + taxes + heating + 50% of condo fees) ÷ gross annual income.
How much ﬁnancing do I need?
One of the main concerns of real estate buyers is mortgage ﬁnancing. To determine the amount you will need to borrow, you have to know the purchase price of the immovable and the total expenses you will need to pay cash. The summary of these calculations will enable you to determine the amount of ﬁnancing you will need to purchase your home.
You have to plan on several cash expenses when buying a home. These costs must be estimated to determine the amount you will need to borrow to ﬁnance the purchase of your new home.
Choosing your home
Deﬁning your needs
Once you have an accurate picture of your ﬁnancial capacity and have established your budget, the next step is to deﬁne your needs. This exercise will allow you to reﬂect on your priorities, which will help you in your search and will guide your real estate broker or agent. Following are the main elements to consider when deﬁning your expectations.
Type of property
Are you looking for a single-family dwelling, a duplex or a townhouse? Do you prefer a new or older house? Do you want to own the house and the land or would you prefer a condominium in which only one unit is yours?
Are you looking for a home downtown or in the suburbs? Do you prefer a new area? What is your tolerance is your tolerance to noise and pollution? Are you looking to avoid high-trafﬁc areas? Is the state of development of the area where you will be living important to you? Do zoning regulations allow room for change?
What are your needs in terms of parking? Do you like gardening? If so, what are the sunlight requirements? Do you want a terrace, a patio, a balcony, a pool?
The promise to purchase
You have ﬁnally found the house you were looking for at a price you can afford. You are now ready to make a promise to purchase. Your real estate broker or agent’s help will be very valuable to make this step easier.
The promise to purchase is a contract through which a person undertakes to purchase an immovable. In return, the document also indicates that the seller undertakes to sell the immovable once the promise to purchase has been accepted.
It should be noted that the use of the ACAIQ promise to purchase form by the real estate broker or agent is compulsory for chieﬂy residential immovables containing less than ﬁve dwelling and owned by an individual.
Content of the promise to purchase
Identiﬁcation of the parties
The promise to purchase must identify the parties bound by contract, i.e. the seller and the seller and the buyer. It should indicate the names and addresses of the seller and buyer.
Object of the contract
As its name indicates, the object of the promise to purchase is the purchase of an immovable.