Archives des real estate news - Courtier Immobilier Montréal Yanick E Sarrazin https://yanicksarrazin.com/en/immobilier/tag/real-estate-news/ Plateau Mont-Royal, Outremont, Rosemont La-Petite-Patrie, Mile-End, Ville Marie Wed, 26 Feb 2025 14:19:06 +0000 en-US hourly 1 https://wordpress.org/?v=6.8.5 https://yanicksarrazin.com/wp-content/uploads/2020/11/77174542_2673133149440852_8670214071997431808_n-60x60.png Archives des real estate news - Courtier Immobilier Montréal Yanick E Sarrazin https://yanicksarrazin.com/en/immobilier/tag/real-estate-news/ 32 32 How much do you need for a down payment? https://yanicksarrazin.com/en/immobilier/real-estate-news/how-much-do-you-need-for-a-down-payment/ Sat, 13 May 2023 20:21:13 +0000 https://yanicksarrazin.com/?p=19838 Buying a property is an investment involving different stages. An essential step in this process is to finance the property that you want to buy: it is the down payment. But what exactly is the down payment? What are the different down payment percentages depending on the type of property? Here’s a quick overview of […]

L’article How much do you need for a down payment? est apparu en premier sur Courtier Immobilier Montréal Yanick E Sarrazin.

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Buying a property is an investment involving different stages. An essential step in this process is to finance the property that you want to buy: it is the down payment. But what exactly is the down payment? What are the different down payment percentages depending on the type of property? Here’s a quick overview of what a down payment is to facilitate your understanding.

Down payment : what is it?

A down payment is a portion of the amount you will need to take out of your savings to complete the purchase of the desired property. Mortgage loan insurance, commonly known as mortgage, will then pay off the remaining balance of the property.

It is important to know that the higher the down payment, the lower the loan and the interest. The lower the down payment, the higher the mortgage will be. Also, depending on the amount of the property, as well as the type of property (residential or commercial), the down payment rate will differ.

Residential properties

Single-family and duplex homes

Property of $ 500,000 or less

The minimum down payment for a property of $ 500,000 or less is usually 5% of the purchase price for the owner-occupier. For example, if the property was worth $ 400,000, the amount paid for it would be $ 20,000. The mortgage amount will then be $ 380,000. However, it should be noted that interest rates and additional amounts are added to this mortgage.

Property from $ 500,000 to $ 999,999

The down payment for a property of $ 500,000 or more is 5% of the first $ 500,000 and 10% of the amount exceeding $ 500,000. This then means that for a property of $ 600,000, the down payment will be $ 35,000.

This amount was obtained by calculating:

5% x $ 500,000 = $ 25,000

10% x $ 100,000 = $ 10,000

So $ 25,000 + $ 10,000 = $ 35,000

Property of $ 1,000,000 or more

The down payment for a property of $ 1 million or more is 20%. For example, if a property is sold for $ 2 million, then the down payment for that property will be $ 400,000.

Triplex and quadruplex

Property of 500 000$ or less

The minimum down payment for a triplex or quadruplex of $ 500,000 or less is usually 10% of the purchase price for the owner-occupant. For example, if the property was worth $ 400,000, the amount paid for it would be $ 40,000. The mortgage amount will then be $ 360,000. However, it should be noted that interest rates and additional amounts are added to this mortgage.

Property from 500 000$ to 999 999$

The minimum down payment for a triplex or quadruplex of $ 500,000 or less is usually 10% of the purchase price for the owner-occupant. For example, if the property was worth $ 400,000, the amount paid for it would be $ 40,000. The mortgage amount will then be $ 360,000. However, it should be noted that interest rates and additional amounts are added to this mortgage.

Property of 1 000 000$ or more

As with single-family homes and duplexes, the down payment for a triplex or quadruplex of $ 1 million or more is 20%. For example, if a property is sold for $ 2 million, then the down payment for that property will be $ 400,000.

Rental properties

It should be noted that if the owner does not live on the premises of his property, that is to say that he is not an occupying owner and that he has his accommodation(s) rented, he will then have to pay a down payment of 20% for a single-family house, a duplex, triplex or quadruplex.

In the current market, for buildings with five or more units, a down payment of 30% to 50% is required by the majority of financial institutions, regardless of whether the owner remains in the property or not.

The FHSA

The Tax-Free Savings Account for First-Time Home Buyers (FHSA) aims to assist first-time buyers in saving for their down payment. The primary idea is to help young individuals become homeowners amidst the real estate frenzy. The FHSA combines various advantages of the Tax-Free Savings Account (TFSA) and the Registered Retirement Savings Plan (RRSP). For more information on the FHSA, please refer to our article on the subject.

Down payment is a fairly complex concept and will vary depending on the type of property and its purchase price. For single-family and duplex homes of $ 500,000 or less, the down payment is usually 5%. Properties between $ 500,000 and $ 999,999 have a down payment of 15% while those with an amount of $ 1 million and more will require a down payment of 20%. For triplexes and quadruplexes up to $ 999,999, the down payment will be 10%. It should be noted that properties that are not occupied by their owner choose a down payment of 20%. Rental properties can vary between 20% and 25% of the down payment depending on the type of property.

It should also be noted that the down payment for foreign investments differs and is at least 35% for residential properties and revenue buildings. See our article on the Prohibition on the Purchase of Residential Properties by Non-Canadians Act for more information on foreign investment. 

With this wealth of information in mind, it is recommended that you be accompanied by your financial institution and by a real estate broker who will explain in detail the intricacies of the down payments required for each type of property.

Contact one of our real estate broker for additional information

Related Posts

L’article How much do you need for a down payment? est apparu en premier sur Courtier Immobilier Montréal Yanick E Sarrazin.

]]> Lease renewal : what you need to know https://yanicksarrazin.com/en/immobilier/news/lease-renewal-what-you-need-to-know/ Fri, 31 Mar 2023 19:28:12 +0000 https://yanicksarrazin.com/?p=38953 Lease renewal : the important points As the deadline for lease renewal approaches, it is appropriate to point out a few details of the law governing the conditions of the lease. In a residential context, whether by an individual or through a real estate broker, the lease is a written contract that defines the terms […]

L’article Lease renewal : what you need to know est apparu en premier sur Courtier Immobilier Montréal Yanick E Sarrazin.

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Lease renewal : the important points

As the deadline for lease renewal approaches, it is appropriate to point out a few details of the law governing the conditions of the lease.

In a residential context, whether by an individual or through a real estate broker, the lease is a written contract that defines the terms and conditions of the rental of a property (apartment, condo, house) between an owner (landlord) and a tenant. It is therefore binding on both parties and the terms must be respected.

Thus, if a landlord wishes to make changes to the lease, certain rules must be respected within the legal framework of the Tribunal Administratif du Logement (TAL).

Our real estate brokers have taken their pen to enlighten you on the subject.

What is a lease renewal ?

A lease renewal, commonly referred to as a lease rollover, occurs automatically without the landlord or tenant having to exchange any notice. However, it is different if the landlord decides to change the terms of the lease or increase the rent.

In this case, the landlord must respect certain deadlines, depending on the length of the current lease.

See the table below for the deadlines.

Lenght of the leaseTime limit for the notice of renewal of the lease
12 months or more3 to 6 months before the end date of the lease
Less than 12 months1 to 2 months before the end date of the lease
Indefinite term1 to 2 months before the desired modification date

Considering that in Quebec the majority of leases end on June 30th and start on July 1st, some tenants have already received notices since January 1st, since the landlords have until March 31st to manifest themselves.

The contents of a notice of lease renewal and the tenant's options

The notice must be in writing and clearly state the proposed changes to the renewal of the lease, whether it is the rent or other terms of the lease, such as the term of the lease or the removal of the right to use the yard or parking lot.

The notice must also state the time limit for the tenant to refuse the requested changes, which is 1 month from the date of receipt of the notice. The notice must be dated and signed by the landlord.

In the case of a rent increase, the law allows the landlord to choose among three formulations: the proposed new rent in dollars, the increase in dollars or the percentage of the current rent.

Following receipt of this notice, the tenant has several options available to him or her:

– Accept the new agreement.
– Refuse the changes.
– Do not renew and vacate the unit at the end of the lease.

If the tenant does not respond to the notice, the law considers the changes to be accepted.

The right to maintain the premises

The right to maintain the premises is the law that establishes that a tenant may remain in his or her dwelling as long as he or she wishes; however, he or she must respect all the conditions of his or her current lease. This law allows the tenant to refuse the changes required by the landlord and still remain in the unit.

If the tenant decides to refuse the changes proposed by the landlord, he or she must respond to the notice by clearly indicating this. The same applies if the tenant wishes to leave the unit at the end of the lease. If the tenant refuses, the landlord has the right to request a hearing at the Tribunal Administratif du Logement in order to counter this refusal.

Rent Setting in the Tribunal Administratif du Logement

In the case of a dispute over proposed changes, the tenant and landlord can meet to try to reach an amicable compromise. However, the landlord may also apply to the Tribunal Administratif du Logement (TAL) to set the rent or to have the TAL rule on the disputed change. The landlord has one month after receiving notice of the tenant’s refusal to apply to the TAL to set the rent. If the landlord does not do so, the lease will be renewed under the same conditions as before.

The TAL will then determine the appropriate rent amount, taking into account the standards set out in the Rent Determination Regulation. In accordance with the regulation, the TAL will take into consideration various operating expenses such as municipal and school taxes, insurance premiums, electricity and gas costs, maintenance expenses, and repairs and improvements made to the unit. All of these expenses allow the TAL to adjust the rent in a fair and equitable manner.

In this case, it is the landlord’s responsibility to provide supporting documentation to the TAL to substantiate the expenses that justify a rent increase.

Repossession of a dwelling by a landlord

There is only one exception to the right to maintain a dwelling: repossession by the owner.
A landlord may take back one of his dwellings to house himself, his children, parents or any other relative or ally of whom he is the main breadwinner. They may also take back a unit to house a spouse for whom they remain the primary supporter after separation, divorce or dissolution of a civil union.

In order to take over a dwelling, the landlord must notify the tenant in writing and respect certain deadlines depending on the length of the current lease. In the case of a lease of more than 6 months, the landlord must send a notice to the tenant 6 months before the end of the lease. In all cases, the repossession is only effective at the end of the lease. If the tenant does not respond, it is considered a refusal to vacate the unit, so the landlord must apply to the TAL within one month of the refusal or expiration of the tenant’s response time to request repossession of the unit.

The landlord may therefore repossess his or her unit through this process EXCEPT if the tenant is a person over 70 years of age, has been occupying the property for more than 10 years, and has an income at or below the maximum income eligibility for low-income housing. The exception to this is if the owner is himself a person over 70 years old, wishing to take over his property to house himself or a person of that age.

You are an owner or a tenant ? Contact our real estate brokers to enlighten you on the subject.

Read more from our real estate blog

L’article Lease renewal : what you need to know est apparu en premier sur Courtier Immobilier Montréal Yanick E Sarrazin.

]]> Prohibition on the Purchase of Residential Property by Non-Canadians Act https://yanicksarrazin.com/en/immobilier/news/prohibition-on-the-purchase-of-residential-property-by-non-canadians-act/ Wed, 29 Mar 2023 11:00:58 +0000 https://yanicksarrazin.com/?p=34081 Prohibition on the Purchase of Residential Property by Non-Canadians Act The Government of Quebec outlined many housing measures in its last budget. These measures included the introduction of Bill 5, which prohibits the dual agency of a real estate broker. This new law was introduced on June 10, 2022. But it was only a few […]

L’article Prohibition on the Purchase of Residential Property by Non-Canadians Act est apparu en premier sur Courtier Immobilier Montréal Yanick E Sarrazin.

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Prohibition on the Purchase of Residential Property by Non-Canadians Act

The Government of Quebec outlined many housing measures in its last budget. These measures included the introduction of Bill 5, which prohibits the dual agency of a real estate broker. This new law was introduced on June 10, 2022. But it was only a few weeks later, on June 23, 2022, that the bill entitled the Prohibition on the Purchase of Residential Buildings by Non-Canadians Act was introduced this time by the federal government. This latest real estate law will come into force on January 1, 2023 and is already causing many questions. Here is some information that we hope will help you better understand this new legislation and its impact on the real estate community. 

Why introduce a Prohibition on the Purchase of Residential Properties by Non-Canadians Act?

This legislation was designed by the federal government to reduce inflation and stabilize the housing market following the pandemic. With the introduction of this law, a more precise framework and regulations on the role of foreign investors will be highlighted. That way, there could be better control over foreign investment and also to facilitate access to properties for Canadians. 

What is this new law?

This new law, known as temporary, prohibits non-Canadians (foreigners and non-Canadian businesses) from acquiring residential properties in Canada for two years, until December 31, 2024. Direct or indirect purchases (through corporations, trusts or others) are prohibited. 

To whom does the prohibition on the purchase of residential buildings apply?

This prohibition applies to non-Canadians. Canadian citizens are therefore not subject to this prohibition.  A non-Canadian is defined as an individual other than a Canadian citizen. This also includes publicly traded companies and entities that are not subject to federal and provincial laws and controlled by a non-Canadian.

Who could be exempted from this prohibition on the purchase of residential properties by non-Canadians?

– Canadian citizens

– Permanent residents 

– Foreign students who are going to obtain permanent residence: the latter must meet the following criteria: during the 5 years preceding the purchase, the buyer must have filed his tax returns in accordance with the Income Tax Act. During this same period, he must have been present on Canadian soil for a minimum of 244 days. In addition, the coveted property must not exceed $500,000.

– Persons holding a work permit must meet the following criteria: their work permit must be valid for 183 days or more from the date of purchase. In addition, they must not have purchased more than one residential building.

– A non-Canadian purchasing a property with their Canadian spouse/common-law partner

– People fleeing an international crisis

What types of residential buildings are covered by this act?

– Individual houses

– Semi-detached houses

– Condominiums (divided and undivided)

– The duplexes

– The triplex

– Other similar properties

These residences are primary residences. Secondary residences, as well as vacant land zoned for residential or mixed use, would be excluded from this prohibition. Non-Canadians could then purchase the land and use it for any purpose, such as residential development.

What are the penalties if the Prohibition on the Purchase of Residential Properties by Non-Canadians Act is not complied with?

Significant penalties may apply if a non-Canadian acquires a residential property in Canada. The same applies to any person who advises and provides assistance to that person. These individuals will be convicted and will face costly fines of up to $10,000. 

In the event that a person is convicted, an order to sell the property may also be sought. In this case, the sale price of the illegally purchased property could not exceed the purchase price of the property. Therefore, no monetary benefit could be obtained. 

What is the real estate broker’s role in enforcing the prohibition against a non-Canadian purchasing a residential property?

The real estate broker must have a perfect knowledge of this new law and will have the role of transmitting all information about it to his clients (Canadians and non-Canadians). A brokerage practice based on transparency will be all the more necessary. 

The real estate broker will also have the role of acting with integrity because, as mentioned above, any assistance given to a non-Canadian regarding the purchase of a residential property may be sanctioned. It is then important for the real estate broker to understand all the particularities of this law in order to always act with honesty and morality. 

There are a lot of conversations about the prohibition on the purchase of residential properties by non-Canadians Act. On January 31, 2023, a Superior Court judgment was issued. It mentioned that this law would not apply to non-Canadians whose offers to purchase were accepted before January 1, 2023. Clarifications were then made on the matter. Although a certain amount of information on this law has been revealed, other questions remain. The law will not be enforced until January 1, 2023. The government will still have to clarify the issue of exceptions for the types of residential properties and other specific situations that would not be part of the prohibition. Clarifications will be made in the coming months.

Synopsis

The Prohibition on the Purchase of Residential Real Property by Non-Canadians Act was passed on June 23 and will come into force on January 1, 2023. This new law prohibits non-Canadians from acquiring a residential property in Canada for two years. In addition to Canadian citizens who are not covered by this act, the main people who could be exempted from this prohibition on the purchase of residential properties are permanent residents, those in the process of becoming permanent residents and those with work permits. The residential buildings concerned in this law refer to single and semi-detached houses, condominium dwellings (divided and undivided) and buildings of one to three units (duplex and triplex). The penalties are severe if a non-Canadian purchases a residential property in Canada. It is the same for the person who will help him. Being found guilty and having to pay a fine of up to $10,000 are among the main consequences of this offense. With the arrival of this new law, it is important that real estate brokers are familiar with the specifics of this new change in real estate and pass this information on to their current and potential clients. Integrity and compliance with the law are also important to ensure a transparent brokerage practice.

Questions about this new law? Contact one of our real estate brokers to find out more

Consult other real estate news

L’article Prohibition on the Purchase of Residential Property by Non-Canadians Act est apparu en premier sur Courtier Immobilier Montréal Yanick E Sarrazin.

]]> End of dual agency: bill 5 https://yanicksarrazin.com/en/immobilier/news/end-of-double-agency-bill-5/ Wed, 24 Aug 2022 22:03:14 +0000 https://yanicksarrazin.com/?p=22225 End of dual agency : bill 5 – Key Information This article was updated on August 24, 2022.  Bill 5 Given the current overheated real estate environment and in the interest of better protecting buyers in a real estate transaction in Quebec, Bill 5 was passed by the National Assembly. This amendment to the Real […]

L’article End of dual agency: bill 5 est apparu en premier sur Courtier Immobilier Montréal Yanick E Sarrazin.

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End of dual agency : bill 5 - Key Information

This article was updated on August 24, 2022. 

Bill 5

Given the current overheated real estate environment and in the interest of better protecting buyers in a real estate transaction in Quebec, Bill 5 was passed by the National Assembly. This amendment to the Real Estate Brokerage Act was adopted on June 10, 2022. Bill 5 involves various tax measures, but also measures related to the real estate market. It prohibits, among other things, the dual agency of a real estate broker with a buyer and a seller for a residential immovable, as well as the verbal brokerage contract. These measures would then avoid a potential conflict of interest.

With the arrival of this new law, many questions arise. What exactly does this law consist of? What are the benefits for buyers? Does it have any exceptions regarding its application? What are the advantages of the brokerage purchase contract for buyers? What is the opinion of our team’s real estate brokers regarding this important change?

Implications of the prohibition of dual agency

As mentioned previously, Bill 5 prohibits a real estate broker from representing a buyer and a seller at the same time in a transaction involving a residential immovable property. A real estate broker is licensed by the Organisme d’autoréglementation du courtage immobilier du Québec (OACIQ). The broker works with his client, must protect his interests and ensure loyalty. Respect for confidential customer information is essential. In a case of dual agency, these obligations cannot always be fulfilled and can give rise to major conflicts of interest, hence the importance of the establishment of this law.

The real estate broker must then represent only one part of the transaction (the buyer/the seller or the tenant/the lessor), thus ensuring a fairer treatment vis-à-vis the buyer.

The prohibition of dual agency is also combined with the prohibition of the verbal purchase brokerage contract. A written purchase brokerage contract must then be established between the buyer and the real estate broker in order to formalize the transaction.

If a case of dual agency occurs, i.e. a real estate broker is bound by a sale brokerage contract and a purchase brokerage contract, he must then notify the buyer in writing as to the termination of the purchase contract. As soon as this writing is sent, the termination of the purchase contract takes effect. The broker will then have to recommend a new real estate broker to this buying client. However, the buying client can choose not to be represented by anyone and make the decision they desire for the rest of the real estate transaction. If this is the case, the real estate broker must grant him fair treatment.

The concept of fair treatment is fundamental here. The real estate broker must inform the unrepresented buyer with objectivity. Indeed, the broker must demonstrate the accuracy of the information transmitted and indicate to the buyer any adverse elements concerning the desired property. However, the representation of the buyer and the defense of his interests are not possible without the signature of the purchase contract. In this case, the real estate broker will work in collaboration with the broker-seller. 

Dual agency exceptions

It should be noted that the OACIQ will establish certain exceptions with regard to compliance with the law of double agency. For example, for certain regions of Quebec that would be underserved, real estate brokers in that region would be authorized to represent buyers and sellers. Additional exceptions are expected in the coming months.

New real estate broker roles in a transaction

Broker-Seller: The broker-seller is the real estate broker who is bound by a Brokerage Sale Contract (BSC) with a seller. Since the broker has a signed contract, he must represent his client’s interests. 

Broker-Buyer: The broker-buyer is the real estate broker who is bound by a Brokerage Purchase Contract with a buyer (BPC). He can therefore represent the buyer and must defend his interests.

Broker-Collaborator: The broker-collaborator is the real estate broker who accompanies the buyer in the transaction, but is not bound by a brokerage purchase contract (BPC). As mentioned above, the broker-collaborator must work in collaboration with the broker-seller and cannot represent the buyer and his interests.

Brokerage purchase contract: what are the benefits for buyers?

Among the new obligations of this law, the brokerage purchase contract became mandatory as of June 10, 2022. In order to formalize the agreement between the buyer and the broker, the purchase contract must be signed by both parties. Signing this type of brokerage contract has many advantages for buyers:

  • Representation: the buyer can be represented by the real estate broker and the latter can defend his interests.
  •  
  • Personalized service: the buyer benefits from the custom search carried out by the broker (such as the creation of a portal of properties to visit). The buyer will also be better protected with regard to his personal information and interests.
  •  
  • Access to comparables: the buyer has access to market comparables obtained by the real estate broker’s expertise and the tools at his disposal.
  •  
  • Advice: The buyer receives advice and recommendations based on their needs and criteria throughout the purchase process. This advice will allow him to have a better knowledge of the situation (for example: are we in a situation of multiple offers) and in the real estate market more generally. 
  •  
  • Negotiation: the buyer is represented by his broker during the negotiation. The real estate broker’s negotiation skills will allow the buyer to acquire the desired property at a fair price and to stand out in multiple offers. 
  •  
  • Writing the promise to purchase: the buyer is advised by the broker on the conditions and clauses to be added to the promise to purchase in order to be further protected and distinguished. 

Dual agency exceptions

The OACIQ has established certain exceptions regarding compliance with the dual agency law.

-For certain areas of Quebec that would be underserved, real estate brokers in that area would be allowed to represent buyers and sellers. 

-A seller and a buyer can be represented by two brokers from the same real estate agency.

-For residential buildings with more than 5 units and commercial buildings, the brokerage purchase contract is not mandatory. The end of dual agency does not apply here. 

Summary

Bill 5 was adopted by the National Assembly and involves changes to the law on real estate brokerage. These changes have been in effect since June 10, 2022. Among other measures, this new law prohibits the dual agency of a real estate broker with a buyer and a seller for a residential building. It also indicates that in order to formalize a transaction, a written brokerage purchase contract must be established between the two parties. Certain exceptions to this dual agency will be granted, such as in small regions of Quebec where there is a deficit of real estate brokers. It also states that in order to formalize a transaction, a written brokerage purchase contract must be established between the two parties. With the mandatory purchase brokerage contract, this reduces potential conflicts of interest that can arise when a real estate broker represents a buyer at the same time as a seller. In addition, this provides additional protection to the buyer, strengthens the relationship of trust and loyalty between the two parties. 

*The use of the pronoun “He” was used to lighten up the text.

Questions? Contact one of our real estate brokers to enlighten you on the subject

L’article End of dual agency: bill 5 est apparu en premier sur Courtier Immobilier Montréal Yanick E Sarrazin.

]]> Raise in key interest rate: its impact on mortgages and the real estate market https://yanicksarrazin.com/en/immobilier/news/raise-in-key-interest-rate-its-impact-on-mortgages-and-the-real-estate-market/ Thu, 10 Mar 2022 21:35:16 +0000 https://yanicksarrazin.com/?p=24783 Raise in key interest rate – Key informations In our current context of pandemic and real estate market overheating, the threat of an increase in the key interest rate has been hovering for several months. Recently, the Bank of Canada raised the rate to 0.50%. This interest rate had not increased since the beginning of […]

L’article Raise in key interest rate: its impact on mortgages and the real estate market est apparu en premier sur Courtier Immobilier Montréal Yanick E Sarrazin.

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Raise in key interest rate - Key informations

In our current context of pandemic and real estate market overheating, the threat of an increase in the key interest rate has been hovering for several months. Recently, the Bank of Canada raised the rate to 0.50%. This interest rate had not increased since the beginning of the COVID-19 pandemic in 2020.

Many questions and uncertainties remain about the impact of this rate fluctuation on the real estate market. To shed some light on the key interest rate and its influence on the real estate market, we spoke with Mahsa Mirzaie, Director of Mortgage Development at National Bank. 

Why does the Bank of Canada increase the key interest rate?

The objective of raising the key interest rate is to curb inflation around the world by reducing borrowing costs and encouraging savings. It is important to understand that at the beginning of the pandemic, the key interest rate was reduced three times to reach 0.25% to stimulate the economy. This rate, reached in March 2020, had never been so low, allowing the economy to recover.

Changement des taux à un jour de la Banque du Canada depuis 2010

Source : la Banque du Canada

How does the increase in the Key Rate affect mortgage interest rates?

When central banks raise their interest rates, the base rate of chartered banks (such as the National Bank of Canada, the Bank of Montreal, the Royal Bank of Canada) also increases, because it costs them more to finance themselves. The consequence is that several bank products with interest rates increase, such as mortgage interest rates, rates on credit margins, and other products with variable interest.

How does this affect current and future bank customers?

Existing customers

Customers that already have a fixed-rate mortgage, the interest rate will not be affected by this increase until their mortgage is renewed. The rate is set for the duration of the contract. When the contract is renewed, the new rates take effect. 

Customers that already have their mortgage with a variable interest rate will have to expect a rise as fast as the following month.

Future customers

Now, for customers who are currently looking for a mortgage, it is recommended to do a pre-approval with rate guarantee as soon as possible. Indeed, despite the fact that there has been a first increase in the key interest rate, according to the forecasts, future increases in interest rates are to be expected. We must then protect ourselves against them.

What is the impact of the increase in the key interest rate on the real estate market?

According to Yanick E. Sarrazin, the team’s chief real estate broker, although the real estate market has been very interesting for several years, it should not be forgotten that the evolution of this market depends on the relationship between supply and demand. A disparity therefore creates an upward or downward impact on property prices. 

Higher rates are expected to result in fewer buyers, which could reduce or stagnate future increases in property values. Some may think that this could lower the price of houses in Montreal. Mr. Sarrazin’s opinion differs since the average prices of properties in Montreal have not witnessed a loss in value in the past decades. Indeed, Mahsa Mirzaie, adds that it would be unlikely unless we find exorbitant rates at 5-6% as those before the year 2000.

What would be your advice for today’s buyers?

Historically speaking, real estate remains a good investment in the long term considering that properties increase in value over time.

However, many are wondering whether it is better to acquire a property right now or to wait, given the situation. From an investment point of view, it would be wiser not to wait to purchase a property given that the prices of properties have always seen an increase, strong or weak.

That being said, a mortgage broker understands that each individual’s situation varies. The financial stability of the buyer is a key element, hence the importance of a mortgage broker assessing one’s financial situation. This analysis can then provide an overall picture of the individual’s income, borrowing capacity and repayment capacity.

Once the financial analysis is done, it is also important to target the objective of the purchase, as the strategy to adopt will be different. For example, is the purchase for a primary residence? There will then be no tax impact on the sale unlike a purchase of a rental property, in this case, the strategy of cash damming will be interesting.

Since it can take a long time to acquire the desired property, it is recommended to do a pre-approval with guaranteed rates with the longest period possible. This then ensures no fluctuation of the rate for a fixed period.

Depending on the objectives of your real estate purchase, there are multiple strategies and can be complex, hence the importance of getting in touch with a mortgage broker who will advise you and guide you towards the right direction.

This article was written in partnership with Mahsa Mirzaie, mortgage development manager at National Bank.

Mahsa Mirzaie - Prêts hypothécaires - Immobilier

Consult other real estate news

Any questions? Contact one of our real estate brokers.

L’article Raise in key interest rate: its impact on mortgages and the real estate market est apparu en premier sur Courtier Immobilier Montréal Yanick E Sarrazin.

]]> Demystifying the goodwill in Quebec https://yanicksarrazin.com/en/immobilier/news/demystyfying-the-goodwill-in-quebec/ Wed, 28 Jul 2021 20:28:34 +0000 https://yanicksarrazin.com/?p=18614 Demystifying the goodwill in Quebec – Key informations What is a goodwill? A goodwill is a legal concept present in various countries such as Belgium or France. But this commercial notion is quite ambiguous and can lead to misunderstandings. In Quebec, what exactly is a goodwill? https://www.youtube.com/watch?v=rbS26JFzQDw&ab_channel=%C3%89quipeYESARRAZIN A goodwill In Quebec, a goodwill refers to […]

L’article Demystifying the goodwill in Quebec est apparu en premier sur Courtier Immobilier Montréal Yanick E Sarrazin.

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Demystifying the goodwill in Quebec - Key informations

What is a goodwill?

A goodwill is a legal concept present in various countries such as Belgium or France. But this commercial notion is quite ambiguous and can lead to misunderstandings. In Quebec, what exactly is a goodwill?

A goodwill

In Quebec, a goodwill refers to an intangible asset, which means that it is not tangible. A goodwill is characterized by the combination of intangible and tangible elements that the trader owns in order to operate a commercial or industrial activity. These elements then make it possible to attract customers and retain them. A goodwill will be different depending on the commercial activity. However, the walls of the building, the receivables and the debts are not part of the goodwill. The legal regime will then be different when the business is sold.

Tangible elements

Tangible elements are elements that have a material existence. They refer to fittings, equipment and stocks that are related to the activity of the business. These are also the goods intended for sale. For example, if the business is a restaurant, the physical items could be chairs, tables, kitchen equipment etc.

Intangible elements

Intangible elements are elements that have no material existence. In a business, they can designate the trade name or trade sign, the various operating licenses and its reputation. However, it is the clientele and the right to lease that have the greatest value in a goodwill. 

Fonds de commerce restaurant Montréal

Its main components

The clientele

When buying a goodwill, customers are very important. Indeed, a goodwill could not exist without its customers. A clientele refers to all of the people who do business with the business. It must be autonomous and suitable for commerce. If the clientele evolves, the goodwill will also evolve. If the customer base is not exploited, the business will decline.

If too big changes take place, the clientele of the goodwill will change and this will reveal the birth of a new goodwill. But a cessation of activities in the business would make the clientele disappear and then the goodwill itself. The operation or non-operation of the business therefore determines the existence of the goodwill.

Traffic

Traffic is also an important component of a goodwill. Traffic refers to a transient clientele or a local clientele of the fund. Despite the fact that traffic does not refer to a goodwill’s own clientele, it is still important. Indeed, the higher the turnover of the business, the more traffic there is.

The right to lease

The right to lease refers to the right of the owner of the goodwill to carry out his commercial activities within the walls of the business, that is to say to become a tenant of the walls, until the termination of the lease. The acquirer of the business will then benefit from this right to the lease.

Sale of a goodwill

When selling the goodwill, you have to define the type of business. Is it a corporation or a business?

If it’s a corporation, you can buy the business and the shares go to the transferor.

If it’s a business, then you have to buy the entire business.

A broken down promise to purchase

After determining the type of business, all the elements of the goodwill must be broken down, that is to say to divide the expenses and the costs, on the promise to purchase. This is particularly important given the different activities that are possible in a goodwill. For example, when a buyer buys a clothing store, he buys his inventory. In this case, there are established prices for the goods or inventory. However, these prices will be paid separately, as the inventory is not stable over time and is constantly changing depending on the seasons.

A negociated agreement

Following the breakdown of the offer to purchase, a price agreement is negotiated between the seller and the buyer. Different steps must be taken such as the transfer tax, being the payment related to the change of ownership or the deed of assignment.

Before the signing of the deed of assignment, the seller must be responsible for having paid all his debts, works and various obligations related to the goodwill. After the signing of the deed of sale, the buyer is the new owner and will be responsible for all future expenses related to his commercial activity.

Purchase of a goodwill

Sustainability

When buying a goodwill, the majority of sellers want buyers to sign a new lease. Thus, sellers will not be held responsible for buyers. On average, a business requires a lot of time and money (in renovation, decoration, etc.). A buyer therefore wants to operate his goodwill for a period of at least five years.

The staff

As mentioned earlier, buying a goodwill means acquiring its clientele, but also having access to the staff and suppliers. It is the buyer’s choice whether to keep existing staff or not. However, it is important to remember that the loyal clientele of a business is often attached to its staff. The complete dismissal of staff or too drastic changes in the trade could then make the clientele insecure and even make it disappear. You must therefore make wise choices, because why change a winning formula!

Contact one of our commercial real estate brokers to help you with your sale or purchase of a goodwill.

Contact one of our real estate brokers

L’article Demystifying the goodwill in Quebec est apparu en premier sur Courtier Immobilier Montréal Yanick E Sarrazin.

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