The 7 Steps of the Home Buying Process in Quebec
Buying property in Quebec is a structured process governed by the Civil Code of Quebec and supervised by the Autorite des marches financiers (AMF) for mortgage brokers and by the Organisme d'autoreglementation du courtage immobilier du Quebec (OACIQ) for real estate brokers. For first-time buyers, understanding each step helps navigate the journey with confidence and avoid costly mistakes. Here is a detailed guide to the seven key stages, from pre-qualification to taking possession.
Step 1: Mortgage Pre-Qualification and Pre-Approval
Before you even begin visiting properties, it is essential to obtain a pre-qualification or, ideally, a mortgage pre-approval. Pre-qualification is an informal estimate of your borrowing capacity based on information you provide verbally. It does not require a credit check and does not represent a lender commitment. Pre-approval, on the other hand, is a formal process: the lender verifies your credit file with Equifax or TransUnion, analyzes your income and debts, and confirms a maximum amount along with a guaranteed rate for 90 to 120 days.
The Office of the Superintendent of Financial Institutions (OSFI) imposes strict debt service ratios. The gross debt service (GDS) ratio must not exceed 39%, and the total debt service (TDS) ratio is capped at 44%. In addition, OSFI's B-20 guideline requires all borrowers to qualify at the stress test rate, which is the contract rate plus 2% or 5.25%, whichever is higher. This step is crucial because it determines your real budget and positions you favourably with sellers.
Step 2: Property Search
Property search is typically conducted through a real estate broker who is a member of the OACIQ or via online platforms such as Centris. A real estate broker assists you with neighbourhood selection, viewings and comparative market analysis. For first-time buyers, it is wise to clearly define your criteria: proximity to work, school quality, access to public transit, resale potential and overall property condition. Keep in mind that the listed price is only the starting point; closing costs, potential renovations and property taxes must be factored into your overall budget.
Step 3: The Purchase Offer
The purchase offer (promesse d'achat) is the central legal document of the transaction. In Quebec, it is governed by the Civil Code and uses standardized OACIQ forms. It is a contractual commitment that typically includes suspensive conditions: a financing condition (10 to 21 days to obtain firm approval), an inspection condition (a deadline for a satisfactory report) and sometimes a condition requiring the sale of an existing property. The deposit, generally $1,000 to 5% of the purchase price, is held in trust by the real estate broker or the notary.
Step 4: Pre-Purchase Inspection
Although not mandatory in Quebec, a pre-purchase inspection is strongly recommended. Conducted by a qualified building inspector at a cost of $500 to $1,000, it covers the structure, roofing, plumbing, electrical, heating, ventilation, insulation and foundations. The inspection report identifies existing and potential problems, allowing you to negotiate the price or withdraw if major defects are discovered while your inspection condition remains active. The Civil Code of Quebec provides a legal warranty against hidden defects (art. 1726 C.c.Q.), but proving a hidden defect after purchase is a lengthy and expensive process.
Steps 5 to 7: Financing, Notary and Taking Possession
- Financing confirmation: Once the inspection condition is waived, your file moves toward final approval. The lender completes its analysis, orders a property appraisal if necessary, and issues a formal mortgage commitment. If your down payment is less than 20%, you will need mortgage loan insurance from CMHC, Sagen or Canada Guaranty, with premiums ranging from 2.80% to 4.00% of the borrowed amount.
- Notary appointment: The notary performs title searches at the Quebec Land Register, verifies the absence of problematic charges or servitudes, reviews the certificate of location (updated within the last 10 years), prepares the deed of sale and the mortgage deed, and proceeds with signing alongside all parties. Notary fees typically range from $1,500 to $3,000.
- Taking possession: On the day of signing at the notary's office, after the lender disburses the funds, the buyer receives the keys to their new property. Transfer duties (welcome tax) will be billed by the municipality in the following weeks or months. You should also budget for property tax adjustments, home insurance and moving expenses.
First-Time Buyer Programs in Canada
Several government programs make homeownership more accessible for first-time buyers in Canada. The Home Buyers' Plan (HBP) allows you to withdraw up to $35,000 from your RRSP tax-free, with repayment over 15 years. The First Home Savings Account (FHSA) lets you contribute up to $8,000 per year, with a lifetime maximum of $40,000, and withdrawals for a first home purchase are tax-free. The First-Time Home Buyers' Tax Credit provides a fédéral credit of $1,500. While Quebec does not offer a land transfer tax rebate like Ontario, some municipalities provide incentives to attract new residents.