Advice for buyers

Mortgage pre-approval: the first step in your purchasing project!

18 April 2024

Depuis le 10 juin 2022, une législation révolutionnaire sur le courtage immobilier au Québec est entrée en vigueur, transformant radicalement la manière dont les courtiers immobiliers s'engagent dans le processus d'achat de leurs clients. Cette nouvelle loi proscrit expressément aux courtiers immobiliers de représenter à la fois l'acheteur et le vendeur au cours d'une même transaction, considérée comme un conflit d'intérêts manifeste.

Ready to buy?

For many Quebecers, the purchase of a property represents a crucial – and often the most important – moment in their financial lives. To successfully navigate this complex process, loan pre-approval is an essential step. But why is it so critical, and how can it really benefit the buyer on the real estate market?

The Key to Accessing the Real Estate Market

Loan pre-approval is more than just a formality. It is a careful assessment by a financial institution of a potential buyer’s borrowing capacity. It provides an accurate estimate of the amount the bank is willing to lend, based on a detailed analysis of the buyer’s financial situation, credit and income. By establishing a clear budgetary framework from the outset, it clears the way for the property search and greatly facilitates the buying process.

Strategic benefits in a competitive market

In an often dynamic and competitive Quebec real estate market, being pre-approved confers an undeniable strategic benefit. Sellers and their brokers give greater credibility and consideration to offers from pre-approved buyers. This approach demonstrates not only the buyer’s seriousness, but also his or her solvency – decisive factors in transactions where competition is fierce.

Save Time and Clarity

Another crucial aspect of pre-approval is the time and clarity it saves buyers. By knowing exactly how much they can borrow, they can focus their search solely on properties within their budget, avoiding the disappointment and wasted time associated with looking at properties beyond their financial reach. This focus makes it possible to refine search criteria and optimize the chances of finding the ideal property.

Negotiate better

Pre-approval also confers a significant negotiating leverage. Buyers with pre-approval in hand can submit purchase offers with greater confidence, strengthening their position in the talks. This puts them in a better position to obtain additional concessions from sellers, particularly if the latter are in a hurry to close the deal or if the market is particularly competitive.

Getting ready for market realities

It’s important to note that pre-approval is not an absolute guarantee of financing. It is often conditional on final loan approval following signature of a promise to purchase. However, it does offer a solid indication of borrowing capacity, helping buyers to better anticipate market realities and adjust their expectations accordingly. By anticipating financial contingencies, buyers can make informed decisions and navigate the buying process with confidence.

Conclusion

In conclusion, loan pre-approval is a powerful and indispensable tool for any real estate buyer in Quebec. It clearly establishes financial expectations, strengthens the negotiating position and enhances credibility with sellers. In an ever-changing and often competitive real estate market, having this tool at your disposal is an enlightened and strategic decision to ensure the success of your real estate project and make your dreams of home ownership a reality.

Always get the best possible representation!

Your broker will explore all options: from homes listed by other brokers via Centris, to those sold directly by owners on DuProprio, Publi-Maison, and LesPAC, to properties from finance takeovers or estates. This way, you’re sure not to miss any opportunities that might be of interest to you.