Real Estate Talk:
Second home opportunities
Now may be an opportune time to purchase a second home as there may be deals to be had
By Joseph Marovitch
June 23, 2022
Inflation is now over 7%, and interest rates are still rising. These two factors, propelled by war in Europe and a lingering pandemic, are the main reasons we are in this surreal situation. However, there is a feeling among Quebecers, especially the younger ones, that all is almost normal.
As such, those who moved away from the city to escape the large crowds are now in the process of moving back. As well, high-interest rates and inflation are motivating some to sell their homes as the carrying costs suddenly increased. Therefore, we are seeing more listings both in the city and country.
High-interest rates and inflation are motivating some to sell their homes as the carrying costs suddenly increased. Therefore, we are seeing more listings both in the city and country.
For those with a little cash on hand, now may be an opportune time to purchase a second home as there may be deals to be had. New home listings have increased for the fifth straight month in Montreal due to rising carrying costs.
With rising supply, prices drop. However, it should be noted that prices will not remain down. Prices will rise again, not as quickly as during a pandemic, but they will rise. Right now, there is a dip in the real estate market, which makes this a good time to buy.
Most buyers in the market for a second home are searching for a getaway location in nature with privacy and peace. Therefore, buyers are searching for homes by the lake or with an incredible mountain view, not in the city but not too far away either.
The issue with a second home with a lakefront or mountain top is that these properties are not supplied by the municipalities they are located in regarding water and septic supply.
When purchasing a lakefront or mountaintop property, buyers must be aware of the following:
‘All these issues can be arranged by an experienced real estate broker working in the field of second homes.’
- Depth determines cleaning
- Is the well an artesian well or a shallow well?
- How often must it be tested and cleaned?
- What is the bylaw regarding cutting foliage by the water? Ex: how wide and how long?
- Is the water tested for bacteria such as the fecal count?
- Is the water safe to swim in?
- Are motorboats permitted or not?
- Does the lake have an exit and entrance, or is the water stagnant and filled with bacteria?
- During the buyer’s due diligence, the buyer must have the lake and drinking water tested.
- Is the septic tank in good condition, or is it leaking into the ground?
- Is the tank the proper size for the number of bedrooms in the house?
- Must the tank be cleaned every two or four years? (Generally, second home tanks must be cleaned every four years and primary residence every two years.)
- Buyers must acquire proof that the septic tank was recently cleaned or place a condition in the promise to purchase stating the seller will clean the septic tank before possession.
- Buyers must also acquire proof that the septic tank meets city bylaw specifications.
- How often is the fireplace cleaned?
- When was the last time it was cleaned?
- Buyers must acquire proof that the fireplace was recently cleaned or place a condition in the promise to purchase stating the seller will clean the fireplace before possession.
These are some but not all the issues to be examined in a purchase. All these issues can be arranged by an experienced real estate broker working in the field of second homes.
As well, consider that buyers for second homes come from the city. They are not local buyers. Therefore, the best brokers to use to sell a second home are from the figurative “well” where the buyers come from. If one is lucky enough to find a city broker with the expertise and contacts for second homes, the process is that much easier.
Should you have questions or comments, please refer to the comments section at the bottom of the page. As well, to view past articles, click here.
Next article: Is there an opportunity in the real estate market?
State of the market
As of June 23, the consumer price index or rate of inflation hit 7.5%, according to Quebec statistics. The 5-year fixed closed interest rate at TD is 5.14%, and the Fed plans on more hikes.
All this news is difficult in the short term for homeowners. Those that can afford to maintain their homes with increased cost will get through to the day the market normalizes.
‘Rising costs mean more and more homes will enter the market and with the increased supply, prices will drop.’
Rising costs mean more and more homes will enter the market and with the increased supply, prices will drop. In the stock market, this is known as an opportunity to buy because, like the stock market, prices go back up. In our particular situation in Montreal, prices, in my opinion, will bounce back and continue to rise as in any city surrounded by water and with passing time.
Have a great week, and stay safe.
Let’s not forget that people with cancer are vulnerable too!
You are invited to keep giving to the following organizations since it’s now more important than ever to support cancer research! Click on the logos below to find out how:
Feature image: Alex Staudinger
Joseph Marovitch has worked in the service industry for over 30 years. His first career was working with families from Westmount and surrounding areas, hosting children between the ages of 6 to 16 as the owner and director of Camp Maromac, a sports and arts sleep away summer camp established in 1968. Using the same strengths in caring for the families, such as reliability, integrity, honesty and a deep sense of protecting the interests of those he is responsible for, Joseph applies this to his present real estate broker career. Should you have questions please feel free to contact Joseph Marovitch at 514 825-8771, or firstname.lastname@example.org