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The Steps to Buying a House in Australia

The Steps to Buying a House in Australia

March 26, 2024

Buying a house can be a fun but also a frustrating venture, especially if you’re a first-time home buyer in Australia. However, navigating the intricacies of the property market doesn’t have to be an overwhelming process. A little knowledge and good advisors can go a long way to making life easier.

Our conveyancers demystify the steps of buying a property, providing invaluable insights into “how to buy a house” and helpful tips especially if you are buying your first home.

If you are a first home buyer it’s essential that you’re well-informed and ready to make informed decisions, as things can move quickly.

We note that as conveyancers we are always here to help you at any stage of your property buying journey.

Understanding the Process to Buying a House in Australia

Step 1: Research and Planning

Research is crucial when contemplating “buying a house.” Begin by setting a realistic budget to determine what you can afford; this will be very helpful if you are bidding at auction.  Consider your long-term financial security and factor in potential changes in the market. It is important to understand how properties are valued and you can read more here.

Step 2: Getting Pre-Approved for a Mortgage

A crucial step in “how to buy a house” is securing finance. Approach lenders to obtain a pre-approval for a mortgage, which outlines how much you can borrow based on your financial situation. This gives you a concrete budget and shows sellers you’re a serious contender. Use online calculators to estimate your borrowing power and additional duties and taxes you need to pay. Each state across Australia has different stamp or land transfer duties and taxes. Be sure to factor in any Lender’s Mortgage Insurance or other fees.

Step 3: Property Hunting

Now that you have a clear budget set it’s time to attend open houses and start engaging with real estate agents. Keep a keen eye on the “what to look for when buying a house” by examining the property’s condition, location, and potential for appreciation. Get to know the local agents and let them know what you are looking for so they can send you anything suitable. Let them know you have a pre-approval and what you are looking for as well.

Step 4: Legal Checks and Balances

It’s important to hire a solicitor or conveyancer to manage the “process of buying a house.” BEFORE you sign a contract. Your conveyancer will give you practical advice as well as the legal aspects. If you have questions or need property searches, we are there to make sure you know exactly what you are purchasing.

Caveat Emptor, or BUYER BEWARE, puts the responsibility on the buyer to conduct their own investigations.

Step 5: Making an Offer

Once you are happy with the property and have legal advice, you will either be negotiating by private sale or bidding at auction. Make sure you understand the auction process and attend some auctions before you start bidding. Read more about the difference between a private sale and auction here.

Step 6: Signing the Contract & Paying a Deposit

If you are not attending an auction you are usually making an offer and signing a contract of sale. If the vendor accepts your offer, you need to pay a deposit to secure the property. Once you have a contract on foot you need to ensure you comply with your contractual obligations or you may be in default. This means either your deposit is a risk or you may have to pay penalties.

Don’t forget to get insurance at this stage. If you are in Queensland or other states, the property is now your responsibility. It is advised to get insurance regardless.

Step 7: Loan Application

Once you have a contract, it’s time to start or continue the loan application. Finance pre-approvals are only valid for 3 months. Keep this in mind as it can take some time if you need to provide updated financial records. A valuation will be conducted by the lender to ensure the property is worth the purchase price. Once the loan is formally approved then the loan and mortgage documents will be sent out to you.

Step 8: Pest and Building Inspections

For your peace of mind and as part of our “first home buyer tips”, have professional inspections done for building and pests. This ensures you’re not buying a property with significant issues, which can be expensive to rectify later.

Step 9: Settlement Period

Once the contract is unconditional the conveyancing process really gets underway between the seller and the buyer. In this period the parties to liaise with their banks; arrange finance/discharge of mortgages; exchange documents; conduct final checks; arrange moving-in details; and finalise the settlement amount. The length of the settlement period is negotiated between the buyer and seller but is usually between 45 to 90 days.

Step 10: Settlement Day & Moving In

You are now reaching the culmination of buying your house or investment property. On settlement day the parties’ banks and conveyancing teams exchange funds for the property title. Rates, fees and taxes are paid up at settlement day so that a “clear title” is transferred from the seller to the buyer without any outstanding rates or taxes owing.

Most settlements are now online and take around half an hour to complete. Once settlement is complete, the property is officially yours, and you can collect the keys and move into your new home!

Getting the right advice along the way

Whether you’re a seasoned investor or looking into buying a first home, it’s crucial to stay informed and prepared. Your conveyancer and broker is the only person in the process that is acting in your best interests. It is important to use them as they are a great resource and have seen most things.

From researching to settlement, we understand each step in the process of buying a house in Australia and can quickly provide expert conveyancing advice.

First home buyers require patience and to do a fair amount of due diligence when buying a house. For more “first home buyer tips,” read our articles or keep an eye on our latest updates and good luck with the house hunting!

 

Disclaimer: This article has been prepared for general information purposes and may not apply to your situation. This information should not be relied upon for legal, tax or accounting advice. Your individual circumstances will alter any legal advice given. The views expressed may not reflect the opinions, views or values of Conveyancing Depot and belong solely to the author of the content. © Conveyancing Depot Pty Ltd.

If you require legal advice specific to your situation please speak to one of our team members today.

About The Author

Here at Conveyancing Depot Lorilea is our Marketing Manager. She has a bachelor's degree in...