First Home Buyer

Home is where love resides, memories are created, friends always belong, and laughter never ends.

Buying your first home is an exciting time, but one that’s also filled with questions. So, we’ve created this guide to give you an overview of how things work, make things simple, and ultimately get you into your first home sooner.

There are many things to consider in the home buying journey. A good place to start is getting up to speed with some of the key terms you’re likely to see.

Contract of Sale

This is the legal document that sets out the terms and conditions agreed between the buyer and seller.

Stamp Duty

This is a state and territory government tax based on the purchase price of the property. As it’s paid to the state or territory, the amount will vary depending on where you’re located as well as on the price of the property and other factors such as whether you’re a first home buyer or an investor.

Deposit

In most cases, you’ll need a deposit that equates to 20% of the property purchase price. If you’ve started saving, but still have less than a 20% deposit, there’s a number of options available that could help you buy a property sooner. Seek advice from your Bank or a Mortgage Broker in this regard.

Know your Budget

Making a budget is an important part of the buying process. Understanding how much you can borrow and what your repayments would be can help you plan for success. You’ll also need to consider how much money you need for everyday living expenses and other financial commitments. Your Bank or Mortgage Broker can help you to be confident with your plans, every step of the way.

Upfront Costs

On top of the deposit, you’ll need to consider other upfront costs involved in buying a property, which may include: Government fees, including stamp duty, Title search and registration fees, conveyancing and legal costs, building and pest inspections, home insurance prior to settlement, and possibly contents insurance when you move in.

Researching the Market

It’s a great idea to research the property market and the areas you’re considering. This initial groundwork can help you narrow your property search and make you a more confident buyer. Below are a few factors to consider:

  • Proximity to city
  • Public or community transport options
  • Parks and recreational grounds
  • Schools and shopping centres

Finance Approval

To give you a clear indication of how much you can borrow, with the help of your Bank or Mortgage Broker you’re able to obtain an Approval in Principle. This allows you to look for properties and narrow your search with confidence as you will:

  • Know the maximum amount you’ll be able to borrow and what deposit you may need.
  • Be perceived as a serious buyer by a real estate agent

Once an Approval in Principle is given, it is valid for 90 days from when it is approved. However, if you don’t find a property within this time, you may renew the certificate for a further 90 days by confirming your financial circumstances haven’t changed.

The Right Property

It’s such a great feeling when you finally find the property you want to buy and call home. Before you make an offer or attend the auction, it’s important you carry out all final checks on the property you like. Your Bank or Mortgage Broker can help by providing you with a Property Report for the home you’re interested in.

Research the Property

Always look at the property closely and make sure it meets your needs. It’s also a good idea to look at comparable properties in the area. Understanding what kind of properties are in demand and what they’ve sold for can help you negotiate the sales process with confidence. Ask your Bank or Mortgage Broker about specific property reports, which generally include estimated valuation and rental estimates, property history and other property attributes.

Committing

  • Before you commit to anything, it’s essential you do your homework. Here are a few of the big things to cover off:
  • Ensure a copy of the Contract has been reviewed by your Conveyancer and you understand the conditions of the sale.
  • Most states have a cooling off period, except for sales at auction which generally do not have a cooling off period.
  • If you want to conduct any building and/or pest inspections, talk to your real estate agent to arrange a time for these inspections to be conducted to ensure the property is in the condition as specified in the strata report and/or contract. A professional inspector can help identify hidden issues such as structural damage and termites – and determine how they may affect the property over time.
  • Double-check your chosen area’s zoning and whether it could be impacted by proposed developments that may affect your property long term. You may also need to identify the flood or fire risk for a property. This information can generally be found on the local council website.

Buying your Property

Some days it may seem like your search will never end, but once you find a place you love, it all feels worth it. Whether you’re making an offer, knowing what to do once it’s been accepted or getting across the settlement process, it’s important you understand the final stages of the buying process. A Conveyancer can help you navigate this part of the purchasing journey.

Making an Offer

Before you consider making an offer, it’s important to speak to your Bank or Mortgage Broker to ensure your Approval in Principle is still valid. Once you’re ready to make an offer on a property, you’ll find there are two main types of sales.

Auction - to express your interest as a potential buyer, you’ll need to register as a bidder on the day of auction. If you make the winning bid, you’ll need to sign the contract and pay a deposit, generally this is 10% of sale price, on the day.

Private sale - You negotiate the sale price with the seller. This is often done through the real estate agent and the negotiation process can take days or weeks.

Finalise your Finances

Once your offer has been accepted, your Bank or Mortgage Broker will need to finalise your home loan application and complete a property valuation. There are a number of documents required to formalise your loan approval.

Ahead of Settlement

You’re now on the home stretch! Property settlement is the legal process of transferring ownership of the property from the seller to the buyer and is facilitated by your Conveyancer and financial representatives and those of the seller. The ‘settlement period’, from when you sign the contract to when settlement is finalised, is generally 6 weeks, however, it can vary from 4–12 weeks depending on the agreement. This is a great time to prepare yourself for your new property, including organising:

  • Home Insurance
  • Speaking with utility providers (gas, electricity, internet etc)
  • Completing the final inspection of the property prior to settlement day Confirming the details of your settlement

Day of Settlement

Settlement day is a big milestone as this is the day you become the owner of your new property. Generally, the Conveyancer and financial representatives will meet on behalf of you and the seller to finalise the transfer of property ownership. Once this has been sorted, you’ll be the owner of your first property.