The purchase process
Buying a property is an important financial decision. Follow our simple guide to the purchase process so you know what to expect.
Steps to buying a property
Step 1: Decide what you want
So that you can focus your search for a suitable property, you need to have an idea of what you are looking for, how much you can borrow, what type of property you’d like to live in (for example, apartment or house) and where you’d like to live.
Step 2: Organise your finances
You should always make sure you have approval for a home loan before you make an offer or go to auction on a property. You can have your finances pre-approved while you search for a property so that you don't have any last minute hassles when you do find the property you are looking for.
Step 3: Find an experienced solicitor or conveyancer
You should find a solicitor or conveyancer to review the relevant body corporate and building inspection reports, review the purchase contract, arrange for inspections, and advise you on your loan documents. Be aware that the fees they charge can vary widely, so you should agree to the costs up front.
Step 4: Research and take time to look for a suitable property
You’ve decided what you want in Step 1, so now you need to search for a property that meets your criteria.
Step 5: Consider professional inspections
You should have building, strata and pest inspections performed by independent qualified professionals who have insurance. They may find issues with the property that need to be fixed, adding to the overall cost of your property.
Step 6: Making an offer on the property or going to auction
The most common ways of buying a property are:
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Private treaty through an agent, where you agree to a price set by the owner or negotiate another price
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Private treaty directly with the owner
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Auction
Step 7: Exchange of contracts
The solicitor or conveyancer you appointed in Step 3 will examine the contract carefully. If you choose to proceed with the purchase, a deposit will need to be provided and your solicitor or the agent will exchange the contracts. The deposit is usually 10% of the purchase price and these funds need to be available when you meet with your solicitor to sign the contract.
Step 8: First Home Owners Grant application
If you are a first home buyer, you can apply for the First Home Owners Grant. This may entitle you to a grant from the government and exemption for some stamp duty costs. As an incentive for first home buyers, most states and territories in Australia offer stamp duty concessions to first home purchasers. Your lender will be able to provide you with these details and the application forms, or you can download the application forms from the relevant office of state revenue website.
- NSW: www.osr.nsw.gov.au
- SA: www.revenuesa.sa.gov.au
- QLD: www.osr.qld.gov.au
- NT: www.revenue.nt.gov.au
- ACT: www.revenue.act.gov.au
- TAS: www.treasury.tas.gov.au/tax
- VIC: www.sro.vic.gov.au
- WA: www.osr.wa.gov.au
Step 9: Prepare a will
If you have not previously prepared a will, your solicitor may advise you to prepare one. Although this is not something we like to think about, owning a property is a substantial asset and it's important to nominate an Executor to manage your affairs should death occur.
Step 10: Settlement
Settlement occurs when you pay the balance of the selling price and all other outstanding fees. Once this has settled you can move in!
TIPs for first home buyers
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To work out how much you can accumulate for a property deposit based on how much you save weekly, fortnightly or monthly use our savings calculator.
- For more information see buying your first home.
Things you need to do before settlement
- Organise your home and contents insurance. This will need to commence midnight on the day before settlement. You will need to provide a copy of this insurance to your financier and your solicitor before settlement.
- You will need to arrange for the electricity, gas and or telephone services to be transferred into your name as from settlement date. Ensure you undertake this several days before settlement as you may need to enter into various supply contracts to obtain the relevant services.
- Undertake a final inspection of the property before you settle (as close to settlement date as possible). This way you can check to see that vacant possession is available and that no damage has been done to the property since the date of exchange.
- Advise your solicitor of the outcome of your final inspection.
- Organise a locksmith to be available to change the locks once you settle.
- Advised interested parties such as your bank, accountant, mobile phone provider etc that you have changed address.
