7 Steps To Buying a Home

The first steps to buying a home can be an exciting yet daunting time in your life. It’s one of those big moments that you’ll never forget, and it’s easy to feel overwhelmed when you start thinking about budgets, deposits, mortgages, interest rates, locations, and the list goes on. The good news is that once you wrap your head around the process of buying a home, you’ll feel more confident taking those first (and second) steps towards property ownership.

As conveyancers, we know this process inside out, so let us walk you through it. We’re going to cover:

• Working out your budget
• Searching for your first home
• Engaging a conveyancer or lawyer
• Making an offer
• Exchanging contracts
• Arranging inspections and due diligence
• Settlement and moving in

Step 1 – Work out your budget

Don’t worry; budgeting doesn’t have to be doom and gloom. The first step for buying a home is knowing how much you can afford to borrow and how much you can afford to repay on your loan either weekly, fortnightly or monthly. A big factor here is also how much deposit you can contribute to the purchase, as this will impact the size of the loan you need to buy your house. 

There are handy resources online that can help you with this step. Here are just a few:

Online Budget Planner

Savings Calculator

Home Loan Calculators

Home Loan Repayment Calculators

Start with your monthly net income, and then work out your monthly expenses. Subtract your monthly expenses from your monthly net income, and what’s left is how much you have to contribute to home loan repayments each month. 

Don’t forget that you can always talk to your bank or a mortgage broker. Getting pre-approval on your home loan will put you in an excellent position for buying a home.

Step 2 – Search for your home

With a firm understanding of your budget, searching for your home is the next step towards buying a home. 

You’ve got a few big things to take into consideration with this step, like:

• whether you want to buy an existing home, a new home or build a home
• the locations you’d like to consider looking for a home in
• researching those locations for things like transport, shops and schools

To get an idea of your preferred suburbs’ average prices, check out the local real estate guide in the paper or on realestate.com.au and domain.com.au. You’ll get a good feel for whether you can afford to live in the areas you’d like and what kind of house your hard-earned dollars can buy. 

Step 3 – Engage a conveyancer or lawyer

Before you start getting too serious and certainly before you pull the trigger and make an offer on a house, engage the services of a conveyancer or lawyer to guide you on the first steps of buying a home. Conveyancing is the legal process of buying and selling land. And many first home buyers make the mistake of waiting until they’ve exchanged contracts before they realise they need a conveyancer. You’re about to make one of the most important financial decisions of your life, so it’s wise to involve them early in the process. 

A conveyancer will support your first steps to buying a house by:

• Helping you research property and certificate of title
• Preparing documentation and answering any questions you have
• Checking for easements and other information you’ll need to know about the house
• Talking to you about your deposit and when you’re ready, popping it in a trust account
• Representing your best interests with the real estate agent and vendor
• Calculating stamp duty (where required) and other rates and taxes
• Walking you through any first home buyer government grants
• Conducting property settlement on your behalf and helping you get your keys!

There’s a lot to take on board when you’re buying a house, especially if it’s your first, so don’t be afraid to ring a few conveyancers and ‘interview’ them, so you’re confident you’ve got the right fit.

Step 4 – Make an offer

You’ve found the one! The location is perfect, the purchase price is within your budget, and it’s time to make an offer. You can negotiate on the asking price but be wary of being inflexible or going too low. The last thing you want is to be outbid because you’ve lowballed on a property worth more. 

And if negotiating makes you feel queasy, don’t be afraid to ask for help from more experienced family members or friends.  

To make an offer, you’ll need to put it in writing. This will be done via the contract of sale, an email or through an expression of interest process. 

Don’t be too disheartened if you miss out on the first property you put an offer on – it’s a tough market with lots of buyers often competing for the same home. And, if you’re got any questions about making an offer or what conditions should be included in the contract of sale – speak to your conveyancer or lawyer as quickly as you can.

Step 5 – Exchanging contracts

Congratulations – your offer was accepted! You’re only a few steps away from walking through the front door of your first home. There will be two copies of the sale contract – one for the buyer and one for the seller. Each party signs one copy before the two are swapped or “exchanged”. It’s becoming more and more common for this part of the process to be handled electronically using a platform like DocuSign.

Before you sign the contract, and if you haven’t already, consider engaging a conveyancer or lawyer to be confident your best interests are protected. For example, they’ll help you negotiate a ‘conditional contract’ that includes certain protections around finance approvals, what’s included with the property and what happens if the building or pest inspection returns something unexpected. They’ll also assist with coordinating your deposit and advise you on the next steps.

Step 6 – Organise inspections and do due diligence

It’s the buyer’s responsibility to organise and pay for pre-purchase building and pest inspections. In some cases, you’ll find companies that can undertake both inspections or your conveyancer or lawyer may be able to provide recommendations for inspectors in your local area. These inspections assess the overall condition of the property, looking for any structural or safety hazards and evidence of any pest infestations. There is a time limit for carrying out the inspections. Should anything unexpected turn up, speak to your conveyancer or lawyer regarding your options for having the seller address the issue before settlement or withdrawing from the sale if your contract is ‘subject to a building and pest inspection’. 

Your conveyancer or lawyer completes additional due diligence on the property by undertaking the searches required to check the property title, survey plans and rates. They’ll also be chatting to your lender about finance and negotiating on your behalf should you require any additional time for your finance approval to come through. 

Step 7 – Final inspection, settlement and move in!

You’re almost there! In the week leading up to your settlement day, organise a final inspection. It’s your last chance to check that the state of the property hasn’t changed in terms of any new damage, that it’s reasonably clean and tidy, and that the agreed inclusions have been left at the property. Your conveyancer or lawyer will talk to you regarding the settlement process, including settlement figures, and organise and attend settlement on your behalf. Like exchanging contracts, electronic settlement is now the usual approach for conveyancing. In fact, Deloitte Australia claimed that by 2022 the conveyancing industry would have moved to 100% e-conveyancing. Put simply – it’s more cost-effective, easier to use, and everything happens online. 

Now here’s the moment you’ve been waiting for – settlement is complete. You’ll be told that the keys are ready for your collection when the property is officially yours.

Congratulations again! Whether it’s your first home or your third, buying a home can be a stressful and emotional time. But, it’s all worth it.

We’ve given you an overview of the first steps for buying a home, but nothing can replace the confidence you’ll feel when you’ve got the right conveyancer. If you’ve got any questions regarding the buying process or you’re ready to get started in the property market, we’d love to help. We’re proud to offer personalised and expert advice every step of the way and invite you to call our team on (02) 4056 1070 or start your free conveyancing quote online.