From reviewing your lifestyle needs to researching different postcodes and comparing your finance options, the Home Buying Guide takes you through the steps required to purchase a home in Australia.
Purchasing a home can be a complex and time-intensive process that demands research, due diligence and patience.
To help you navigate the home buying process, we've created a six-step guide that explains the process and key considerations associated with buying a new castle.
Whether you're in the market for your first home or you're an adept homeowner returning to the market, there is always something new to learn. With innovative technologies and a dynamic property market, there is a wealth of information available to you.
Read the Home Buying Guide as an entity or skip ahead to the section that tickles your fancy; it's up to you.
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Lifestyle check
In this introductory section, we discuss how you can undertake a preliminary lifestyle check to see if you’re ready to own your castle.
Suburb research
Amenities, infrastructure, and suburb character are just some things to consider when it comes to selecting a postcode. In section two, it’s all about location.
Property type
From design to structural integrity to the eco-friendly factor, this section covers everything you need to know when choosing property type.
Comparing finance
In section four, we outline the steps you need to take to get finance ready. We explain how home loans work and what you can expect to pay.
Purchase preparation
Learn about purchase methods, making an offer, how contracts of sale work and what your rights as a property owner are in section five.
Moving in
Before moving day, there’s a few things to organise. Research the body corporate or local council, book a removalist and get your utility accounts sorted.
On the look out for a property?
What are the costs of buying a home?
Stamp duty, mortgage registration fees and legal fees are just some of the costs associated with buying a property. Use our calculator and drop-down menus below to learn more about the variety of costs needed to buy a home.
Quoting costs from a third party
You will need to obtain a quote from a third party for the following fees.
Conveyancing - There are no set fees for this, which is why you need to obtain a quote in writing from your conveyancer. You will need to be able to provide the details of your transaction, such as the value of the property.
Building and pest inspections Pre-purchase inspections will reveal whether the property has had any structural or other issues which may cause problems further down the track.
Surveying fees - Surveying can help confirm the location of the buildings on the property and their boundaries. This is useful if you want to build fences and to confirm there are no encroachments onto the property by your neighbours.
Getting utilities connected - If you want to ensure that you have gas and electricity available and check the quality of it at your new property, then it may be worthwhile getting your utilities checked. Gas will need be reconnected in your name.
Removalists costs - This will vary depending on where you're moving to and the distance needed to travel. You also need to consider the quantity of the furniture and whether or the removalists will be packing the furniture for you.
Home and contents insurance - Speak with your insurance agent so you understand what type of insurance you need. It is recommended that you take out cover before settlement and if you are borrowing money your lender will require a building insurance policy noting their name as mortgage. Learn more about home and contents insurance and how it might help you.
Costs from your state/territory
You will need to consult with your state/territory revenue office for certain fees.
Mortgage registration fee - This is in addition to land transfer fees and is a government charge. It also covers the charge to register for the mortgage documents and is paid on behalf by your lender.
Mortgage transfer fee - Whenever a property is transferred to another owner a document called 'Transfer of Land' needs to be lodged and registered with the State Titles Office according to your State. It is a record of the change of ownership and the cost will vary from state to state.
Land tax - You are liable to pay stamp duty to the government if you buy land, which includes the buildings. The amount varies from state to state and is based on the valuation or the property price, whichever is greater.
General costs associated with home loans
Application fee: This is charged by your lender to process a loan application.
Settlement fee: This covers the cost of transferring funds from your lender to you, and should include GST.
Valuation fee: Your lender will need to have your property valued by a registered valuer to estimate the market value of the property.
About tips for first home buyers in Australia
Lenders Mortgage Insurance (LMI)
Most lenders require you to pay LMI if you have less than 20% deposit for a full documentation home loan. Depending on the lender, you can pay LMI upfront or it can be capitalised into the loan.
LMI protects the lender in the event that you default on your home loan. Typically you will pay LMI on your home loan if you are borrowing more than 80% of the property value on a full documentation loan, or more than 60% of the property value on a low documentation loan.
To determine how much the Lender's Mortgage Insurance (LMI) premium is, you need to contact the lender who's providing you with the loan.
FAQs about buying a property
How do I know the asking price on a property is fair?
How much will I be able to afford to buy for?
Is it worth using a buyer's agent?
A buyer's agent is an expert that acts solely for the buyer. There are many people who like to use a buyer's agent but many others who prefer not to, so this is a matter of personal preference. You will usually be charged a fee for this, so affordability will be one of the deciding factors. However, you may find that you are fine using just a real estate agent.
What happens if another person or company has a vested interest in the property?
Who will do the conveyancing on the property?
When do I need to take out insurance cover on the home?
What should I look for when choosing a mortgage?
What sort of deposit will I need to put down?
Should I apply for a mortgage before I start looking for a property?
This can be helpful, as it means that you will be approved in principle before you start looking, so you know exactly where you stand, as will the seller, who is more likely to want to sell to someone who has been pre-approved.
It's also a good idea to check your credit score before applying. You can apply for a free credit check here.
What about costs after I have purchased my house?
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My wife and I want to purchase a house. We currently have a mortgage in our current place. Ideally we only wanted to be in it for 2 years then buy a house. We currently have 7 investment properties. I was told due to APRA and it will be hard for us to get a house loan to purchase a house. Are there people that could help in our situation?
Hi Jason!
Thanks for the comment.
You can reach our to mortgage brokers for a personalized advice on this matter.
Hope this helps.
Cheers,
Jonathan
Just an enquiry just sold my flat for $337,500 and have already
placed a deposit of $30,500 towards a property @ $467,000 which leaves $437,000, total fees upfront just on $30,000, I have $130,000 which will cover the costs and the difference between both places, i am waiting on my solicitor to finalize all paper work and settlement day, in this respect do i guess have to organize a bridging loan? uncertain as to how much?
Hi Peter,
Thanks for your question.
It doesn’t sound like you need bridging finance as you have enough funds to cover the costs of moving from one property to the other.
A bridging finance is useful if you have a cash flow problem during this period. However, it’s advisable that you speak to your current lender or agent to confirm if you’d need a bridging loan.
All the best,
Shirley
Do you have the trail commission percentages from the different banks when they pay the broker?
Hi Nikki,
Thanks for your question.
Unfortunately we don’t at this current point in time. However, you can find this information in the Credit Guides of the respective Mortgage Brokers.
Cheers,
Shirley