You'll always remember the experience of buying your first home. While it is an incredibly exciting time, it's also a serious and important purchase. We support you throughout the buying process, offering you the right information and expert advice when you need it.
Check out the 10 steps involved in buying your first home:
1. Know the Market
Do your homework and research the area you are buying into by browsing online property listings and speaking to local real estate agents. Attend plenty of property viewings and auctions, each time asking yourself: Does it suit my needs? What are its faults? What are its features? How does the price compare with other properties I’ve seen? The more informed your decision, the better chance the property you buy is the right one in terms of price, location, value, size and lifestyle.
Speak to your Boss Adviser about obtaining a comprehensive Comparative Market Analysis for any property you are interested in. This is a free service that will give you all the information you need about the property, including historical sales and recent sales in the area.
2. Do Your Sums
Once you have an idea of the property market, you need to know what you can afford to spend and repay. Your borrowing power is determined by your income and financial commitments, as well as your current savings and credit history. A Boss Adviser can help you work out how much you can borrow and what type of loan will suit your budget and lifestyle. We can advise you of the true costs involved in taking out a mortgage, including stamp duty, taxes, legal costs and insurance, as well as how to build in a buffer to interest rate calculations so that you are prepared in the event that rates rise. To save you time, we can also help you apply for the First Home Owners Grant and check your eligibility for stamp duty discounts.
3. Get Your Tick of Approval
Now you know how much you can borrow, make an appointment with a Boss Adviser to have your finance pre-approved. While you can leave this step until after you find a property, pre-approval is recommended because it gives you a realistic budget to go house-hunting with, and it ensures you’ll be treated as a serious buyer by agents.
4. Make an Offer
When you make an offer, the vendor may accept it straight away or seek to negotiate on price or other aspects of the sale. If you cannot agree on a price, you can withdraw your offer.
Remember, always give yourself room to move in the negotiation by making an initial offer that is less than you’re prepared to pay. Include terms you're willing to bend on such as the length of the settlement period. You can also put an expiration date on your offer to create a sense of urgency – i.e. my offer is valid until 5.00 pm Friday.
It’s important to note that if you intend to buy a home at auction, you will be required to pay a deposit – usually 10 per cent of the purchase price – immediately. If you buy privately, you are usually required to pay a holding deposit and when you exchange contracts, pay the balance to reach 10 per cent.
5. Start the Paperwork
Contact a Boss Adviser with the details of the property you want to buy so we can get the ball rolling on obtaining formal loan approval. As part of this process, the lender will organise an independent valuation of the property to make sure the amount you’re offering is reasonable. You will need to provide us with a range of documentation including ID and income verification.
Now is the time to engage a property law specialist – if you don't have one, we can recommend one for you. The seller will make the Contract of Sale available to your solicitor or conveyancer for review. The contract is a legal document that outlines your offer, the date of settlement, and any conditions that must be met before the sale goes ahead, such as ‘subject to finance’.
Now’s a good time to take the opportunity to do another inspection on the property, checking all fittings and fixtures are in place.
6. Organise Insurance
Proof of building insurance is usually required by your lender as part of the home loan process. Your Boss Adviser can help arrange this. The insurance can take effect from the date of settlement, or even before settlement if you are not aware that the seller has a current insurance policy. If you’re purchasing a Strata Title unit, villa or townhouse, you’ll need to obtain a Certificate of Currency from the body corporate insurer.
7. Arrange Relevant Inspections
As the seller won’t provide you with any guarantees about the structural soundness of the home, it is wise to have a building inspection undertaken before you exchange contracts. You should also have the property inspected for pests because the building inspection doesn’t include the detection of termites and other timber destroying pests.
This is also a good time to check with the local council and the state government roads and traffic authority about whether there are any future developments planned that may affect your home.
If you’re buying a Strata Title property, arrange for an inspection of the books and records of the owner’s corporation. It’s common for your solicitor or conveyancer to look over this documentation on your behalf.
8. Exchange Contracts
A property sale isn’t signed, sealed and delivered until the exchange of contracts. Once you and the vendor have both signed the contract and the purchaser has paid the deposit, the agreement is legally binding. Depending on your specific contract and which state you’re in, it generally takes four to twelve weeks from exchange of contracts until settlement.
9. Cooling-Off Period
If you exchange contracts in a private treaty sale, some states of Australia entitle you to a legal cooling-off period, which gives you the opportunity to withdraw from the contract. If you’re absolutely certain the property is perfect for you, you can waive the cooling-off period with the agreement of the seller. Your solicitor or conveyancer will advise you through this process.
10. Pay and Settle
Stamp duty, which is calculated on the purchase price of the property, must be paid at settlement. The First Home Buyers scheme provides full or partial exemption on duty to first home buyers – we can advise you of your eligibility. Your conveyancer will advise on the amounts and parties to distribute funds to and will attend settlement on your behalf. At settlement, the balance of the purchase price is paid to the seller and you become the legal owner of the property.
The keys are finally yours now – congratulations!
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