Basic steps to buying your first home

Buying a home is one of life’s major milestones. It’s a big deal. And as exciting as it is, it can also be a bit overwhelming. To give you a clear picture of what to expect, we’ve broken things down into some basic steps.

See the steps in more detail...

  1. Do your research
  2. Get conditional approval
  3. Search for a property
  4. Make an offer
  5. Apply for full approval
  6. Sign contracts and settlement prep
  7. Get ready to move
  8. Settlement

1. Do your research

While everyone’s situation is unique, talking to friends and family who’ve already done it can give you an idea of what’s involved.

Talk to an expert like a Home Finance Manager or Broker. Whether you’re saving for a deposit or ready to start house hunting, they can help you understand what your options are and answer any questions.

2. Get conditional approval for a home loan

Before you even start looking for a property, you need to know how much you can spend. It’s a good idea to get conditional approval, which is a letter from your bank telling you how much you could be able to borrow based on a review of your financial situation, objectives and requirements. It means you’ll be able to act quickly when you see the home you want.

Getting conditional approval can be fairly straightforward. Your Home Finance Manager or Broker will help lay it out for you. They’ll come to you or talk to you over the phone.

Find out more about the home loan application and approval process.

A shared journey to buying your first home

Video transcript (PDF)

3. Start your property search

Now you know what you can afford, it’s time to start thinking about where you want to buy. Chat to real estate agents and download real estate apps. Look at lots of houses and suburbs, and imagine living there.

What’s more, your Home Finance Manager can give you free property reports with handy information on previous sales, rental value and property history. This might help you make a more informed offer.

If you’re building, find a house and land package you like with a builder you trust. Building usually takes longer to settle due to construction, so you may need to factor rent into your budget in the meantime.

4. Make an offer

Now, the scary part. Yes, it’s a lot of cash - but you’ve found the one. There’s paperwork involved when making an offer, so chat to a solicitor or settlement agent to get things moving. Generally, you sign a contract ‘subject to finance’, property inspections and specific timings, including a date for settlement.

Be sure to read the small print before you sign anything and check if there’s a ‘cooling off’ period (never in WA).

If you’re buying off the plan or at auction, you may have to pay a percentage upfront.

Offer accepted! 

If your offer is accepted by the seller, you go on to carry out the relevant property inspections, such as pest or electrical inspections that have been included in the contract. If these aren’t passed, you may be able to terminate the contract, or talk to your settlement agent about other actions you can take.

5. Apply for full loan approval

Now is when you submit all the relevant documents to the bank. Your application will be assessed again to determine if the loan is unconditionally approved, which means the lender confirms that they will lend you the money. The bank will also carry out a valuation of the property. Find out more about the home loan application and approval process, and see what you need to apply in more detail.

If the property is a new build or brand new house never lived in, you may be eligible for a First Home Owner Grant from the government. This is a good time to apply for it. Ask your Home Finance Manager or Broker for the latest information.

6. Sign the contracts and prepare for settlement

Together with your settlement agent, you’ll now prepare the necessary documents for settlement - which is the legal process of transferring ownership of a property from seller to buyer - and arrange a time and place for the handover. Read more about preparing for settlement.

This is a good time to organise building insurance, which is essential for settlement to go through. Find out about home insurance.

If your loan is unconditionally approved, the bank issues contract documents. Send them back to the bank with the building insurance documentation.

The bank then verifies the contracts and settlement is booked. Your lawyer or conveyancer will transfer the property’s title into your name.

7. Get set to move

Make sure you organise utilities so you have hot water and can cook on your first night in your new home. Also arrange for removalists, friends or family to help you move in on or after your settlement date. It can be a good idea to schedule the move for at least a few days after settlement in case settlement is delayed for any reason.

8. Settlement

The settlement inspection

About a week before the settlement date you’ll have a settlement inspection. This is your chance to go over the property and make sure it’s as you’d expect. If everything’s okay, sign the inspection document to say you’re happy to move forward. Alternately, if there’s a problem you can ask for a reduction in the price, or money from the sellers.

Picking up your keys

The settlement date finally arrives and you pick up your keys. You’ll see your deposit leave your bank account and your first repayment will be due one month after the settlement date. You can choose to make up your home loan repayments weekly, fortnightly or monthly depending on your loan. The only thing left to do is have your house warming. Welcome to your new home!

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