5 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 be pretty daunting too. There are so many legal and financial steps, where do you even begin? To give you a picture of what to expect, we’ve put together a list of steps for your journey to buying your first home.

1. Dipping a toe in the water

Talk to friends and family

Get a picture of what’s involved. Talk to people who’ve done it. Ask what they did and how they went about it. Of course, everyone’s situation is unique, and yours will be too, but friends and family can give you an idea of what to expect. 

Ask an expert 

Unless you have a large stash of cash, you’re probably going to need a mortgage, and you could talk about this with a Home Loan Specialist. With their banking and home loan expertise they’re a good person to help you understand what your options are and answer any questions. Even if you can’t afford to buy just yet, you can talk to them and they’ll walk you through the home buying process. 

Get conditional approval 

Before you can even start looking, you need to know how much you can spend. It’s a good idea at this point to get conditional approval for a home loan. This means you’ll be able to act quickly when you see the home you want. In Melbourne and Sydney where properties often sell at auction, you’ll need conditional approval just to bid. Conditional approval may give you the advantage over competing offers in private sales too (especially in WA).  

Illustration of a toe dipping in to the water.

How do you get conditional approval?

Good question. Actually, it can be fairly straightforward. Talking to your Home Loan Specialist or Broker will help lay it out for you and they’ll come to you, or talk to you over the phone. You’ll need ID, income evidence, a summary of your living expenses, assets and liabilities (what you currently own and current personal debt).

The bank will then give you a letter telling you how much you should be able to borrow. This is your conditional approval. 

2. All this could be mine!

Do some research

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. Your Home Loan Specialist (HLS) is a great source of help too. They can get you as many property reports as you need which will give you handy information on previous sales, rental value and property history. Knowing this information 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. Due to construction, building usually takes longer to settle so you’ll need to factor rent in to your budgeting in the meantime.

Start looking

This is where the fun starts. Go out and look at lots of houses and suburbs and find one you can imagine yourself living in. Is it an easy commute? Where are you going to put the couch? Is it safe? If you spend time in the suburb at different times of the day, you’ll get a feel for what it’s like to be a local.

Make an offer

Now the scary part. Yes, it’s a lot of cash. But, you’ve found the one! There’s paperwork involved in making an offer, so chat to a solicitor and/or settlement agent to get things moving. Generally, you sign a contract ‘subject to finance’ and property inspections and specific timings. It sounds obvious, but always read the small print before you sign anything and check if there’s a ‘cooling off’ period (never in WA). Your settlement agent or solicitor will help you understand what building inspections you should carry out. Sometimes you won’t be allowed to carry out inspections until after the auction.

The contract will include details like the offer price, a proposed settlement date and anything to be included in the sale of the property – for example furniture or other additions are sometimes included. It will also stipulate the dates that things will happen such as finance, inspections and everything the seller needs to do.

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

Offer accepted! 

More than likely you’ll be competing against other people, but hopefully your offer is the one accepted by the seller. If so, you go on to carry out the relevant property inspections. If these don’t bring back glowing reports, you may be able to terminate the contract if the inspections aren’t passed or talk to your settlement agent about other actions you can take. 

Illustration of a mobile phone with a picture of a house.

Your settlement agent or solicitor will help you understand what building inspections you should carry out.

3. The Nitty Gritty

Apply for final approval with your bank

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. Recent pay slips, contract of sale signed and ID are usually required. The bank will also carry out a valuation of the property (usually 1-2 business days from when they have access to the property).

The bank will usually value the property at the purchase price, although occasionally they’ll come back with a value lower than what you’re paying. This is for your best interest to make sure you don’t unknowingly get ripped off

If the bank values it less, but you absolutely love the house and have the extra funds to cover the difference, you may still be able to buy it. Otherwise your loan will be declined, but your Home Loan Specialist or Broker can help you with your options.

Apply for your First Home Owner Grant

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. Ask your Home Loan Specialist for the latest information.

Illustration of a bank with a piece of paper.

4. The Home Stretch

Prepare for settlement

Together with your settlement agent you’ll now prepare the necessary documents for settlement and the time and place for hand over. For settlement to go through you must have building insurance, so organise it now.

Finance approval

If your loan is unconditionally approved, the bank will issue contract documents. Your Home Loan Specialist will talk you through the contract documents to make sure you understand everything properly. Send them back to the bank with the building insurance documentation.

Almost there!

The bank will verify the contracts and settlement will be booked. The settlement agent will transfer the property’s title into your name.

You’ll be kept up to date on the progress of your loan by your lending specialist and you can even track the application process yourself using Bankwest’s home loan application tracker.

Get organised to move 

Make sure you organise utilities so you can cook and have hot water on your first night in your new home. Organise removalists/friends/family to help move you in on or after your settlement date.  

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 expect it to be. Refer back to the offer documentation to make sure everything is as what was agreed. Check all the taps and electricity are working. If all ok, you 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.

Illustration of a piece of paper being signed and a calculator.

You can even track the application process yourself using Bankwest’s home loan application tracker.

5. Home sweet home

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. The only thing left to do is have your house warming. Welcome to your new home!

Illustration of house keys being handed over.

Find a home loan to suit you. 

Browse our range of home loans 

See how an expert can help you.

Get in touch with one of our Home Loan Specialists, and they’ll respond within one business day.

Things you should know

The information contained in this article is of a general nature and is not intended to be nor should it be considered as professional advice. You should not act on the basis of anything contained in this article without first obtaining specific professional advice. Also to the extent permitted by law, Bankwest, a division of Commonwealth Bank of Australia ABN 48 123 123 124 AFSL/Australian credit licence 234945, its related bodies corporate, employees and contractors accept no liability or responsibility to any persons for any loss which may be incurred or suffered as a result of acting on or refraining from acting as a result of anything contained in this article.