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. With so many legal and financial steps, where do you even begin? To give you a clear picture of what to expect, we’ve broken things down into some basic steps.

1. Do your research

Talk to friends and family

Talk to people who’ve done it to get a picture of what’s involved. Ask what they did and how they went about it. Of course, everyone’s situation is unique - 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 . This is something you can talk about with a Home Finance Manager or Broker. With their banking and home loan expertise, they can help you understand what your options are and answer any questions. Even if you can’t afford to buy just yet, you can still chat to them and they’ll walk you through the home buying process.

2. Get conditional approval and start your property search

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).

How do you get conditional approval?

Good question. Actually, it 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. You’ll need ID, income evidence, and a summary of your living expenses, assets and liabilities (what you currently own and your 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.

Start looking for your new home

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 Finance Manager is also a great source of help. They can get you as many property reports as you need with handy information on previous sales, rental value and property history. Knowing this information might help you make a more informed offer.

Go out and look at lots of houses and suburbs, and imagine living there. 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.

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 may need to factor rent in to your budgeting in the meantime.

3. 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 and/or settlement agent to get things moving. Generally, you sign a contract ‘subject to finance’, 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, like furniture or other additions. 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! 

It’s more than likely that you’ll be competing against other people, but hopefully your offer is the one accepted by the seller. If so, you’ll go on to carry out the relevant property inspections. 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.

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.

4. Get full loan approval

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, which means the lender confirms that they will lend you the money. Recent pay slips, the signed contract of sale and your ID are usually required. See what you need to apply for full approval in more detail.

The bank will also carry out a valuation of the property (usually one-two 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 in 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. Your Home Finance Manager 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 Finance Manager or Broker for the latest information.

Illustration of a bank with a piece of paper.

5. Signing the contracts and preparing for settlement

Get ready 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 the time and place for hand over. For settlement to go through you must have building insurance, so organise it now. Find out about home insurance.

Finance approval

If your loan is unconditionally approved – which means the bank has confirmed that they will give you a home loan - the bank will issue contract documents. Your Home Finance Manager or Broker will talk you through them to make sure you understand everything properly. Send them back to the bank with the building insurance documentation.

The bank will then verify the contracts and settlement will be booked. The lawyer or conveyancer 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. You can even track the application process yourself using our home loan application tracker.

Get set 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 or family to help you move in on or after your settlement date.

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.

6. 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 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.

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.

Ask an expert 

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

Things you should know

The information contained in the Property Report is prepared by a third party. Bankwest is not responsible for the accuracy and completeness of the information generated in the report and it should not be relied upon as a valuation of the subject property.

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.