Buying your first home, the ‘Great Australian Dream’, is a very exciting time. But it can also be daunting as there’s so many things that need to be considered. This ‘7 Steps to Buying Your First Home’ guide has been developed to help make the process a bit less overwhelming. Here’s an overview of what should be on your radar:
There are a few areas to think through when it comes to how much you can spend on your new home, and how much you can afford to repay on a home loan, to include:
There are many types of lenders that provide home loans (otherwise known as first mortgages). Besides the traditional big banks, there are new non-bank lenders, private lenders and fintechs, such as Mango Credit who all offer mortgage products.
Here are a few tips for first home buyers to keep in mind when considering a lender:
New Paragraph
This is the fun part, but it can also be a lot of legwork… Here, the internet is your friend and can give you a good idea of the price guides of homes in areas you are interested in, as well as previous sales in these areas. Try Domain or realestate.com.au, the two largest real estate sites in Australia.
Nothing beats seeing a home in person, so once you have a shortlist of homes in the areas you like and within your price range, attend open homes to inspect the ones you are interested in.
You can also let real estate agents in your preferred suburbs know that you are actively looking, what you are looking for, and your price range. Ask the agent to let you know about new listings and even off-market properties they have on their books.
Don’t commit to purchase a home before you look under the covers (or more accurately, behind the walls). It’s critical to conduct thorough professional inspections prior to purchasing a home, to include pest and building/ electrical inspections. For any strata purchases, it’s wise to request strata minutes from the last few years to ensure there are no major problems in the building. This will cost money, but will ensure no nasty surprises after you buy. And if you find urgent repairs are needed, or there are larger structural issues, you can factor this into the purchase price and your offer, or walk away.
New Paragraph
Most homes are offered either by private sale or treaty, or they go to auction. Typically, they are sold via a real estate agent, but some vendors sell directly. Once you know this is the home you want, make an offer within your budget. Be careful with so-called price guides provided by agents, particularly in a ‘hot’ property market. Often, they are less than what the vendor really wants or hopes to achieve at auction, so your initial offer may be unsuccessful.
Note that private treaty sales have a cooling-off period for inspections etc., but auctions don’t usually provide this option. So, it is crucial if you are bidding at an auction to have pre-approved finance and have done all the necessary inspections.
You may consider engaging a buyers’ agent to help you with the negotiation process, or even to bid on your behalf at auction. While it costs money to engage a buyer’s agent, they can also save you time, stress and potentially tens of thousands of dollars by securing a better price than you might have on your own.
Once your offer is accepted, contracts will be exchanged, and a deposit (usually 10% of the purchase price) will be paid into a trust account.
Property contracts are large documents full of ‘legalese.’ That’s why there are many specialist conveyancing firms that work solely in the area of property. You will also find many suburban law firms that offer a range of legal services, including conveyancing. This investment ensures there are no surprises once you have completed the purchase process.
Typically, the process from contract exchange to settlement is six weeks, but the timing can be negotiated between you and the vendor. During this time, your conveyancing solicitor will liaise with the vendor’s solicitor, council and various government departments to ‘tick all the boxes’ and support a smooth transfer of ownership to you.
On settlement day, and in exchange for the purchase price less the deposit you have already paid, you receive the title and keys to your new home. Congratulations, you are now a proud home owner! All that remains is for you to move in and turn your new house into a home.
Buying your first home is a huge commitment. If you understand the steps involved, and have considered all the important factors, the process will hopefully be faster, less stressful and a lot more enjoyable. Good luck!
We like to say
‘Yes’ to helping you get out of a bind, and ‘yes’ to provide funding to take advantage of a great opportunity. We do this by providing finance solutions via bridging loans for personal use and business short term loans for commercial or investment purposes.
Australian Credit Licence 422165
(applicable to personal bridging loans only)
Funded by Mango Mortgages Pty Ltd
ACN: 142 373 340 | ABN: 73 142 373 340
All Rights Reserved | Mango Credit. All Rights Reserved.