Buying your first home can be stressful; not only is it a huge financial commitment, it can also be a lengthy and complicated process. That’s why the team at Liberty Financial decided to put together a step-by-step guide for first time buyers.
Let's begin!
Do your research
Think about the kind of home you want, where you want to live and what features are important for you (and your family). Read the real estate section of the newspapers, search property websites and attend auctions.
Get a solicitor
Find yourself a solicitor (or conveyancer) with plenty of experience. A good solicitor will not only be vital during the contract exchange and settlement process, but will also give you plenty of advice about things such as stamp duty, building reports and pest inspections.
How much can you borrow?
Knowing how much you can afford to borrow is all-important. Factors used to calculate this include the amount of deposit you have saved, the total property price and your salary. Use our How much can I borrow? calculator to get an idea of your borrowing power and, for expert advice, speak to a Liberty Adviser. Don’t forget that as a first home buyer you may be entitled to the First Home Owner Grant, which pays up to $7,000 towards the cost of buying your first home.
Choose your loan type
Research home loan options to work out which kind of loan is right for you. Do you want a variable or fixed rate loan? Would you like features such as redraw and the ability to make extra payments? For expert advice, speak to a Liberty Adviser or call us on 13 11 33.
Get home loan pre-approval
It’s important to get pre-approval on a loan before you begin bidding at an auction or committing to a private sale, otherwise you could end up making a commitment to a property that you can’t afford.
Choose your property carefully
Found a property you’re interested in? Then you need to find out as much as possible about your potential new home. We recommend getting a structural survey, pest report and, if you are buying a unit, townhouse or villa, a strata report. If you’re attending an auction you’ll need to get these reports made and reviewed by your conveyancer before you go. However, if it’s a private sale, you can’t get these reports until after your offer is accepted.
Get lender approval
Return to your home loan lender with the details of the property you’d like to make an offer on and get formal approval – make sure you allow a few days for this.
Decide your limit
Decide your highest price limit before you start bidding or making offers through private sale, and stick to that decision. If you're not sure that you have the willpower, consider asking a friend with some auction experience and a lot of common sense to bid on your behalf. Removing yourself from the bidding process will prevent you from bidding any higher than the limit you've decided on.
Make an offer
Ready to make an offer or start bidding? For private sales you'll need to make an offer through the real estate agent, who then presents the offer to the seller. This can take time and negotiation, so be prepared for your offer to be rejected or bettered by other buyers. If the property is being sold at auction, remember all the preparation you've done, get your formal loan approval, steel your nerves, and start bidding. Remember, once you've made a bid you can't withdraw it. You'll also be required to sign the contract and pay the deposit immediately.
Reviewing the contract
The contract is a legal document that contains the details of the sale, including the purchase price, the address of the property, title reference and plan number, building inspection reports, a list of any chattels and fittings included in the sale and the settlement date (the date on which the property becomes yours). The contract may also contain any conditions that are specified by you or the vendor. Send the contract to your solicitor to check all the terms and conditions. At this stage, make sure any further inspections are carried out. If you want to make changes to the contract, the seller will need to agree.
Signing the contract
There will be two copies of the contract. You and the seller each sign one copy, then the paperwork is exchanged and the deposit is paid. A few weeks prior to settlement, your solicitor will arrange for you to sign a Transfer of Land document that will be handed to your lender at the time of settlement and registered with the state/territory Titles Office on your behalf.
Settlement date
This is the day on which you become the property's legal owner. It's advisable to carry out a final inspection of the property with the agent to make sure that there are no unexpected surprises, like missing fixtures and fittings. You'll be required to hand over the balance of the purchase price to the seller's solicitor in return for the title of ownership - and the keys to the property.
Congratulations! You are now the proud owner of your own home.
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