There’s a number of steps involved with purchasing a house in Australia:

  • Save for a deposit
  • Get a home loan pre-approval
  • Making an offer on a house
  • Signing the sale contract
  • Finalising your finance
  • Completing the building & pest
  • Settlement

Saving for a Deposit

In Australia, you’ll usually need a 5%-10% deposit at minimum.  For more details about deposit requirements, check out minimum deposit to buy a house.

If you haven’t already saved your deposit, it would be worth looking into the First Home Super Saver Scheme.  It’s a Government incentive that enables first home buyers to save for a first home through their Superannuation – which is taxed at only 15% (instead of the regular income tax bracket).

Getting a home loan pre-approval

When you have the minimum deposit covered, you should speak to a Mortgage Broker or Banker about getting a pre-approval in place.  If you’re a first home buyer, you should read up on the Home Guarantee Scheme – applying for a pre-approval under the scheme has a number of benefits.

You should really aim for a ‘fully assessed’ pre-approval, which means the bank has checked/confirmed your entire application before issuing your pre-approval.  This will put you in the best spot going forward.

Making an offer on a house

When you’ve got your pre-approval in place, you should start looking for properties within your budget.  When you find a property you would like to purchase, you should talk to the Real Estate Agent about putting in an offer.  You’ll generally need to confirm a few terms:

  • Finance clause i.e. how long you need to finalise your finance approval. This is usually 7 – 14 days, but your Mortgage Broker can confirm.
  • Building & Pest i.e. how long you have to complete your building & pest report. 7 – 14 days in most cases.
  • Initial deposit i.e. how much you’ll pay when you sign the contract.
  • Balance deposit i.e. how much you’ll pay when you go ‘unconditional’.
  • Purchase price: how much you’re buying the house for.

Signing the Contract of Sale

Once your offer has been accepted, you will be provided with a Contract of Sale for your signing.  It’s recommended you get a Solicitor or Conveyancer to review and discuss your contract before you sign it.

Finalising your Finance Approval

Your bank will now need to finalise your finance approval.  Assuming it was a fully-assessed pre-approval, the bank should only need the Contract of Sale to finalise the approval.

They will then order a Valuation – which can take a few days.  Once done, the bank will review the valuation and provide you their final decision on your application,.

Completing the building and Pest control

Before the Building & Pest clause expires, you’ll need to get the property inspected.  The building & pest inspector will provide you a report outlining all the potential/actual risks and issues with the property.  All properties have issues of some sort, but you should use this report to see if there’s anything unexpected or deal-breaking.

Settlement

When all of the above are complete, you’ll just need to wait until the date of settlement.   Your Solicitor will be able to complete all paperwork and walk you through settlement on the day.  Once done, you can collect your keys from the Real Estate Agent and start moving in to your new property.