Buying your first home is an exciting milestone, but it can be daunting navigating the property market as a first home buyer. This comprehensive guide covers everything you need to know to successfully purchase your first home in Australia.

 

Saving for a Deposit

The first challenge is saving up a deposit, which lenders require to secure a home loan. Aim for at least 10-20% of the property’s value.

It takes discipline to build savings, but try to sock away as much as possible each month into a high-interest savings account. Cut back on discretionary spending and look for ways to boost your income.

First home buyer grants like the First Home Owner Grant (FHOG) can also help reduce the deposit amount needed. Grants range from $10,000 to $25,000 nationwide.

 

Getting Pre-Approval

Before house hunting, get pre-approved by a lender. This allows you to find out your borrowing capacity and lock in an interest rate. With pre-approval, you’re a certified buyer so sellers will take your offers seriously.

Compare loans from major banks and online lenders. Consider features like offset accounts, flexibility around extra repayments, and low fees.

 

Finding the Right Property

Now the fun part begins – searching for your first home! But don’t get emotionally swept up. Consider:

  • Location – Look for affordability now but with amenities and infrastructure supporting future growth.
  • Property size – Balance your budget with future plans e.g. starting a family.
  • Land value – Focus on maximising this rather than overcapitalising on the dwelling.
  • Condition – Older properties may require expensive repairs. Weigh up renovator options.

Research suburbs using online resources and buy within a 10-15km radius of your workplace. Drive around target areas and attend open homes to get a feel for properties on offer.

A buyer’s agent can help identify suitable properties based on your criteria.

 

Bidding at Auction

Auctions are common when buying in-demand properties in major cities. You’ll need to make a bid on the spot against other buyers.

Set a bidding limit and stick to it. Bid confidently in set increments. Seek bidding advice from your agent or conveyancer beforehand.

If the bidding exceeds your limit, be prepared to walk away. Other options will come up.

 

Making an Offer

For private treaty sales, you’ll make an offer to the seller via your real estate agent.

Do market research on recent sales to identify a fair price. Consider listing price, property condition, and value of inclusions.

Aim for a 5-10% discount on the list price, then negotiate from there. Make your strongest offer first, as you often only get one chance.

 

Conveyancing and Contracts

Engage a conveyancer or solicitor to facilitate the legal transfer of the property title into your name.

Signing contracts makes your purchase binding. Understand the terms and have everything thoroughly reviewed. Insurance and finance must be formally approved.

 

Settlement

Within 30-90 days typically, settlement will occur where you legally become the property owner.

Your deposit is transferred to the seller and you receive the title and keys. Stamp duty and lender’s mortgage insurance will also need to be paid.

Prepare by completing pre-settlement inspections and arranging utilities like electricity and internet. Now it’s time to move into your new home!

 

Choosing the Right Team

Having the right team around you will make your first purchase smoother:

  • Mortgage broker – Helps source the most suitable financing products and lenders.
  • Conveyancer/solicitor – Provides guidance on contracts and manages legal aspects.
  • Real estate agent – Can advise on pricing, and guide you through inspections and auctions.
  • Buyer’s agent – Identifies suitable properties and represents your interests.
  • Building inspector – Inspects properties to identify defects and estimate repair costs.
  • Pest inspector – Checks for termite or other pest damage.
  • Handyperson – Provides quotes for renovations or repairs needed.

 

The First Home Owner Experience

Here’s what to expect on your journey to purchasing your first home:

  • Saving for a deposit will require budgeting discipline but grants can help
  • Getting pre-approved makes you a serious buyer ready to transact
  • Research target suburbs based on affordability, amenity and future prospects
  • Attend auctions and inspections to get first-hand experience before purchasing
  • Make astute offers with guidance from agents, brokers and conveyancers
  • Use professionals to ensure legal obligations, finance and property conditions are covered
  • Expect an emotional rollercoaster but focus rationally on your property criteria

 

With the right preparation and support team, buying your first home can be an exciting, achievable goal. Gain confidence by learning the process, seeking expert advice, and taking one step at a time.