1. Secure a loan
The first step in buying a house is to secure a loan, as most people cannot afford to purchase a house with cash. This involves contacting a mortgage broker, who will apply for pre-approval on your behalf. They will require documentation from you, such as proof of income and bank statements to show that you have a deposit.
2. Find the right property
Once you have secured pre-approval, the next step is to find the right property. This can be a time-consuming process, and you will need to consider several factors, such as location, land size, and the number of bedrooms, bathrooms, and carports. It’s important to determine the market value of the property before making an offer, and there are several ways to do this, such as looking at comparable properties in the same area or obtaining a report from CoreLogic, a widely used property analysis company.
3. Make an offer
There are two ways to purchase a property: a multiple offer scenario, where you make a “best and final” offer in a private treaty, or through an auction. After you’ve made an offer and it’s been accepted, you’ll need to sign a contract, which requires an initial deposit of usually $1,000 and a balance deposit due when your bank gives you formal approval.
4. Conduct a building and pest inspection
Before signing the contract, it’s recommended to conduct a building and pest inspection to ensure there are no serious issues with the property. This involves hiring a professional to inspect the property for pests and structural issues and preparing a report. If you’re happy with the report, your lawyer will satisfy the building and pest condition in the contract.
5. Sign an unconditional contract
After satisfying building and pest and finance conditions, you can sign an unconditional contract. This means you are locked in and cannot terminate except for exceptional reasons.
6. Conduct pre-settlement steps
Prior to settlement, you have the right to conduct a pre-settlement inspection. This is just you showing up and looking to see if it is in the same condition. Your lawyer will conduct due diligence enquiries, searching for water, council, rates, etc. that must be apportioned.
7. Complete the settlement
Your lawyer will handle everything during settlement, which may be conducted online or in person. At settlement, all the monies are paid, and forms are given to the bank, the seller, etc.
8. Begin paying off your mortgage
Once the settlement is complete, you can begin paying off your mortgage, either through internet banking or automatic deductions. It’s recommended to talk to your mortgage broker about having an “offset account,” a popular feature for many homeowners.
