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Home buying 101: How the buying process works

Top down view of a couple discussing buying a home
Found a property and ready to buy?

This guide will walk you through the buying process, from making an offer to moving in, so you know exactly what to expect at every step of the way.

If you’re a first-time buyer, breaking into the property market can be intimidating. Sure there are plenty of guides available out there offering the dos and don’ts of buying a house, but what about the actual buying process? 

What happens when you’ve saved your deposit, done your research, gotten pre-approval and found the home you want to buy or build? This guide covers everything you need to know about actually buying your first home, from making an offer to moving in.  

Making an offer

So, you’ve found the one. You’re ready to make an offer. Luckily, the actual process of making an offer to a selling agent is pretty simple. Deciding how much to offer is the tricky part. If you go too high, you risk overpaying for the property. If you go too low, you risk losing out. 

Agents will generally list properties at 5 to 10% more than they’re actually worth to try to get the best possible offer for their clients. It’s up to you to submit an offer that you think fairly represents the value of the home while meeting your personal financial requirements. 

It’s helpful to look at market conditions and comparable properties that have recently sold in the area to get a better idea of where you should set your offer. You can even enlist the help of a professional property valuer to help you come up with a suitable sum. 

When you’ve decided on an appropriate offer, you simply submit it to the selling agent in writing. Your letter of offer should include the amount you’re offering to pay for the property and any conditions attached to your offers such as maintenance or repairs. 

Once you submit your offer to the agent, they are legally obligated to take the offer to the seller for their consideration. 

Exchanging contracts

Once the vendor accepts your offer — this may be after some negotiation — you and the vendor will each sign a copy of the contract and keep one copy each. This is known as ‘exchanging contracts’. This is also when you will pay your deposit. 

Cooling off period

As a buyer, you’re entitled to a cooling-off period after you’ve made your offer and it’s been accepted. How long that cooling off period depends on the state you live in. Generally, it’s around three to five business days, ending at 5 pm on the fifth day. 

Now is the time to complete all relevant inspections and make sure the home is up to your standards. You should: 

  • complete the building and pest inspection
  • check compliance with local council by-laws on the property, fences and pool
  • have your solicitor or conveyancer confirm all of your inclusions are listed in the contract
  • understand all the terms of settlement. 

If you decide that you don’t want to go ahead with the sale, you must notify the selling agent in writing. They will then have 14 days to return your deposit. 

It’s important that you do your state-specific research here, as you may be required to pay a termination fee to back out of the sale. Also keep in mind that cooling-off periods only apply to private treaty sales, not auctions, in some states.  

Settlement 

Settlement is when the title of the property is transferred from the vendor’s name to your name. It usually happens six weeks after the exchange of contracts. 

You don’t need to be present for settlement to occur. Your solicitor or conveyancer will take care of everything for you. Working with the vendor’s solicitor and your lender, they will arrange for the balance on the property to be transferred to a trust account and then to the vendor. 

Once this is done, the property title will be transferred to your name. You will then be able to pick up the keys as a new homeowner. 

Stamp duty

Make sure you understand the stamp duty requirements in your state. This is a tax you must pay to the government when you buy a new property. Some states offer concessions or will waive stamp duty altogether, for new home buyers. 

If you do need to pay stamp duty, find out when the payment is due as it may be at or before settlement. 

Moving in

With keys in hand, it’s time to arrange your move-in day. There are a few things to consider here. If possible, try to time your move-in just right to minimise any financial obligations that come with breaking your lease

If you’ve never moved to a new house, or it’s been a very long time since you last moved, you may be surprised at how much work is involved. Take some of the stress out by planning your move. Think about what you might need on move-in day, and how you can pack to unpack your things. This will help things run smoothly and ensure you stay organised once you get into your new home. 

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