Start Your Property Journey: A Guide to Buying Your First Home in NSW

Posted By Shiral Alexander

Before purchasing your first home in Australia, it is important to carefully consider the following:

What kind of purchase are you considering? Are you interested in acquiring land and constructing a house from scratch, or are you looking to buy an already-built home, apartment or villa? There are various choices available, and your decision should depend on what works best for you and your financial plan.
In what manner do you plan to purchase it? Are you considering a private treaty or are you thinking of acquiring it through an auction?
How you will handle the required legal procedures? You can choose to engage a solicitor, a conveyancer, or you may decide to handle it yourself.

This will help ensure a smooth and informed buying process.

Here are the steps you can follow in Buying your first property in NSW:

1) Look for property

Before commencing your property search, it's crucial to have a clear idea of the type, location, and budget that you have in mind. Viewing multiple properties will enable you to make price comparisons and assess their value for money. Additionally, this will help you better identify your own requirements and determine what is affordable within your budget.

2) Check the contract of sale

To sell a property, the seller must have the Contract of Sale ready and provide necessary documents, such as a section 149 certificate from the local council, a copy of the title folio from Land and Property Information NSW, zoning details, and a cooling-off statement.

3) Express your interest in the property

After finding a property, it's recommended to have your solicitor or conveyancer review the Contract of Sale. Seeking legal advice before agreeing to anything is wise. To show sincerity, most real estate agents will ask for a deposit, either partial or full.

4) Applying for a loan

To finance your property purchase with a loan, it's essential to quickly apply for a formal loan with your lender. However, do not sign any property contracts until you receive written loan approval. The lender will assess the property's value to ensure it's suitable collateral for the loan amount.

5) Arrange Inspections

To ensure a smooth transition into your new home, it's recommended to have a building, pest, and/or strata inspection performed. These inspections are essential for a trouble-free living experience.

6) Decide on the type of ownership

If you're buying a property with someone else, you can choose either Joint Tenancy, where two or more individuals have equal ownership, or Tenants in Common, where two or more individuals can have equal or unequal shares, and the share of a deceased individual goes to the person named in their will.

7) Exchanging Contracts

After the completion of all necessary reports and loan approval, your conveyancer or solicitor will facilitate the exchange of contracts. The seller's conveyancer or solicitor will prepare two copies of the contract, with the original going to the seller for signature and the other sent to the buyer's conveyancer or solicitor for review and signature. The exchange of contracts will then take place.

8) Paying the deposit

Upon finalization of the contracts, the agent will request the deposit outlined in the agreement to be paid on that day. Usually, this amount is 10%, but it may differ based on the agreed-upon terms.

9) Paying the stamp duty

You must pay stamp duty, which is based on the property's purchase price and is due within three months of contract signing. If you’re a first-home buyer, you may want to check out our article: First Home Buyer: Stamp duty or Property Tax?

10) Exchange of Contracts to Settlements

The settlement process, which spans from the contract exchange to the actual settlement, usually lasts between four to eight weeks. During this time, your conveyancer or solicitor will conduct searches and inquiries and prepare essential paperwork. For further details and overall steps, refer to the Guide to Purchase Your Home.

11) Organise Insurance

After settlement, when the property is officially under your ownership, you are accountable for any property damage. To be on the safe side, it's advisable to acquire property insurance before settlement, particularly if you are uncertain if the seller has active insurance coverage.

12) Making a final check

Before completing the settlement, it's wise to perform a final property inspection to ensure that it hasn't been damaged and that all fixtures and fittings stated in the contract are still present and in good condition.

13) Day of Settlement

Settlement is the last phase of the transaction process. A mutually agreed date is set for the settlement, which typically occurs at the seller's lending institution. Both parties, as well as representatives from both the seller's and buyer's lending institutions, will attend the settlement.