First Home Buyers Guide

Buying your first home is one of the proudest achievements in life but it can sometimes be a little overwhelming. Before you get the keys to your new home there are so many things to consider. We have created a guide of what to expect when purchasing your first home, from saving your deposit to settlement, so that you can enter the purchasing process with confidence. See below a step-by-step guide to help you through the process.

1. Pay off those silly debts

Let’s be honest, we all have them! But when applying for finance, this can really damage your pre-approval as well as your borrowing capacity. Anything you don’t need, get rid of it! This may include credit services such as buy now pay later services like After Pay, credit cards, personal loans etc.

2. Save, save, save!

Before you can obtain pre-approval, you will need to save your deposit. Generally 10% to 20% of the house price is ideal as well as a little extra for fees, stamp duty (if applicable), insurance, pest and building inspections etc. Your pre-approval process will be much easier if you have the right amount of savings, ready for purchase.

3. Meet with a broker or head to your bank

If you are happy at your current bank, you can choose to discuss home loan options with them and get the ball rolling. If you want to explore other options, a Mortgage Broker is a great choice as they will seek loan options from multiple financial institutes in order to find you a suitable loan that will meet your needs with the best possible interest rate.

4. Get pre-approval

Once you have chosen who to obtain your mortgage through and filled out the necessary forms, you will receive a conditional pre-approval letter from your chosen finance provider. This will show how much you are conditionally approved to spend.

5. Start shopping!

This is the fun part! Start to look in the suburbs that you are interested in moving to. See if there are any scheduled open homes that you can attend and if they are not offered, call or email the listing agent to arrange a private inspection.

6. Auction or Private Treaty?

What you do next will depend on the type of sale. If the method of sale is private treaty, you can submit an offer to the agent. If the method of sale is auction, speak to your mortgage provider to make sure that everything is ready before the day of the auction, as well as having pest and building inspections conducted prior.

7. Your offer is accepted!

Congratulations! You are one step closer to owning your first home. Once your offer is accepted you will need to engage with either a solicitor or a conveyancer who will be able to guide you through the contract process. In the Snowy Mountains region, we are lucky to have so many experienced solicitors and conveyancers to choose from. You will also need to notify your finance provider that your offer has been accepted so that they can start the paperwork for your mortgage in preparation for settlement.

8. Sales advice

Once your offer has been accepted, the listing real estate agent will ask for your details and your chosen solicitor/conveyancer details in order to create a sales advice. This document helps the solicitors/conveyancers put together the contract of sale for your chosen property.

9. Due diligence

You will meet with your conveyancer/solicitor who will guide you through the next few steps of purchasing your first home. Ensure that you have done your due diligence before exchanging contracts. This can include organising for pre-purchase pest and building inspections to be conducted on your chosen property so that you are fully aware of it’s current condition before proceeding with the purchase. Your finance provider may also request a bank valuation of the property which will determine whether the bank believes that the amount you are paying for the property is reasonable.

10. Unconditional pre-approval

Once your finance providers due diligence is completed and the loan is approved, they will send you your loan documents. Return the signed loan documents to your bank in preparation for exchange.

11. Contract Signing

You will go through the prepared contract with your solicitor/conveyancer who will help guide you through it. If you are happy with the contract, sign it!

12. Deposit

The next step is to pay your deposit into the trust account of the listing real estate agency which will be held until settlement. Typically the deposit is 10% of the sale amount, but in some cases the deposit can be 5% if both sides agree to it. This is something that will be negotiated and confirmed by your solicitor/conveyancer.

13. Exchanging of contracts

Once you and the property owners are in agreeance with the terms and conditions of the sale, have both signed the contracts, and the deposit has been met; the solicitors/conveyancers will exchange contracts! This means that you are one step closer to calling the property yours! You are no longer able to back out of the purchase, unless you have exchanged with a cooling off period.

14. Pre settlement inspection

A few days before your property is due to settle, your agent will be in touch to organise a pre settlement inspection before you pick up the keys to your new home! The purpose of a pre settlement inspection is to make sure everything with the house is as it should be, and allows time for any issues to be identified and rectified before settlement.

15. Congratulations, it’s Settlement Day!

Congratulations! It’s time to collect the keys to your new home. As your agent, this is one of our favourite parts of the sales process.

If you are in the process of buying your first home, get in contact with us or one of our friendly agents who will be happy to assist you in finding your dream first home!