Buying a house is one of the most significant milestones in life, filled with excitement and anticipation. However, the process can often feel overwhelming and complex. Whether you’re a first-time homebuyer or looking to move into your dream home, navigating the real estate market doesn’t have to be daunting. The team here at Moreton Buy uses these exact steps when purchasing property, we will break down the entire process into manageable steps, providing you with clear, actionable advice. From securing financing to closing the deal, we’ll cover all the essential aspects to help you approach your home-buying journey with confidence and ease. Let’s transform this seemingly intricate process into a straightforward and enjoyable experience, ensuring you find the perfect place to call home.

Step 1: Finances — Are You Ready to Commit to House Buying?

Most people cannot afford to buy a home outright and will need a loan, known as a mortgage, to help finance their purchase. There are two parts to home loans, the deposit and the principal, which is the remaining amount you will need to pay to own your home outright. The term of the loan is normally 30 years, depending on the lender. 

Research the median house price in the area in which you want to buy. This will help you determine how much money you need for a down payment or home deposit. This will generally be anywhere from 5% – 20% of the purchase price. 

Don’t forget to budget for house buying costs

You will also need to have enough money to cover buying costs such as paying a solicitor or conveyancer to review the contract of sale and due diligence on the home you intend to purchase, such as a building and pest inspection. Legal fees, property inspections, homeowners insurance and property taxes, such as stamp duty, can set you back thousands of dollars, so you must be budgeting for them also. Many lenders will not approve your home loan without adequate home insurance. 

How much will the banks give you? Assess your borrowing power

You can use a mortgage broker to help you with this step or approach lenders on your own. You will need to be assessed on how much you can borrow. When done with a lender, this is known as pre-approval. It’s important to note that pre-approval is not a guarantee your application will be approved by the loan officer. 

During this process of finding a lender and home loan that provides you with the right features (such as redraw or offset facilities), you should shop around as much as possible to find the best possible loan structure that will suit your end goals, not just the best interest rate. The amount of funds a lender is willing to provide you with (called borrowing capacity) will depend on several factors, including: 

• Your income and monthly expenses
• Any other debt you have, such as car loans, credit cards, Afterpay
• How much you have saved for a deposit as well as your savings history 
• Your credit score 
• Other large, regular financial commitments such as fees for private schools, etc.

Step 2: Finding your next property

When house buying, it’s critical to balance the location and lifestyle you desire with what you can afford. If you have pre-approval for a particular loan, stick to your budget when looking for the right home. Your first property purchase may not be your dream home and if you are buying with a partner, you may have to compromise. If you are a first-time home buyer, make a list of your must-haves such as the number of bedrooms and your ideal suburb and be willing to compromise on other features such as the layout or number of bathrooms. 

Let real estate agents know you are on the hunt for a home

Even if you choose not to use a buyer’s agent, it pays to build a relationship with reputable real estate agents. Your real estate agents should have extensive knowledge of the suburbs in which you are searching for a home and be able to guide you on what properties will suit your requirements. 

Step 3: The Negotiation — How to Make an Offer 

You have inspected a few properties, and you finally found it! Your next home! If you are happy with how the house presents and you have your finances in order, it’s time to make the seller an offer. There are two ways to purchase a home in Australia — auctions and private treaty. Let’s look at the differences between the two. 

Auctions

If you buy a home at auction there is no cooling-off period, and you will need to pay a deposit, normally 10%. You will also exchange signed contracts straight away. There is also no listed price, and in QLD, the real estate agent is unable to give you a price guide. Therefore, if you’re buying a home at auction, you need to be 100% sure you’re making the right decision. 

Private treaty

A property being sold by private treaty will usually have an asking price. You can make a written offer to the real estate agent or ask for the contract of sale. If the offer is accepted and the contract is signed, you will need to pay a deposit (normally 5% – 10%). A cooling-off period of 5 days usually applies, during which time you can withdraw from the sale should you wish to, and your deposit will be returned (less 0.25% of the purchase price).

You may have your conveyancer or solicitor review the contract before you sign it. Once both the seller and buyer have signed, a copy will be sent to you and the solicitor. They will arrange the title transfer and inform you of the stamp duty costs.

You can make an unconditional offer where you buy the property outright or a conditional offer subject to certain conditions being met, such as finance approval and inspections.

Standard conditions on a contract of sale

In QLD there are generally two standard conditions, and they are finance and building and pest. Although you have pre-approval it doesn’t guarantee you will get that money, the banks will still need to do extra checks on their end to ensure they are comfortable with lending you the money required. The standard time for a finance clause is 7-14 days. A building and pest inspection is crucial because it identifies any structural issues and pest infestations that could lead to significant damage and costly repairs. It helps you make an informed decision, negotiate better terms, and ensures your investment is safe and sound. Essentially, it provides peace of mind by uncovering potential problems before you commit to a purchase. The standard time for a building and pest condition is general 7-14 days

Step 4: The Next Stage — Secure Financing with Your Bank

Let your mortgage broker/lender know that you have made an offer on a home and apply to finalise your mortgage. The loan officer will send you a document to read and sign that will tell you the lender’s valuation of the property and how much they will pay on settlement.  If the valuation comes in lower than the contract price you will need to have the cash to make up the difference.

Step 5: Settlement: You’re Officially a Homeowner

Congratulations, it’s settlement day! You have battled the property market, survived the house buying experience and you are now a homeowner. On settlement day, the lender transfers the remaining sum to your solicitor, who then passes it on to the seller. It is also when you pay closing costs such as mortgage fees. The property title is then legally transferred to you, and you are given the keys to your new home. 

We’re Experts at Finding the Right Home for you

If you are on the search for a buyers agent, then choosing Moreton Buy as your local buyer’s agency is the best option because we possess deep knowledge of the Moreton Bay and Brisbane city area, enabling us to find the perfect properties tailored to your needs. Our established local connections and personalized service ensure you get the best deals and insider information that only a local expert can provide.