If you’re considering purchasing a property in Australia, the process may seem daunting, especially for first-time homebuyers and overseas investors. In this article, we’ll provide an overview of the complete process involved in buying a property in Australia in 2024.
1. Do Your Research
Whether you have a specific suburb or property in mind or are new to the market, thorough research is crucial. Websites like realestate.com.au and domain.com.au are excellent resources for exploring Australian suburbs and properties. To prepare for your property search:
- Set a budget based on your deposit and borrowing capacity.
- Confirm your borrowing capacity with a mortgage broker or lender and secure home-loan pre-approval.
- Clearly define your property preferences, including size, rooms, bathrooms, parking, and type (apartment or house).
- Choose a suburb that aligns with your lifestyle and needs.
2. Attend Inspections
After conducting research, schedule inspections for the properties or suburbs that stand out. Inspecting a property in person is essential, as photos can be professionally taken or edited, potentially differing from reality. Inspections can be arranged through open house events or by contacting the listing agent.
3. Ways to Buy a Property
In Australia, properties are sold through private sales or auctions:
- Private sales involve a set asking price or price range determined by the vendor or real estate agent.
- Auctions provide a price range as an indication, but properties often sell above the advertised price. Private sale prices are negotiable.
4. Make an Offer/Bid at Auction
Whether making an offer or bidding at an auction, communicate with a real estate agent. Seek assistance with legal paperwork related to property purchases, and organise your finances before your offer is accepted.
5. After Your Offer is Accepted
Upon a successful bid or accepted offer, pay the property deposit. The deposit amount varies, considering lenders, government schemes, and benefits. Agree on a settlement date with the vendor, and ensure the remaining deposit is paid on settlement day. Hidden costs to consider include:
- Stamp Duty:
- Stamp duty is a tax payable to the state for any property or land transaction. However, there are instances where stamp duty concessions may apply.
- Lenders Mortgage Insurance (LMI):
- LMI, also known as Lenders Mortgage Insurance, becomes necessary when you lack the required deposit. Typically, you’ll need to pay LMI to qualify for a loan. However, with the First-Home Guarantee scheme, you are exempt from paying LMI.
- Conveyancing and Legal Fees:
- Conveyancing and legal fees are often unavoidable, given the extensive legal paperwork involved in property purchases. Seeking expert assistance for the review and processing of these documents is crucial. Costs usually range from $800 to $2,200, depending on the complexity.
- Building and Pest Inspection Costs:
- These costs cover examinations to identify any structural weaknesses in a property, an essential step in the purchasing process.
- Outgoing Fees:
- Outgoing fees encompass expenses such as council and water rates.
- Registration of Title Fee:
- The registration of title fee is a mandatory requirement to register your mortgage against the property’s title. In Victoria, this fee amounts to $119.
- Home & Contents Insurance Costs:
- While optional, home and contents insurance can be purchased to safeguard your home and furniture in case of damage or theft.
Before settlement day, conduct a final check to ensure the property is as expected.
6. Settlement Day
After the final inspection, authorise your lender to transfer the remaining purchase price to your solicitor or conveyancer. They’ll transfer it to the seller, and you’ll receive the title of ownership and keys to your new property.
Now, you can enjoy your new home!