Money & Living
Do you know what it takes to actually buy a home?
We've broken it down into ten steps to help you better understand how it all works, and so you can know what to expect if you do decide to buy a property.
You have your deposit and your wishlist of suburbs, now comes the fun part... getting approved for a home loan and buying your dream home.
Bank, broker, or other?
First you need to decide who you want your home loan with.
If you like to leave the running around to someone else then find yourself a broker. They’ll liaise with several lenders to find competitive interest rates that best fit your needs.
Brokers work for commission, which they receive from lenders when your loan is approved, so make sure your broker is in it for you and has your best interests at heart.
If you prefer to use a bank or other lender, start shopping around.
Just remember, the lowest rate isn’t always what’s best for you so ask questions and know what’s on offer.
Find out how much you may borrow
Pre-approval is when your lender approves a specific loan amount.
To get pre-approved you’ll need to provide credit information such as pay slips, loan and credit card statements, and proof of savings.
Remember, pre-approval is not approval, but it does give you a pretty good idea of what you can borrow.
And if you qualify for the First Home Owner Grant, even better!
Hit those opens!
You know where you want to buy, so speak to local real estate agents and get out and view properties.
Write down a 'needs' checklist, i.e. 3-4 bedrooms, near to public transport, off-street parking etc. and visit at different times of the day so you get a good feel for the surrounding area.
Time to make your move
When the right house comes up, place your offer with confidence and cool. Know your stats, prepare to negotiate, and above all keep calm.
It’s an exciting time, but it can also be stressful if you are outbid or there are numerous offers on the property.
Stay positive and stick to your budget – where one door closes another one opens.
Your offer is accepted
Your offer is accepted and (if applicable) you enter the cooling off period.
Now’s the time to get your ducks in a row. Contact your lender and request formal approval for your loan.
Your lender might request a property valuation and you’re encouraged to book a building inspection during this time.
Hire an expert to take care of the tricky bits
These guys live and breathe real estate law so although you ‘could’ do it alone, having a conveyancer in your corner will make the journey a whole lot easier.
They’ll check for unpaid rates or land tax owing, any unresolved property disputes, and search government records to ensure there are no planned developments or illegal building works.
They’ll also sort out your council and water rates, making sure you aren’t paying the previous owners’ bills.
Put simply, they ensure all legal obligations are met, and are responsible for protecting your rights during the property transaction.
Your selling agent, lender or broker can help you find a conveyancer, or you may want to find your own through word of mouth or a quick Google search.
Whoever you choose, make sure they are registered, licensed, and above all, experienced.
You're homeward-bound (almost)
The cooling off period ends, you have formal loan approval, and your purchase contract is signed.
You are now legally bound to buying your house. Don’t panic! This is a quiet time for most.
You’re in the settlement period, which usually lasts between 45 and 60 days, and your conveyancer is working hard on your behalf to ensure things run smoothly during this time.
Connect utilities and other bits and bobs
With the finish line is in sight, now’s a great time to contact the utility companies, insurance providers, post office, and any other business that needs to know your new address.
Organise for your power, gas, phone line and internet to be up and running as of your settlement date.
The last thing you want is to be spending the first night in your new home without water or electricity!
The final touches
Settlement day arrives, your loan draws down, and your agent hands over your keys.
Buy a new door mat, hang your favourite picture, and send out your housewarming invites.
You’ve worked hard for this moment, enjoy every minute!
You've done it
You're officially a homeowner. Well done!
Now it's time to settle in, enjoy your new abode and make it your own.
At Bendigo Bank we have your best interests at heart. If you're looking to make a move in the property market find out how the better big bank can back you. Find out more.
Note: this article contains general advice only. Readers should seek a trusted professional’s advice on financial matters.