Purchasing a Property in Australia
Buying a home in Australia is an exciting yet complex journey. Understanding the key steps can help you navigate the process smoothly and make informed decisions. Here’s a step-by-step guide to help you along the way:
- Determine the Right Ownership Structure
Before searching for a property, decide how you want to own it—whether as an individual, joint ownership, or through a trust. This decision can impact tax obligations, liability, and estate planning.
- Consult a Mortgage Broker and Secure Pre-Approval
A mortgage broker can assess your financial situation, compare loan options, and help secure a pre-approval from a lender. Pre-approval indicates how much you can borrow, giving you confidence when house hunting.
- Identify a Conveyancer
A conveyancer or solicitor will handle the legal aspects of your property purchase, including reviewing contracts, conducting title searches, and ensuring a smooth settlement process.
- Check Insurance and Council Costs
Research insurance options to protect your investment. Also, check council rates and other ongoing costs associated with the property to ensure they align with your budget.
- Inspect the Property and Build Rapport with the Sales Agent
Before making an offer, inspect the property thoroughly. Building a good relationship with the real estate agent can sometimes give you an advantage in negotiations.
- Review the Contract of Sale
Your conveyancer will review the Contract of Sale to ensure it includes necessary protections and is in your best interest.
- Insert Clauses: Building and Pest Inspections, Finance
Before signing, include essential clauses such as:
- Building and pest inspections – to check for structural issues or pests.
- Finance clause – to ensure your loan is approved before settlement.
- Submit Your Offer
Once satisfied, submit your offer to the seller, either as a private sale negotiation or through an auction. If accepted, you will proceed to settlement, where the final legal and financial transfers take place.
By following these steps, you can confidently navigate the property market and secure your new home in Australia.
Other useful information
Buying at Auction
In cities like Melbourne and Sydney, many properties are sold through auctions. When purchasing at auction, the sale is unconditional, meaning you cannot include building, pest, or finance clauses. You must sign the contract immediately on the auction day and pay a 10% deposit.
To prepare, request the contract of sale from the sales agent in advance and review it with your conveyancer. If you wish to conduct a building and pest inspection, coordinate with the sales agent to schedule it well before the auction.
Settlement
This refers to the duration between signing the contract and officially taking ownership of the property (i.e., receiving the keys). The settlement period typically ranges from 30 to 90 days.
Clauses
Building and Pest Inspection – Typically, you have 14 days from the contract date to arrange for a building and pest inspection of the property.
Finance Clause – Generally, you have 21 days from the contract date to obtain formal loan approval from your lender. To meet this deadline, it’s essential to have pre-approval in place; otherwise, the process may take significantly longer.
Insurance
The point at which a homebuyer assumes responsibility for any property damage varies by state or territory and depends on the specific terms of the contract of sale. Each state has its own standard guidelines on when the risk of damage transfers from the seller to the buyer.
Cooling off period
If you change your mind, you can withdraw from the contract within the cooling-off period. However, the length and conditions of this period vary by state, as outlined below:
Note: For the cooling-off period to apply, it must be explicitly selected in the contract. However, auctions do not offer a cooling-off period.