How to Buy a House in Australia

January 11, 2023
How to buy a house in Australia

Australia is known as one of the nicest places in the world to live. Famous for its natural wonders, beaches, large open spaces, and deserts, Australia is also a highly civilised country with many attractive big cities like Perth, Melbourne, and Sydney. So, it’s normal that you’re wondering how to buy a house in Australia. Who wouldn’t want a residence in one of these cities?

If you have been living as a tenant and are ready to buy property in Australia, it is possible and easy if you can meet the requirements.

You will come to understand the buying process, purchase price, cooling off period, property value, and laws, as well as real estate agents to help you facilitate a property purchase in this piece.

Is there a need for a real estate agent to purchase a house in Australia?

It is not entirely necessary to use a real estate agent to buy a house in Australia, but they can guide you through the home-buying process and find properties that meet your specific needs and budget.

Real estate agents have access to a wider range of properties for sale in the property market and can guide the legal and conveyancing fees of the purchase.

In addition, they can bargain for the best price on your behalf when purchasing the property. The decision to hire a real estate agent should be made solely on the basis of personal preference and practical considerations. While this may be, there are some values attached to using real estate agents.

Further Reading: If you’re keen to expand your real estate knowledge, don’t stop here! Discover the significance and nuances behind the term, What Does Median House Price Mean?, in our detailed article.

The step-by-step process of purchasing a house in Australia

Purchasing a home in Australia can be a complex process, but it can also be an exciting and rewarding experience. The amount of money you can mortgage and the kind of property you wish to buy will rely on your employment security, the family you have (if any), and your way of life.

Here is a general overview of the steps involved in buying a house in Australia:

Determine your budget

how to buy a house

It’s important to know your budget constraints before you begin your property search. It will enable you to focus on fewer possibilities and avoid getting in over your head with mortgage repayments.

You might be curious as to how much loan approval you can receive from the financial institution. Having this in mind is good. But an adequate answer to that is determined by many factors.

Mortgages are very huge financial responsibilities. So, you need to consult your account manager to help you determine what’s affordable for you. It will be beneficial to you while you look for a property to buy.

Check your debt status

Request for your credit report file, and ensure you settle off your debts. The timing to buy an investment property or home may not be ideal for you if you possess poor credit. If you have multiple loans and/or credit cards to pay off, try to consolidate them.

You might get a bigger loan amount if you lower the threshold on your credit cards. To modify your payment terms schedule, get in touch with your provider if you are having trouble making credit payments.

Purchase price

It is important to seek independent advice from an accountant, lender, or financial advisor to clearly understand the total costs of buying a house. Below are some costs you may incur:

Stamp duty: The value tied to the stamp duty fees you pay will depend on the state you reside in and the property prices. A stamp duty checker/calculator can help you get a definite quote.

Deposit: You will need about 10 to 20% of the deposit to obtain home loans. But if you want to escape lenders’ mortgage insurance, you will need approximately a 20% deposit. Although there are home loans with low down payments, they come with significantly more mortgage insurance and possibly tight conditions.

Legal and conveyancing fees: You will need enough money to cover some legal fees and other checks. This may cost you about $2,000 to $3,000.

Building and pest inspection: By conducting a pest and building inspection, you may ensure that your investment property or home is in good condition. You shouldn’t ignore this because doing so could end up costing you a lot more moving forward.

The typical cost of a check to ensure that a property is free of pests and in good structural condition is $700–$1000.

Money and insurance fees: If you plan to borrow more than 75% of the property’s value, your lender will need you to pay for mortgage insurance in case you default on your loan. Fees for applications, closings, and appraisals may also apply.

As a home buyer, a home loan can cost between $400 and $800. This value is affected by the lender, while an appraisal can cost between $500 and $700 if your bank does not waive the price. So you need to compare home loans to get the best value.

As you consider these fees, also, note that home and contents insurance, land tax, and council rates . You may need to open an offset account and make a cash deposit to help you in times of emergency.

Get pre-approval for a Mortgage

To know your pricing range, it is ideal to get pre-approval before starting your house hunting. This will give you a better idea of what you can afford, and it will also make you a more attractive buyer to sellers.

Search for properties

how to buy a house

There are many ways to find properties in Australia, including online real estate websites, local newspapers, and through a real estate agent.

It’s a good idea to start looking at properties as early as possible, as the property market in Australia can be competitive.

And before you head out house hunting, be prepared with our list of what to look out for when buying a house.

Research interest rates and mortgages

Be cautious to ensure you peruse and understand every paperwork and condition of any agreement. This is especially true if your deposit is ready but still want to go house hunting. You should look at the:

  • How the interest is calculated
  • Loan terms
  • If your funds are re-drawable
  • Interest rates

Make an offer

Making an offer to the seller is the next step after finding the home you want to buy. If you have a real estate agent, they can assist you and even negotiate on your behalf.

how to buy a house

Exchange contracts

Exchange of contracts will take place after the seller accepts your offer. Your agreement to purchase the property and the seller’s agreement to sell it to you are both legally binding upon completion of this process.

Obtain financing

If you haven’t already done so, now is the time to finalize your mortgage and obtain the financing you need to complete the purchase.

Finalise the purchase

Once you have financing in place and all the necessary documents including the contract of sale have been signed, you’ll be ready to complete the purchase and take ownership of your new home.

Dig deeper: Are you a married couple buying a house under one name? Arm yourself with Soho’s guide so you are up to date with the legalities involved


how to buy a house

Congratulations on taking the first step toward owning your dream home in Australia

Buying a house can be a complex process, but with a little research and careful planning, it’s achievable.

Just remember to determine your budget, get pre-approved for a mortgage, start looking for properties, make an offer, exchange contracts, and finalize the purchase. 

With these steps in mind, you’ll be on your way to becoming a proud homeowner in no time. Good luck with your home-buying journey!

Curious about what you can get on the market right now on a budget? Check out our 4 NSW Coastal Towns Where You Can Buy a Home For Under $500k.

If you’re on the lookout for your next home, Soho can help you find it. Set up your profile on Soho to find properties for sale and properties for rent in your favourite suburbs. But don’t just stop there, download our app to get access to more features. Just remember to shortlist or swipe left on our listings so we can send you others that better match what you’re looking for.

Suggested reading: Ready to buy property? Don’t miss out on our guide for what to look for when buying a house.

Soho is your expert team in Australian real estate, offering an innovative platform for effortless property searches. With deep insights into buying, renting, and market trends, we guide you to make informed decisions, whether it's your first home or exploring new suburbs.
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Our AI match engine will match you with over 150,000+ properties and you can swipe away or shortlist easily. Making your home buying journey faster and easier.