Whether you are a first home buyer or buying another house or getting into property investment, finding the perfect house and making the right deal is always a daunting process.

It involves proper planning, research, and budgeting. The key steps to buy a house include:

(a)    whether you are ready to buy a house;
(b)    check whether you are eligible for First Home Owner Grant scheme (“FHOG scheme”);
(c)    check how much you can afford to borrow; and
(d)    find the right house.

This article is aimed to provide you a step by step process in buying a house and some tips to help you get started.

Step By Step Process

Organise your finances

In order to know whether you are ready to buy a house you must have the following things in place:

(a)    a substantial deposit;
(b)    a regular savings habit;
(c)    Home Loan Pre-approval; and
(d)    some additional savings.

It is important to know your borrowing capacity before you start searching for a house. A Home Loan Pre-approval will give a clear picture on how much you can borrow. The lender does a basic assessment on the income of the borrower and then informs the borrower that they can borrow up to a certain amount of money from the lender.

Check whether you are eligible for FHOG scheme. It is a national scheme, funded by the Federal Government and administered through each State and Territory Revenue Office. Under the scheme, a one-off grant is payable to first home owners that satisfy all the eligibility criteria. The amount available varies from one State to another and ranges from $5,000 up to $25,000 for first home buyers.

Owen Hodge Mortgage Solutions can help you in increasing your borrowing capacity by creating a budget and help you identify your existing expenses so that you are able to cut down your unwanted expenses and generate a substantial amount of savings prior to applying for home loan.

Market Research

Before you start searching for the perfect house, you must have a clear idea about the kind of house you are looking for and your preferred locations. A bit of homework will save a significant amount of time.

Once you know your borrowing capacity, it becomes much easier to search and inspect houses within our price range.
You should consider the following things before finalising a decision to buy a house:

(a)    proximity to schools, shopping centres and other public facilities like parks and sporting grounds;
(b)    public transport and amenities;
(c)    check whether there are any restrictions on the property like easements, heritage listing (which can         limit any renovation plans ) and
(d)    the condition of the house.

Making An Offer

You can make an offer to the Vendor or their agent if the house is for sale by a private treaty.

In order to buy a house at auction, you need to register yourself as a bidder. In case you are successful at the auction, you will be required to sign the Contract and pay the deposit as soon as the auction finishes.

You should arrange for a building and pest inspection and or a property valuation before the auction day as you will not be able to make the Contract subject to any conditions. You are also not entitled to a cooling off period.

Exchange of Contracts and The Deposit

After reviewing the Contract, you and the Vendor both are required to sign a copy of the Contract and it becomes legally binding. This is known as the “exchange of Contracts”.

After the Contract has been signed, a deposit on the purchase price is payable.

In case you are buying a house at auction, you need to sign the Contract and pay a deposit, usually 10%.

Owen Hodge Mortgage Solutions can assist you in reviewing the Contract and obtaining finance.

Cooling Off Period

Generally if you are buying a house through a private treaty, you will have a fixed number of days as a cooling off period (usually 5 working days). During this period you may change your mind to withdraw yourself from purchasing the property without any legal repercussions. You may however lose your holding deposit.

The cooling off period is usually calculated from either the date of the Contract signed by you and the Vendor or from the date of receiving the Vendor’s statement, whichever is later.

In case you are buying a house at auction, you will not be entitled to a cooling off period.


The settlement date is the date when you take the legal ownership of the house. This is normally 6 weeks after the exchange of contracts. On this date, the legal documents of the house are transferred from the Vendor’s name to yours. The adjustment of rates and taxes are calculated, and the balance amount of the purchase price of the house is paid to the Vendor. You will be represented by your Conveyancer during the settlement process. After completing all the formalities, you will be provided with the keys of the house and you may take possession or rent it out to somebody else if the property is an investment property.

The team at Owen Hodge Lawyers can help you navigate through the home buying process and assist in all aspects of the transaction ranging from mortgage services, legal representation on the home buying Contract and conveyancing.

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