Research the market thinking about what you value most in your first home – an apartment close to the CBD, public transport, beaches, parks, cafes and restaurants or land where you can build a home near schools, shops and playgrounds. Check out the median prices and recent comparable sales (there’s plenty of information available free online) and delve a little deeper to find out what economists are saying about future growth prospects. Some key first home buyer advice? Remember your first home may not be your forever home and the right choice may be just a stepping stone to your next purchase.

Conduct a personal financial health check by first creating a budget that identifies all your expenses and income. To be in a position to save, your income has to exceed your outgoings. If you’re struggling to show a surplus take a hard look at where your money is going looking for ways that you can reduce personal expenses. It could be that credit card debt is a financial drag and that‘s the first problem you need to rein in. Click here to download your Financial Health Check guide.

Add up all the costs associated with buying a home, apartment or block of land and any such government benefits as First Home Owners Grants, developer offers and stamp duty exemptions. On the cost side you need to factor in extras such as building and pest inspections, stamp duty, Home Loan Establishment Fee, Lenders Mortgage Insurance, Legal Fees, moving costs, utility connection, house and contents insurance, strata levies and furnishing. If you buy land, there will be additional costs for the design and construction of your home. A benefit to buying off the plan is the opportunity to forgo building and pest inspections required for established property, and in some states and circumstances, to save on stamp duty fees. At this stage it’s important to understand how Lenders Mortgage Insurance (LMI) can affect you. If you have less than 20% of personal savings to put down on the value of the home you plan on purchasing, your lender will probably minimize its risk by requiring you to buy insurance prior to signing off on the loan, known as Lenders Mortgage Insurance (LMI). Asking yourself, how can I avoid LMI? One way to avoid paying LMI is to make a down payment that is equal to at least 20% of the purchase price of the home.

Work out your borrowing capacity by speaking to a bank or mortgage broker. Although lenders are being much more cautious, mortgages are still an important part of their business. You’ll get an idea of how much they’re prepared to lend which will help you to refine your search or set some goals to achieve your savings target and your first home. You should aim to get a pre approval before you start making any offers. Pre-approval generally lasts for 12 months. Click here to watch our finance expert.

What does pre approval mean? Put simply, once you have preliminary loan approval you and the bank will be confident knowing how much you can spend on your first home. Now is the time to talk to a lawyer or conveyancer so that when opportunity arises you’re ready to act. If you’re planning to rent out your home you should also have an accountant on your side to advise on the most tax efficient way to purchase. The fun part now begins when you can start seriously looking for a place to call your own. It might be a journey you do on your own but it doesn’t hurt to have a friend or relative along for advice and emotional support.

Once you’ve zeroed in on your home of choice it’s time to bring in your team of experts – your lender and lawyer/conveyancer. Your lawyer will check the contract and it’s at this stage that you might like to discuss any variations. Mirvac’s Property Experts are also here to help, meet them here.

Building and pest inspections are a must when buying established property. These inspections can be avoided when buying off the plan.

With all the checks complete on your new home contract you can proceed to exchange, usually with a 10 per cent deposit. This sum can be varied with the vendor’s agreement that may include a reduced deposit coupled with other support incentives available to first home buyers.  

If you buy at an auction there’s no cooling off period which applies in most states, so you want to be pretty certain that you have your finance in order, the contract is solid and you really want the property before putting down any money.
Wondering what is the cooling off period? Australia if you don’t buy at auction, and for example, buy directly from a developer, the following cooling off periods are available in each state:
o New South Wales
o Victoria
o Queensland
o Western Australia

Before your home loan is formally approved the bank will need to undertake a valuation of the property. Before settlement you’ll receive a pre-settlement adjustment from your solicitor or conveyancer which will note any adjustments required (such as council rates, water rates, land tax and strata levies). If you have purchased a home or apartment, you should also have a pre-settlement inspection and make arrangements for insurance of your new home. Make sure you double check your numbers also, you know your situation better than anyone. If you are required to pay stamp duty on your property, ensure you check the timeframe for payment with your solicitor or conveyancer as it varies in each state and can be dependent on the timeframe between exchange and settlement.

The big day finally arrives when you become the proud owner of a home to call your very own and a successful first time home buyer. This is when your team of property experts comes into its own. Your solicitor will liaise with your lender and the vendor’s solicitor and once final payment is made, usually through an online system called PEXA, the property is legally yours. Don’t forget to arrange for your relevant utilities to be connected too. Congratulations! It’s time celebrate!