Time to read : 5 Minutes
Buying your first home is one of life’s biggest milestones, and it comes with excitement, nerves, and a lot of moving parts.
You probably already have a good idea of your budget and where you want to live. But beyond those basics, there are some important steps you can take to make your purchase smoother, and can help avoid financial issues down the track.
So let’s walk through the must-dos, including costs and considerations that will help you secure your first property without any hiccups.
Make the most of reports that save you in the long run
The first must-do is to make sure you have organised and received a full property inspection report well before you sign the dotted line. While it can be frustrating to have to shell out for these reports (especially for a property you may not even end up buying), they are necessary.
It could be the difference between buying a problem-free property or one that could become a long term money pit, riddled with defects.
Pest and building inspections
A pest and building inspection report can help uncover any hidden issues that may not be obvious without the help of a professional. These can include structural issues, termite infestations, or even water damage.
The report typically costs between $200 and $500, but unchecked problems with your home, like fixing termite damage, could cost thousands of dollars down the track, so it’s well worth the outlay.
Boundary surveys
These are a type of land survey carried out by a licensed surveyor. They can help prevent disputes with neighbours regarding land size, property perimeters or fencing, and are a must for properties near easements or shared driveways.
A boundary survey costs around $900, but legal disputes over unclear boundaries can be in the thousands.
Flood or bushfire risk reports
This report is a must if you’re planning to buy a property in an area that could be subject to flooding or bushfires, and you’d be surprised how many properties are zoned this way even in very urban areas of our largest cities.
Sellers are generally required to disclose if the property has been affected by a flood or fire, but if you’re worried about the area, it’s best to play it safe and get your own report.
Be aware: if your property is in a high risk area, your home insurance premiums are also likely to be higher. It’s worth doing your research as any extra costs, such as higher insurance premiums will add up.
💡 Skipping inspections to save money is risky. Unexpected repairs or legal disputes can quickly spiral into costly financial burdens after settlement. A little money spent now can save a lot down the track.
Budget for conveyancing and legal essentials
Hiring a qualified conveyancer or property solicitor to handle the legal aspects of your purchase is another must when buying a home, and that means something else to budget for.
You can expect to pay between $800 to around $3,000, depending on the location and complexity of your purchase. A good conveyancer will:
Review and explain your contract (although of course you should read it too).
Ensure the title is clear for example, the seller is the legal owner and there are no outstanding legal issues.
Handle the transfer of ownership.
Coordinate with your bank and other parties for settlement.
People usually find a conveyancer through referral from friends and family, or from the lender or real estate agent. You can also go through the Australian Institute of Conveyancers in your state to ensure you’re hiring someone with the appropriate qualifications.
Important: your contract for sale will be long and can be confusing, but it outlines key dates, special conditions, and what you’re legally agreeing to. If something’s wrong or missing, it’s on you, so it’s important you read it too and don’t just rely on the people advising you.
Why you should get insurance before you settle
When you’re buying a property, it’s important to have your home insurance in place as soon as possible – in some states when you sign the contract and in others at settlement. This is also where a conveyancer can advise you.
Having your insurance sorted means if there is a fire, flood or some other disaster even before you move in, (yes it can happen) you’ll be covered. Opt for building insurance (even if you don’t move in right away), and home and contents insurance if moving in.
Note: some lenders may require proof of insurance before settlement, so it’s worth getting ahead on this one. Talk to your conveyancer about your requirements.
Apply for pre-approval early
Getting pre-approval from your bank or lender means you can start making offers or bid at an auction.
Pre-approval gives you a realistic idea of what a lender is willing to give you, not just what you think you can afford. It also ensures you can act quickly when you find the right property.
Buying a property can be an emotional experience, especially when you’re on the hunt for your first home. In situations like a bidding war at an auction, it can be tempting to go over your limit. Pre-approval gives you a number to stick to, which can really help you put the brakes on when you need to.
Be aware: pre-approval is not a guarantee. Your final loan approval depends on the property, valuation, and your financial position at the time. Always make your offer subject to finance in case you have any problems securing a loan.
And keep in mind pre-approval is generally only valid for 90 days from the date of the conditional approval. After 90 days, renewal can take anywhere from two hours to three days.
Are you aware of the first home buyer schemes?
In a bid to help first home buyers get on the property ladder, the federal and state governments have several initiatives you may be entitled to as a first home buyer.
These programs can save you thousands, but they come with strict eligibility criteria. It’s a must-do to check what’s on offer in your state as part of your research. For example, NSW has the First Home Buyers Assistance Scheme, while Victoria has the Victorian Homebuyer Fund.
The recently reelected Labor government has expanded the First Home Guarantee Scheme and lifted income and property caps for the Help to Buy Scheme. Learn more about the federal government first home buyer initiatives.
Know the hidden (and ongoing) costs
There are a couple of other upfront and ongoing costs that may impact your financials. It’s a must to budget for these, so you don’t get caught out.
These costs include:
Stamp duty (unless you’re exempt under a first-home scheme).
Lenders Mortgage Insurance (LMI) if you borrow over 80% of the property's value (unless you’re exempt under one of the federal government schemes).
Bank fees and valuation costs.
Utility connections and moving expenses.
Council rates, water rates and strata fees (if applicable).
Make sure your savings can comfortably cover these, not just your deposit and purchase price.
Bottom line
Buying your first home doesn’t need to be overwhelming. Once you know your budget and location, it’s the must-dos like inspections, conveyancing, pre-approval, and insurance that will protect your investment and your bank balance.
By planning ahead and knowing what to expect financially, you’ll be in a better position to start the search for a home that you love, and one you can afford to buy.
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Financial disclaimer
The information contained on this web page is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. You should check with a financial professional before making any decisions. Any opinions expressed within an article are those of the author and do not specifically reflect the views of Compare Club Australia Pty Ltd.
