Buying a property can feel like one enormous decision. In reality it is a series of decisions, checks and commitments that run from the moment you start looking through to settlement. The important part is knowing what needs to happen, and when, so you can make decisions while you still have options.
A common problem is moving ahead before the relevant checks have been done, particularly signing or committing before understanding the contract and the property.
The seven stages of buying a property
1. Get finance-ready
Before you start looking seriously, you want to know what you can borrow, what a lender is prepared to commit to, and what you are actually comfortable spending. Those are three different things, and confusing them is how buyers end up stretched.
- Borrowing capacity is an indication of how much a lender may be prepared to lend you, based on its assessment of your income, expenses, debts and circumstances.
- Pre-approval is an indication that a lender is prepared, subject to its conditions and to the eventual application and property, to lend up to a particular amount.
- Your purchase budget is what you are comfortable spending once your deposit, buying costs, repayments and a financial buffer are taken into account.
Pre-approval tells you what a lender may be willing to do. It does not tell you what you should spend. Deciding that is your job, and it is worth doing before you fall for a property. See borrowing capacity versus a realistic purchase price.
The purchase price is not the whole financial picture
Alongside the price you agree, you will usually need to budget for:
- Your deposit
- Transfer duty, where it applies
- Conveyancing and other professional costs
- Inspections and property searches
- Lender costs, where they apply
- Moving costs and the ongoing costs of owning the property
Concessions, exemptions and grants exist across the states and territories, and eligibility rules differ, so it is worth checking what applies to you. For the standard set of buyer costs, see what everyone pays when buying, and for the amounts adjusted between buyer and seller at the end, see common settlement adjustments.
2. Search and shortlist
Why this matters: the more you understand the area and the market before you are under pressure, the better your judgement will be when you find something you want.
Look at recent sales, current listings and how properties in the area are actually selling. Go to open homes and auctions, even for properties you would not buy, so you can read prices and demand for yourself. Just as usefully, get clear on what matters to you: location, size, condition, how long you expect to stay, and what you are prepared to compromise on. A shortlist built on that is much easier to act on quickly and calmly.
3. Check the property and the contract
This is the stage that protects everything after it. Before you commit, you want to understand two things: the property, and the contract.
Check the property
Look at it properly yourself, then get the relevant professional checks done. A building and pest inspection tells you about structural condition, damage and pests. For a unit, townhouse or apartment, strata or owners corporation due diligence tells you about the financial health and management of the scheme you are buying into, and the rules you will be living under. See our building and pest inspection guide.
Check the contract
The contract is where the important legal details of the purchase live. Before you sign, you want to understand what you are agreeing to, what conditions apply, and whether there are terms you need to question or negotiate. A conveyancer or solicitor reviews it, explains your rights and obligations, flags anything unusual, and can recommend changes or special conditions. These are the five checks we run on every contract before a client signs.
The checks you need will depend on the property, the type of transaction and where the property is located.
4. Make an offer
Once you have found a property you are serious about, you will need to understand how offers and contracts work in your state and what you are agreeing to before you commit. How an offer is made, and what legal effect it has, is not the same everywhere.
Price is not necessarily the only thing you are negotiating. Settlement timing, what is included in the sale, and the terms of the contract itself can all matter, sometimes more than the last few thousand dollars. Knowing which of those you care about before you start is worth more than any negotiating tactic.
5. Sign, and satisfy any conditions
What happens after an offer is accepted?
What happens next depends on how the transaction is structured and where the property is. Broadly, it involves signing or exchanging the contract, satisfying any conditions that apply, finalising your finance, completing any remaining due diligence, and working towards settlement. The order of those steps, and the legal effect of each, varies.
Some contracts contain conditions relating to matters such as finance or inspections. What those conditions mean, when they must be satisfied, and what happens if they are not depends on the contract and the state or territory. A cooling-off right may also apply, or it may not: see cooling-off periods.
Why this matters: conditions and cooling-off rights are usually time-limited. Missing a date can change your position significantly, which is why this stage is about tracking dates as much as anything else.
Finance approval
If your purchase depends on finance, your lender will typically want the signed contract, will assess the property, often including a valuation, and will then confirm its position. Give your conveyancer the paperwork as soon as you have it, because the finance timeline often drives every other date in the contract.
6. Prepare for settlement
Once the transaction is on track for completion, the work shifts to getting everything ready for the day itself. Depending on the transaction, that can include:
- Verifying your identity with your conveyancer
- Signing and returning duty documents, and arranging to pay any duty owing
- Signing and returning your loan documents so funds are available on the day
- Arranging insurance, which your lender or your contract may require
- Carrying out a final inspection shortly before settlement, to check the property and any inclusions are in the condition you agreed
Your conveyancer prepares the settlement figures, including any adjustments between you and the seller, and confirms the balance you need to bring. Why this matters: most delays at settlement come from a document signed late, not from a problem with the property.
7. Settle and collect the keys
What happens at settlement?
At settlement the purchase is completed. The balance of the price is paid, any existing mortgage over the property is dealt with, and the transfer of the property to you is lodged for registration. Your conveyancer acts for you on the day and confirms when it is done. You then collect the keys, usually from the agent.
The process varies by state
The broad journey is similar across Australia. The legal mechanics are not, particularly around contracts, exchange, conditions and cooling-off.
- New South Wales: contracts are exchanged, and the point at which the parties become bound can arrive earlier in the process than buyers expect. Getting the contract reviewed early matters here.
- Queensland: contracts are commonly entered into subject to conditions, such as finance and building and pest, with the relevant dates set out in the contract.
- Victoria: sellers provide a vendor statement with prescribed information about the property before sale, and the contract sets out the terms of the purchase.
These are general descriptions, and what applies to your purchase depends on the contract and your circumstances. Where a decision turns on state rules, check the state-specific guidance or ask your conveyancer.
Where a conveyancer fits
A conveyancer is not someone who appears once, at contract review, and then disappears. Good conveyancing helps you understand what you are committing to, identify issues while you still have options, keep track of the moving parts, and guide the transaction through to settlement.
That is the reason to involve one early. The earlier you understand the important parts of the transaction, the more options you have.
The shape of it
Get ready. Find the property. Check it. Understand the contract. Commit. Manage the conditions. Settle.
Buying a property is less complicated than it is sequential. Most of the important decisions sit in the middle, in the stretch between finding a property and becoming committed to it, which is exactly where it pays to know what you are looking at.
