New home buyers: steps to buying a house

So, you’re in the market for your first home. Is your heart aflutter with excitement and nerves? Of course it is! There’s nothing more thrilling and fear-inducing as jumping into the housing market for the first time. Chances are you’re feeling a little out of your depth.

Where to start? How can you get a heads up on the rest of the first home buyers out there? Should you buy a house or build your own? Well, we’re here to make this as easy as possible for you. Follow our six simple steps to buying a house and you’ll be in your dream home in no time.

Home keys in a person's hand

Step One: Budget

One of the first steps to buying a house should be determining your budget. Get real about your finances and your future plans to assess how much you can actually afford to repay.

  • Begin with your total monthly income (this is the after-tax income for both you and your spouse {if applicable} along with any other income)
  • Determine your monthly expenditure
  • Subtract the total monthly expenses from your monthly income to discover the rough monthly amount you could afford to repay


You might also like to consider:

  • Your career in the future – is it stable? Are salary increases likely?
  • Will you or your spouse need to take time away from work to raise a child?
  • Are there any other changes to your circumstances that could impact your capacity to pay back your mortgage?


Step Two: Savings consistency

The second step to buying a house is being consistent with your savings. It’s important to recognise the flow-on effect when you veer away from your savings and budget plans. It might be helpful to download a budgeting and expenses app to track your spending and keep your budget close at hand. Start with reviewing your bank statement to see exactly where your money is going each month.


Step Three: Borrowing clarity

Once you’ve got a better idea of your budget, the next step to buying a house is determining your borrowing capacity. It will fluctuate from lender to lender, but you can get a rough idea from the online calculators many now offer. It may also be worth chatting to a mortgage broker who can take into account your income, debts, assets and anything else that may impact on your borrowing capacity and give you a good idea of how much the lenders on their panel would lend you. You’ll have a great head start if you can work out your price limit and have pre-approval on your home loan. Not only will this help you to fine-tune your search to properties and land within your budget, it may also allow for a potentially shorter settlement period which could lead to a lower sale price if the vendor is looking for a quick sale.

Homebuyers getting consult for their loan capacity

Step Four: Decision time

If you aren’t already certain, now is the time to get abundantly clear on location, house size and preferred style. While you need to be realistic, don’t be afraid to dream big. If building your home over buying feels like the right choice for you but you assume it’s out of your budget, you might be surprised. There are wonderful pockets of land left in great suburbs (not to mention old houses on wonderful lots to knock down and build from scratch upon) and building a new house means you can get exactly what you want. Explore all avenues and do what feels right for you and your family.


Step Five: Inspections

Step five in the six steps to buying a house is inspections. If you buy the first house you walk into and don’t inspect other properties, you will do yourself a disservice. Even if you’re looking to buy some land, you’ll still benefit from inspecting other properties. It will help you to understand negotiation tactics, the market, how agents communicate and the competition involved with house hunting.


Step Six: The offer

You’ve found what you’re looking for – the perfect block of land or the perfect home – now it’s time to make an offer. Be cautious when approaching price negotiations but remain a little flexible. Don’t show the agent all of your cards and try not to get too emotionally invested – if it doesn’t work out, there will be something else that might be even better just around the corner.

Make sure approval is pending building and pest inspection and finance (if you don’t already have home loan pre-approval, which you should!). If your offer is accepted—this is where the fun begins! Make sure you carefully check the contract and understand everything to ensure there’s no nasty legal surprises lying in wait for you. You will need to converse with a lawyer to review the contract and also solicitor (or conveyancing expert) to transfer the property title into your name.

If your offer isn’t accepted it’s back to the drawing board! If, even after reading these six steps to buying a house, you feel like you could use some further support, don’t forget about our end to end service. We can help you find the right piece of land or the right knock down and rebuild site and then build your dream home upon it—all at an affordable price.