The Process & Steps in Buying a House

Whether this is your first or your second investment property purchase, you need a good team on your side. To make buying a house stress-free, you’ll want to find a reliable conveyancer, a lender (or mortgage broker to help you find a lender), and a building and pest inspector to assist you with your due diligence.

Unless you’re paying cash for your home, you’re going to be borrowing. There’s a bit of number crunching to do during this step in buying a house, so you will need to decide whether you’ll engage a mortgage or loan broker, or go directly to a lender.

Whatever you decide, you’ll need to have a good idea of your borrowing capacity. This will depend on the deposit you’ve saved, your income and your spending habits. You can also take a look at the government grants that are available to help you with your deposit and purchase. Don’t forget to consider the other hidden costs of buying a house, like stamp duty, transfer of title and conveyancing costs.

Then it’s just a matter of choosing the best lender for you. Make sure you look at the interest rates and decide whether you want to do a fixed term or variable home loan.

Learn more: Homebuyer Grants and Relief in South Australia

Once you have an idea of what you can afford, the exciting part starts. Property search can become a bit of an obsession, so look forward to plenty of online searching, attending open home inspections and maybe even bidding at an auction. Good luck with it all!

And if you’re worried about bidding at auction, you can always ask someone to do it on your behalf. Some people choose to appoint a buyer’s agent. This is someone to whom you pay a fee in return for them searching, evaluation and negotiating on your behalf.

Learn more: buying off the plan

So you’ve found your dream home, and now you’re ready to make an offer! The real estate agent will give you the required form and then you can submit your offer.

If the vendor accepts your offer, the real estate agent will draft up a contract and send it over to you to review and sign. If you haven’t engaged a conveyancer already, this is a great time to speak to one. 

Make sure you carefully read through the contract. If finance is not approved at the time the contract is signed or you are not a cash buyer, a finance condition (stating that the contract is ‘conditional’ on, or ‘subject to’ the purchaser being lent a specific minimum loan amount) is included in the contract as a measure to safeguard the buyer.

By having a contract of sale drawn up with a ‘Subject to Finance’ clause included, it enables the purchaser to withdraw from the contract if they are unable to obtain the necessary finance to purchase the property.

Then if you’re happy with the contract, you can sign across the dotted line. 

Remember: as soon as you sign a contract, immediately arrange insurance over the property.

As soon as the contract is signed, the sales agent will serve you a Form 1. A Form 1 is a heavy duty document and it is actually a statement that is required under Section 7 of the Land and Business (Sale and Conveyancing) Act 1994.

It should contain a lot of information including details about:

• Who is buying and selling the property.
• What ‘cooling off’ rights you have as the buyer
• Details of any matters that might affect the property, such as encumbrances, mortgages, etc.

You may also come across the following terms:

• Restrictive Covenant.

  This relates to any conditions that stop you developing the property in certain ways.

• Easement.

  These can include agreements or rights of a neighbour to use a part of your property to access their own.

• Leases and tenancy agreements.

  These documents relate directly to occupancy of the property.

• Development.

  The Form 1 document should inform you of anything relating to the Development Act such as building approvals, land management agreements with the local council, etc.

• Strata and Community Titles.

  If you are buying a unit, even a self-managed one, the Form 1 should outline any fees, certificate of currency for insurance, etc.

Once you’ve been served with the Form 1, your two day ‘cooling off’ period begins. If you haven’t already organised it, this is when you can arrange for building and pest inspections. This will give you some assurance around any red flags that might exist.

At the expiration of your two day ‘cooling off’ period (if applicable), you need to pay the agreed house deposit amount into the agent’s trust account in accordance with the contract.

Buying at auction

If you buy at auction, there is no cooling off period so you’ll need to do your due diligence before auction day. Sometimes there is a building and pest inspection provided – it is up to you as to whether you are happy with that or you prefer to do your own.

Now the cooling off period is over, it’s time to wait for your finance to be approved (if you have ‘Subject to Finance’ in your contract). Once finance has been approved by the lending institution or bank, notification will be given in writing to the purchaser, conveyancer and agent they are purchasing the property through. 

Once this happens, finance has “officially” been approved and the contract becomes unconditional – meaning that the purchaser can no longer rely upon the finance condition and must proceed with the purchase (subject to any other conditions being included).

Prior to settlement, you will receive a Settlement Statement from your conveyancer. Check it carefully and if you have any queries, telephone your conveyancer immediately. Ensure that you pay the amount requested on your settlement statement to your conveyancer’s office.

In the days preceding settlement period, arrange for gas, electricity and the landline to be transferred to your name or connected in your name at your new house. If you need some assistance with this, Eckermann Select Service can help you. Just let us know and we’ll arrange it for you.

Congratulations, you’ve made it to settlement day! The lead-up to this day starts with the signing of the contract by both parties. This legally binds both the seller and the home buyer to the transaction. The contract will detail the agreed-upon price, the settlement date, and any conditions that need to be met before the settlement can occur.

One key aspect to consider is the settlement period—the time between the signing of the contract of sale and the settlement date. Some buyers and sellers agree on a longer settlement period to allow the buyer more time to prepare for the move, finalise their financing, or sell their current home. This period can vary, but it typically ranges from 30 to 90 days in Australia.

As settlement day approaches, be mindful of the upfront costs involved. These costs can include stamp duty, legal fees, and any other charges associated with the transfer of the property title. Ensuring these costs are covered beforehand will help the day proceed smoothly.

Once everything is verified and the seller receives payment via the property exchange platform being used by the conveyancer (usually PEXA) the property title is transferred to your name.

Finally, the moment you’ve been waiting for arrives: you receive the keys to your new home. It’s time to celebrate the start of this exciting new chapter, as you move in and begin to make the space your own.

Learn more: what happens on settlement day 

For over 45 years, we’ve been helping South Australian residents with their real estate transactions. If you need help understanding the buying process, please don’t hesitate to get in contact with our experienced team.