A Step by Step Guide
How to Buy a House in Australia: A Simple Guide for Beginners
From pre-approval to settlement day, here is exactly what happens when you buy your first home in Australia, explained in plain language.
How do you buy a house in Australia?
Buying a house in Australia follows seven main steps: getting pre-approved for a home loan, searching for a property, making an offer, negotiating terms, securing final financing, signing your loan and purchase documents, and settling on the agreed date.
Most buyers also need to budget for stamp duty, legal fees, building and pest inspections, and moving costs on top of their deposit. A mortgage broker can guide you through each step at no direct cost to you in most cases.
Buying your first home is one of the biggest financial decisions you will make, and it is normal to feel a little overwhelmed by where to start. This guide breaks the process down into simple, manageable steps so you know exactly what to expect at every stage.
Whether you are a first home buyer, an investor, or simply unfamiliar with how the Australian property market works, this guide walks you through the entire journey from getting pre-approved to picking up your keys on settlement day.
Laxmi Home Loans compares 50+ banks and lenders to help you find a home loan suited to your situation, and we support you through every step below at no cost to you for our broker service.
Step 1: Pre-Approval
Know your borrowing capacity before you start looking
Pre-approval is the foundation of your home buying journey. It tells you how much a lender is willing to lend you based on your income, expenses, and financial position, before you have even found a property.
- Get pre-approved to know your borrowing capacity
- Makes you a stronger buyer when negotiating with sellers and agents
- Completely free service through a mortgage broker
Pre-approval is usually valid for around 90 days, which gives you a clear budget to work with while you search. Read our full breakdown of pre-approval vs final approval to understand exactly what each stage covers.
Why pre-approval matters
Sellers and real estate agents take offers more seriously when you can show evidence of pre-approval. It also helps you avoid falling in love with a property that is outside your actual borrowing capacity.
Step 2: Property Search
Finding a property that fits your budget and lifestyle
With your borrowing capacity confirmed, you can begin searching with confidence. Most buyers start their search on major listing sites such as realestate.com.au and domain.com.au.
When assessing a property, consider the following factors carefully before making an offer:
- Budget — including all purchase costs, not just the listed price
- Location — proximity to work, schools, transport and amenities
- Size and layout — does it suit your current and future needs
- Condition — any obvious repairs or maintenance required
- Zoning and restrictions — particularly relevant for renovation or development plans
- Future development — planned infrastructure or rezoning nearby
Step 3: Make an Offer
Putting your interest in writing
Once you have found the right property, the next step is submitting a written offer to the seller. This is also the stage where you start engaging the professionals who will help protect your interests through the purchase.
- Request and review the draft contract with your solicitor or conveyancer
- Organise a building and pest inspection
- Negotiate on price or terms if needed
- Sign and pay an initial deposit once terms are agreed
Engaging a conveyancer or solicitor at this stage, rather than waiting until later, gives you time to review the contract properly before you are committed.
Broker tip
Never skip the building and pest inspection to save time, even in a competitive market. The cost is small compared to the risk of buying a property with hidden structural issues.
Cooling-off periods, finance and inspection clauses by state
In Australia, cooling-off periods are legally mandated in most states and territories, but finance, building, and pest conditions are generally voluntary clauses that must be manually requested and written into your contract. The specific timeframes, penalties, and standard practices vary significantly across regions.
The table below summarises the legal requirements and standard contract protections across every Australian state and territory for private treaty residential property sales.
| State / Territory | Statutory Cooling-Off Period | Standard Cancellation Penalty | Finance, Building & Pest Clauses |
|---|---|---|---|
| New South Wales (NSW) | 5 business days | 0.25% of purchase price | Not automatic. Buyers usually use the cooling-off window to rush these checks. Clauses can be requested but are rare in hot markets. |
| Victoria (VIC) | 3 business days | 0.20% of purchase price or $100, whichever is greater | Not automatic. Must be negotiated and checked off as “Subject to” conditions on the contract template. |
| Queensland (QLD) | 5 business days | 0.25% of purchase price | Standard in REIQ contracts. Explicit sections for finance and building and pest are included, and they take effect if you insert a due date. |
| South Australia (SA) | 2 business days | Small holding deposit, usually up to $100 maximum | Not automatic. Must be specifically requested as special conditions prior to signing the contract. |
| Western Australia (WA) | None. No statutory period | Not applicable | Highly standard. The Joint Form of General Conditions allows easy box-ticking for finance, and annexures for building and pest inspections. |
| Australian Capital Territory (ACT) | 5 business days | 0.25% of purchase price | Not automatic. Sellers must provide a building and pest report in the marketing contract, but buyers usually add a personal finance clause. |
| Northern Territory (NT) | 4 business days | Nil, if unrepresented | Not automatic. Cooling-off only applies if you do not use a solicitor. Finance and inspection conditions must be added manually. |
| Tasmania (TAS) | None. No statutory period | Not applicable | Not automatic. Real Estate Institute templates have standard condition text, but clauses must be explicitly filled out to be active. |
Crucial exceptions to keep in mind
Auctions: Cooling-off periods never apply to properties bought under the hammer at an auction. Auction purchases are completely unconditional.
Waiving rights: In some states like NSW, a vendor may ask you to sign a Section 66W certificate, which waives your cooling-off period entirely to secure the home.
Disclaimer
Property laws and real estate contracts differ radically between each Australian state and territory. The information above is a general guide only and does not constitute legal advice. You must always consult a qualified conveyancer or solicitor to review any contract of sale before you sign it to ensure your financial and legal interests are fully protected.
Step 4: Negotiate Terms
Reaching an agreement with the seller
Negotiation is a normal part of the buying process. Price, settlement timeframes, inclusions, and conditions are all points that can be discussed and adjusted until both parties reach an agreement they are comfortable with.
Your real estate agent typically facilitates this negotiation, while your conveyancer or solicitor ensures any agreed changes are reflected accurately in the contract before you sign.
Step 5: Secure Financing
Converting your pre-approval to final approval
Once your offer is accepted, your mortgage broker assists in converting your pre-approval into final, unconditional approval based on the specific property you are purchasing.
- We assist in converting pre-approval to final approval
- Arrange the lender’s valuation, supporting reports and deposit payments
- Sign the contract of sale once finance is confirmed
This is also a good time to confirm your loan structure, including whether you want a fixed, variable or split rate, and whether an offset account suits your goals. Read our guide on fixed, variable and split rate home loans for more detail.
What lenders check
The lender will order an independent valuation of the property and finalise your income and expense assessment before issuing formal approval. Read: how banks calculate borrowing power
Step 6: Finalise Purchase
Signing the final documents
- Sign your loan documents with our help
- Your conveyancer or solicitor handles the formal settlement process
- Ensure your funds are ready in your bank account at least a week before settlement
Having your funds ready ahead of time avoids last-minute delays. Your conveyancer will confirm the exact figure required for settlement, including any adjustments for council rates and water charges.
Step 7: Settlement Day
The day you officially become a homeowner
Settlement day is when ownership officially transfers to you. Your conveyancer and the seller’s representative finalise the transaction, and keys are released once everything is confirmed.
- Keys are handed over after settlement is confirmed
- You can begin moving in
- Notify your utilities, update your address, and arrange home insurance
Arranging home insurance before settlement, rather than after, ensures the property is covered from the moment it becomes yours. Read our full guide: home insurance in Australia.
Congratulations
Once settlement is complete, you are officially a homeowner. The Laxmi Home Loans team remains available to support you with any future refinancing, equity, or investment questions down the track.
Additional costs to budget for
Your deposit is not the only cost involved in buying a home
Many first home buyers underestimate the total cost of purchasing a property. Beyond your deposit, the following costs should be factored into your budget from the start.
| Cost Type | Details |
|---|---|
| Stamp Duty | Typically 4 to 5% of the purchase price. Varies by state and buyer status. Use our stamp duty calculator to estimate yours. |
| Lenders Mortgage Insurance | Required if your deposit is below 20%. Some exemptions are available for select professions and government schemes. |
| Legal Fees | Approximately $1,000 to $2,000 for conveyancing and legal review of the contract. |
| Building and Pest Inspection | Approximately $400 to $700 depending on the property and state. |
| Moving Costs | Varies depending on removalists, packing supplies, and distance. |
| Ongoing Costs | Council rates, utilities, and home insurance continue after settlement. |
Read our detailed post on first home buyer mistakes to avoid for a deeper look at the costs people commonly overlook.
Government support for first home buyers
The First Home Guarantee and other schemes that may help you
The Australian Government offers several schemes designed to help eligible first home buyers enter the market sooner, including the First Home Guarantee, which allows a 5% deposit with no Lenders Mortgage Insurance.
Eligibility depends on your income, the property value, and whether you meet the citizenship or residency requirements. Places under these schemes are limited each financial year, so it is worth checking your eligibility early.
Not sure which government scheme you qualify for? We can check your eligibility in one free consultation.
Check Your EligibilityLMI waivers for eligible professions
Some professions can avoid LMI even with a smaller deposit
Certain lenders offer LMI waivers to borrowers in specific professions, allowing them to borrow above 80% of the property value without paying Lenders Mortgage Insurance. Conditions apply and not all lenders offer this.
Registered Nurses and Midwives
Medical Doctors
Dentists
Accountants (CPA or CA)
Legal Professionals
Other approved professions
Read our dedicated page for registered nurses LMI waivers and our comparison of LMI vs loan protection insurance.
Why life and income protection insurance matters after a home loan
Protecting your biggest financial commitment
Once you have taken on a home loan, it is worth considering how you would manage repayments if your income stopped unexpectedly. Life and income protection insurance is designed to address exactly this risk.
- Mortgage security — ensures your home loan can still be paid if you are unable to work or in the event of death
- Family protection — provides financial support to your loved ones, helping them maintain stability during tough times
- Peace of mind — reduces financial stress, knowing you are protected against unexpected life events
Life and income protection insurance involves a cost and must be arranged through a licensed financial planner or authorised provider. Laxmi Home Loans can connect you with a provider on our panel upon receiving your written consent.
Worth discussing
Ask our team about this during your loan application. It is far easier to arrange cover before you need it than after.
What our clients say
Real experiences from buyers we have helped across Australia
“We had no idea where to start. Kishor walked us through every step from pre-approval to settlement and explained the costs we had not even thought about.”
Sarah T. — First Home Buyer, NSW
“The team made the whole process feel manageable. We knew exactly what was happening at each stage and never felt left in the dark.”
Daniel K. — First Home Buyer, VIC
“As a nurse I did not know I qualified for an LMI waiver until Laxmi Home Loans explained it to us. Saved us thousands and made buying possible sooner.”
Meera P. — First Home Buyer, QLD
Helping home buyers right across Australia
Local expertise with a national reach
Laxmi Home Loans has helped over 1,000 families buy, build, refinance and invest in property across every state and territory in Australia. Whether you are buying in a major capital city or a regional town, our broker service works the same way wherever you are.
We compare 50+ lenders nationally, which means your loan options are not limited by your postcode. Our team works with clients remotely by phone and video, so distance is never a barrier to getting the right advice.
Frequently asked questions
Common questions from first time home buyers
Ready to start your home buying journey?
Speak with an experienced mortgage broker who compares 50+ lenders and supports you from pre-approval through to settlement.
Book Free Consultation Or call 0433 589 626How can a broker help with this?
A broker who understands which lenders use which method can position your application with a lender likely to assess your income more favourably, rather than applying to a lender whose policy works against your specific income pattern.
