Typical steps involved in buying residential property

For many first-time homebuyers, investors, and even overseas buyers, the process of purchasing residential property in Australia may seem complicated, but once you understand each step, the whole process is actually very standardized and transparent.

This article will guide you through the general process of buying residential property in Australia, including key steps such as loan preparation, property viewing, signing the contract, paying the deposit, loan approval, and settlement, helping you complete the home purchase with greater peace of mind.

In Australia, most buyers should review the Contract of Sale and Section 32 before making an offer.

1 chart explains all

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1. Define the budget and loan pre-approval.

Before you start looking at houses, the most important step is to determine your budget.

Typically, buyers will first contact a bank or mortgage broker to apply for:

• Borrowing Capacity Assessment

• Loan pre-approval

Loan pre-approval is not the same as formal loan approval, but it can help you:

• Define the scope of the budget

• Improve bargaining power

• More confident during the auction

• Avoid the risk of loan failure after signing the contract

Generally, the following should be prepared:

• Proof of income

• Bank statements

• Deposit records

• Identity documents

• Information on overseas income (if applicable)

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2. Determine your needs

Next, you need to clarify your home-buying goals.

For example, owner-occupier buyers are concerned with:

• school district

• Commuting distance

• Community environment

• Apartment type and space

• Surrounding facilities

Investment buyers are interested in:

• Rental yield

• vacancy rate

• population growth

• Regional development

• Long-term appreciation potential

Different needs will influence your choices:

• Apartment

• Townhouse

• Detached house

• Off-the-plan (pre-construction condominium)

A loan pre-approval can help buyers understand their budget and strengthen their negotiating position.

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3. Start the house inspection.

Australian properties are typically sold through the following methods:

• Open Inspection: The agent will arrange a fixed time for open house visits.

• Private Inspection: Some properties allow private inspections by appointment only.

When viewing a property, it is recommended to focus on the following:

The house itself:

• Orientation and lighting

• Wall cracks

• Leakage marks

• Floor tilt

• Kitchen and bathroom conditions

• Electrical equipment

Additional information about apartments:

• Owners Corporation (Property Management)

• Special Levy

• Building defects

• Annual OC Fees

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4. Review the contract and Section 32

When you are interested in a property, the agent will provide:

• Contract of Sale

• Section 32 Vendor Statement

This is a crucial step in buying a home in Australia.

Section 32 typically includes:

• Land ownership information

• Is there a loan collateral?

• Council Rates

• Water Rates

• Owners Corporation Information

• Building permit

• Special charges

• Land planning restrictions

Buyers are advised to: ✅ Have a lawyer or conveyancer review the documents ✅ Check for any building defects ✅ Understand any potential additional costs.

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5. Submit an offer.

If it's not an auctioned property, buyers can typically:

• Verbal quote

• Written quotation

• Sign formal contract quotation

Quotations may be subject to conditions.

For example:

• Subject to Finance (Loan Terms)

• Subject to Building Inspection

• Subject to Due Diligence

These conditions can protect buyers to some extent.

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6. Pay a deposit.

After the seller accepts the offer, the buyer usually needs to pay:

• Small expression of interest deposit

  or

• 10% deposit

The deposit is usually held in a trust account.

The buyer will receive a Trust Receipt.

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7. Cooling-Off Period

In Victoria, most privately sold properties typically have the following characteristics:

A 3-business-day cooling-off period is available during which the buyer can cancel the contract, but usually incurs a small penalty fee.

However, there is usually no cooling-off period in the following situations:

• Auction purchase

• Contracts signed shortly before and after the auction

• Commercial properties

There is no cooling-off period for auction purchases.

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8. Formal Loan Approval

After the contract is signed, the bank will proceed to the formal approval stage.

Banks typically:

• Bank valuation of property.

• Review Contract

• Recognizing Revenue and Liabilities

After formal approval:

• The bank will issue a Loan Approval

• Buyer signs loan documents

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9. Pre-Settlement Inspection

In the days leading up to the final closing, the buyer typically conducts: Final Inspection

confirm:

• The property condition is consistent with that at the time of signing the contract.

• Electrical appliances are operating normally

• No new damage

• The seller has moved out (if the property is handed over vacant).

When buying an apartment, in addition to the price, you should also pay attention to the OC Fees and Special Levy.

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10. Settlement

This is the final step in the home buying process.

Usually in:

• 30 days

• 60 days

• 90 days

• Or a date agreed upon by both parties

Settlement day - lawyers, banks, and closing agents will complete the process:

• Funds transfer

• Property transfer

• Bank lending

• Stamp duty payment

After completion:

✅ Buyer officially becomes owner ✅ Agent hands over keys ✅ Ready to move in or rent out

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What other expenses need to be prepared when buying a property?

Besides the housing price itself, we also need to consider:

Only after settlement is completed will the property title be officially transferred to the buyer name.

Maintaining good communication can greatly reduce risks and enhance the home-buying experience.

What should overseas buyers pay attention to?

Foreign buyers typically also need to consider:

• FIRB Approval (Foreign Investment Approval)

• Foreign Purchaser Additional Duty

• Vacancy tax

• Stricter loan policies

Policies may vary from state to state.

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While buying residential property in Australia involves multiple steps, the overall process is well-established and protected by law.

In simple terms, the home buying process generally includes:

1. Budget and Loan Pre-approval

2. Viewing a house

3. Reviewing contracts and Section 32

4. Submit a quote

5. Pay deposit

6. Formal loan approval

7. Pre-delivery inspection

8. Settlement formal delivery

For first-time homebuyers, it is recommended to consult with:

• professional intermediaries

• loan broker

• Conveyancer/Lawyer

Maintaining good communication can greatly reduce risks and enhance the home-buying experience.

Disclaimer

The information provided in this article is for general informational purposes only and does not constitute legal, financial, taxation, or real estate advice. While every effort has been made to ensure the accuracy and currency of the information, laws, regulations, lending policies, and market conditions may change over time. Readers should seek independent advice from qualified professionals, including licensed solicitors, conveyancers, mortgage brokers, accountants, or other relevant advisors before making any property purchase, sale, investment, or financing decisions. Any figures, fees, timelines, or processes mentioned are general examples only and may vary depending on individual circumstances and properties. Core Elite Real Estate accepts no liability for any loss or damage arising directly or indirectly from reliance on the information contained in this article.