Buying your first home feels overwhelming, but the right preparation makes all the difference. We at Home Owners Association have guided thousands through this process successfully.

These essential tips to buying first home will help you avoid costly mistakes and secure the property you want. Smart planning today leads to homeownership tomorrow.

Understanding Your Financial Position

Your borrowing capacity depends on more than just your income. Australian lenders assess applications based on various criteria, with most approving loans where total repayments don’t exceed 30% of gross income. The Australian Bureau of Statistics shows first-time buyers allocate around 30% of income to mortgage payments. Calculate your true capacity with online calculators from major banks, then reduce this figure by 10% to account for interest rate rises and unexpected expenses.

Your Credit Score Controls Your Options

Your credit score directly impacts your interest rate and loan approval chances. Scores above 800 secure the best rates, while anything below 600 makes borrowing difficult. Check your score free through Equifax or Experian, then boost it by paying all bills on time for six months before you apply. Pay down credit card balances to below 30% of limits and avoid new credit applications.

Each 100-point improvement in your score can save thousands in interest over the loan term.

Additional Costs Mount Quickly

First-time buyers often underestimate additional costs, which typically add 5-7% to your property price. Stamp duty varies by state but averages $15,000-$25,000 for properties under $600,000. Factor in building inspections at $400-$800, legal fees around $1,500-$2,500, and moving costs of $1,000-$3,000. Set aside an extra $5,000 for unexpected issues during settlement. The Australian Securities and Investments Commission recommends budgeting 5% of property value for these costs.

Government Schemes Cut Your Deposit

The First Home Super Saver Scheme lets you contribute up to $15,000 per financial year and up to $50,000 across all years through your superannuation fund (with lower tax rates than regular savings). The 5% Deposit Scheme allows purchases with just 5% down, while single parents can access it with only 2%. These programs help you avoid Lenders Mortgage Insurance and enter the market faster. Check eligibility requirements early, as some schemes have income caps and property price limits.

Once you understand your financial position, the next step involves finding the right property in a location that matches both your budget and lifestyle needs.

Finding the Right Property and Location

Location determines both your lifestyle and long-term wealth creation potential. CoreLogic data shows suburbs within 10 kilometres of major CBDs delivered average annual growth of 6.2% over the past decade, compared to 3.8% for outer areas. Target suburbs with planned infrastructure projects like new train lines or shopping centres, as these drive property values up by 15-20% within five years of completion.

Check council websites for development applications and master plans. Suburbs with good schools, low crime rates (according to state police statistics), and walkable amenities consistently outperform others.

Focus on areas where median prices sit 10-15% below neighbouring suburbs but share similar characteristics.

Master the Inspection Process

Attend open homes on Saturday mornings when serious buyers inspect properties, not Sunday afternoons filled with casual browsers. This approach gives you better insight into genuine competition levels. Book private inspections for properties you’re serious about, as agents share more honest feedback during one-on-one sessions.

Take photos of structural elements, check water pressure in all taps, and test electrical switches. Ask agents directly about previous offers and vendor expectations rather than play guessing games. Most agents will give you a realistic price range if you demonstrate genuine capacity with pre-approval letters.

Negotiate Like a Professional

Submit offers 5-10% below the price for properties on the market longer than 30 days, but only 2-3% below for fresh listings in hot markets. Include subject to finance and inspection clauses even with pre-approval, as these protect you from unexpected issues. Set a maximum price before inspections and stick to it regardless of emotional attachment.

Real estate agents work for vendors, so get independent advice from buyer’s agents or experienced property investors. The Australian Competition and Consumer Commission reports buyers often exceed their initial budget due to auction fever and poor negotiation strategies.

Once you secure the right property at the right price, the legal and financial processes require careful attention to protect your investment and complete the purchase successfully.

Navigating the Legal and Financial Process

Compare Lenders for Maximum Savings

Apply to three different lenders simultaneously to secure the best interest rate, as rates vary between institutions. Major banks offer standard rates, but credit unions and online lenders often beat them by 0.2-0.4%. Submit identical applications within a 14-day window to minimise credit score impacts (as multiple inquiries count as one check during this period).

Non-bank lenders like Athena and Tic:Toc frequently offer rates 0.5% below major banks but require stronger financial readiness. Negotiate with your preferred lender when you have competing offers, as most banks will match rates to secure quality borrowers.

Professional Inspections Prevent Costly Surprises

Book building and pest inspections immediately after your offer gets accepted, not during the cooling-off period when time pressure mounts. Building inspections cost $400-$600 but identify structural issues that can be costly to repair. Pest inspections add another $200-$300 but catch termite damage early before it becomes catastrophic. Choose inspectors with current licences through Master Builders Australia, not the cheapest options that miss problems. Request detailed reports with photos and cost estimates for any issues found, then negotiate repairs with vendors or walk away if problems exceed $5,000.

Legal Protection Requires Professional Help

Engage solicitors or conveyancers before you sign contracts, as mistakes cost thousands in penalties or lost deposits. Conveyancers charge $800-$1,200 for standard transactions while solicitors cost $1,500-$2,500 but handle complex issues better. They review contracts for unfair terms, arrange title searches, and coordinate settlement dates with all parties. Good legal representation catches issues like incorrect property boundaries, outstanding council rates, or vendor finance problems that could derail your purchase. Never sign contracts without professional review (regardless of agent pressure about other buyers waiting).

Final Thoughts

Your first home purchase becomes manageable when you follow proven tips to buying first home systematically. Calculate your true borrowing capacity, check your credit score, and secure pre-approval from multiple lenders. Research suburbs with growth potential, attend inspections strategically, and negotiate with realistic price limits.

Professional building inspections and legal reviews protect your investment from costly surprises. The Australian Bureau of Statistics shows first-time buyers who follow structured approaches achieve homeownership 18 months faster than those who don’t plan properly. Smart preparation today creates financial security tomorrow through property ownership that builds long-term wealth.

Property ownership delivers average annual returns of 6-8% over decades according to CoreLogic data (through capital growth and rental income potential). We at Home Owners Association support Melbourne homeowners with trade pricing and expert advice that maximises property investment success. Well-located properties consistently outperform other investment options when you make informed decisions.