First Home Buyers Guide for Western Australia
Step by step guide to buying your first home in Western Australia
Planning to take your first step into the world of property? The entire industry can be extremely complex and confusing for newcomers - and being such a big commitment, it pays to get it right the first time. To help you get started in buying your first property, here are the resources and processes you will need to purchase your first home in Western Australia.
Which ways can I buy my first home in Western Australia?
When buying a property through tender, you'll make a single offer, which includes a deposit of up to 10 per cent of the asking price. The seller will then decide whether or not to accept the offer.
When you buy a house at auction, you'll need to meet a reserve price which, in essence, is what the house will sell for at a minimum. Should the bid rise higher than the reserve (as is often the case) the highest bid will win. As soon as the auction is over, the winning bidder is required to sign the contract on the day.
Purchasing a home via private treaty is perhaps the most common way to buy your new Western Australia home. The seller will choose a suitable price, and the real estate agent will then begin negotiations with interested parties, with the aim of getting as close to that price as possible.
Working out how much you can afford
Before you go off looking for homes, you need to find out how much you can borrow first. This will differ from lender to lender, and will be influenced by your personal circumstances - from your income to how much you can put down on a deposit.
First home buyers looking to purchase an established property can still apply for the Home Buyers Assistance Account. This provides up to $2,000 for incidental costs associated with buying a property, such as inspection fees, mortgage insurance premiums, and so on. It is available from the Department of Commerce.
Typically, you'll need around 10 to 20 per cent of the value of you home for use as a deposit. A lower deposit might mean that you have to take out lender's mortgage insurance, designed to protect the lender if you default on the loan.
LJ Hooker's Home Loans service has a range of products for you to choose from, with a raft of mortgages designed for first-time buyers.
The Western Australia First Home Owners Grant
That is not the end of your choices, though. As a first home buyer, you are in a unique position in the property market, as you have access to a number of assistance programmes. Firstly, there is the WA first home owner grant (FHOG), which provides up to $10,000 to eligible people, available from the Department of Finance. To be eligible for the FHOG, you must be an Australian citizen or permanent resident, and above the age of 18. Additionally, you cannot have owned a home prior to to the 1 July, 2000. You can read a full overview of the FHOG right here.
By using any of these grants, you can heavily mitigate the costs of buying your first home in WA.
The hidden costs of buying your first home in Western Australia
Of course, buying a home for the very first time is always going to come with a few associated costs. Here are a few of them.
- Stamp duty is a tax levied by the Western Australia government, based on the value of the house you're buying. This means that it can vary widely, so the state's stamp duty calculator is a valuable tool in figuring out what you'll owe. However, as a first home owner, you could be entitled for a reduced rate of transfer duty, especially if you qualify for the FHOG. You can find out more about the First Home Owner rate of Duty on this informative fact sheet.
- Legal fees can also vary, but usually fall between $500 and $3,000, depending on how many professionals you utilise.
- Applying for a loan can sometimes means you'll be charged a fee of up to $1,000, but this is uncommon. Often, the lender will waive the fee.
- A valuer will typically charge you around $300-$500 for their services.
- If you borrow more than 80 per cent of your new home's price, you could be charged lenders mortgage insurance. This one-off payment sometimes reaches up to $10,000.
- To have your new house inspected, expect to pay around $300-$400. A strata report is slightly less, at $200.
- Council rates and strata fees begin as soon as settlement does. You should keep around $500 to $800 in reserve to account for these costs.
Be sure to speak to the team at LJ Hooker to find out more about these fees.
Choosing your first house in Western Australia
Property reports and research
Taking a detailed look at the property market will give you a greater understanding of where you can pick up a house in Western Australia, and how much it will set you back.
- You can ask your local office for a local market report.
- By pointing your browser in the direction of CoreLogicRP Data or Australian Property Monitors, you'll be privy to a wealth of property data and other information.
- Additionally, websites such as realestate.com.au, domain.com.au and ljhooker.com.au will give you a comprehensive view of what's on the market.
After you've scoured the market, you'll probably have an idea of the kind of place that you'd like to buy - an apartment a house, or perhaps something a little leftfield.
House hunting in the Western Australia property market
When your search for a home in Western Australia begins, be sure to get in touch with your local LJ Hooker estate agent. Not many know the market better than us, and we'd like nothing more than to find you that perfect home. It's also well worth taking a look in the local newspaper's property section, as there are new listing put up on a constant basis.
This is also a good time to start looking for other property professionals, such as a conveyancer from the Western Australia division of the Conveyancers Institute.
Importance of inspections
It's vital that you thoroughly inspect any potential property before you put in an offer. This way, you'll put yourself in a stronger bargaining position when it comes to negotiating price. This can save you plenty of money in the long run, so don't skip the inspection part of the process.
Contract of sale
The contract of sale is a hugely important document when buying your first house in Western Australia. That's because it includes such details about the transaction as:
- Contact details of the seller, buyer and selected others involved in the sale,
- Details of the deposit,
- The date of the final settlement, as well as when the title will be transferred,
- The length of the cooling-off period (in Western Australia, there is no cooling-off period, unless one is inserted to the contract)
- Other important conditions of the sale.
The contract of sale can be a complicated document, so it's worth your time to hire a solicitor to help you power through it. Additionally, this will help you smooth out any difficulties that may arise as and when they occur.
Finalising the sale
When you buy at auction, you forfeit your right to a cooling-off period, if one was ever inserted into an initial contract. Additionally, other conditions are taken away, such as the right to have the home inspected. Should you win the auction, you're required to pay the deposit on the day. Hence, you need to ensure that it's ready in your account once the auctioneer declares you the victor.
If you don't fancy the rough-and-tumble of the auction, why not have an LJ Hooker buyer's agent stand in for you? This can take the stress out of what can be a tough few minutes, and you can rest assured that your agent will attempt to get you the best deal possible.
When you've found your dream house, get in touch with the team at LJ Hooker. We'll assist you in negotiating the price of a home, help you to sort out inspections and finalise the moving in date. This involves working out how much you can afford to pay, and whether to go in high or low with your first offer. Each offer and counteroffer made must be signed by you, and the seller will choose whether or not to reject the offer. Often, the price will be repeatedly negotiated until a final figure is agreed upon.
Once this happens and everyone is happy, the contracts of sale will be signed and exchanged, and the deposit paid. Lastly, the settlement process begins - and you're almost home!
Contract exchange and settling the sale
Once the contracts are exchanged, settlement begins. This is when last details are finalised - paperwork checked and finance monitored, for example. You cannot move in until after your settlement date - this is usually between 30 and 90 days after the period begins.
This short guide is a great place to start your research into buying your first home in Western Australia, but for thorough expertise you should speak to the team at your local LJ Hooker office. They can help answer any further questions you have about your purchase and the process. Remember, it may seem intimidating, but with the right people on your side, buying your first home doesn't have to be a strain!