Tips for First Homebuyers: How to Make the Process Smoother

Buying property for the first time can be an intimidating prospect. Newcomers face many unknowns, such as new terminology and concepts, as well as a range of financial and legal hurdles to overcome in order to successfully finalise a purchase. Having a solicitor in your corner with expertise in conveyancing can help a great deal in getting through the process

To make the process a little less bumpy, we thought we’d share a few tips that might help you better navigate the complexities of buying a home in QLD for the first time.

Lower Your Costs With A First Home Owners Grant

If you’re looking at buying a home for the first time in Queensland, you need to put down a minimum 20% deposit to avoid paying the lender's mortgage insurance premium. However, putting down such a hefty chunk of cash can be a heavy burden for first home buyers, who most likely don’t have a lot of capital to work with.

Thankfully, the First Home Owners Grant is available to all first home buyers in Queensland. This grant aims to help newcomers get a foothold in the property market. By applying for this grant, first home buyers can access $15 000 to put towards their down payment or to pay for costs such as stamp duty, title searches, and legal fees.

The only catch is that to qualify for the grant, the home must be valued at under $750 000 and must be a newly built house, townhouse, unit, or duplex.

Be Prepared For Hidden Costs

Unfortunately, the price tag on a new home isn’t 100% representative of the actual cost, as there are a range of additional hidden costs. If you don’t budget for these ahead of time, you could run into delays as you try to find a way to pay these costs.

You can find a more detailed breakdown of these costs in the Queensland Department of Fair Trading's Property Smart handbook. However, here is a brief summary of the costs you can expect to pay:

● Transfer duties are applicable unless certain concessions or exemptions apply. Landholder duties are also due if excluded interests apply to your purchase.

● Mortgage lenders will also charge loan establishment fees of up to $1 000, with transaction legal fees also potentially ranging from about $1 500 to $3 000. Lender’s mortgage insurance can cost up to $10 000, although this depends on whether or not you were able to put down a large enough deposit.

● Aside from these costs, factor in about $400 to $600 for building and pest inspections, as well as about $300 to $500 for valuation fees. If the home comes with a swimming pool, then an additional $170 to $350 should be budgeted for pool inspections.

● Many people forget to factor in moving costs to occupy the new home. These costs can range from $500 to $3,500, depending on the distances involved.

● Land tax is another annual cost that you need to factor in. It is due by midnight on June 30 each year. Land tax rates vary depending on the property's value. The good news is that for properties valued at less than $600 000, no land tax is payable.

● Note that if you end up cancelling the purchase deal during the cooling-off period, you’ll be liable for 0.25% of the purchase price.

Hire Professional Property Lawyers and/or Conveyancers

Dealing with all of the above can be complex. The paperwork involved in purchasing a house can be significant and, for many, overwhelming. What’s worse is that mistakes and omissions can lead to hefty financial and potential legal consequences down the line.

Therefore, it’s well worth your while to hire a professional property solicitor and/or conveyancer to help you navigate the process. This, more than any other factor, will help tremendously in smoothing everything out.

With an experienced legal professional in your corner, you can rest assured that all necessary legal documentation is handled correctly and that any potential problems with the purchase are detected and resolved early on.

Lawyers don’t just deal with the paperwork – although that’s a significant part of what they do. They also carry out thorough due diligence on the property to determine any potential legal issues that could affect the property's value or your ownership rights once a purchase has been finalised.

Lawyers can also help facilitate the negotiation and settlement process, coordinating all parties and overseeing the transfer of funds and property rights to ensure that all is done correctly and legally.

Knowing that these stressful aspects of buying a home are professionally handled can provide first home homeowners with unparalleled peace of mind.

Gullickson Lawyers, we offer expert conveyancing services to help new homeowners have a smooth property purchasing experience.

Contact us now to get an experienced solicitor on your side today.