Even if you don’t know anything about the home-buying process in Australia, we have prepared a step-by-step guide here to provide you with everything you need to know. Please note from the beginning that this guide is specifically for Melbourne and the state of Victoria, where Jas Stephens Real Estate operates, and the process may vary depending on the state.
First of all, congratulations on deciding to buy a home. This is a big step and can change your future. We assume that, for whatever reason, you no longer want to live in a rental, your family is growing, or other reasons. You may not be sure what type of home or suburb suits you, or what steps you need to take. Don’t worry, everything is explained in this guide. You simply need to follow the steps below.
A glossary of terms you should know:
Conveyancer:
A lawyer who reviews all property-related documents on your behalf to ensure there are no legal issues.
Buyer’s Agent:
A person, group, or organisation that can select and purchase a property on your behalf if needed. If you don’t have time to search for properties or prefer someone else to handle it, you can hire a buyer’s agent.
Cooling-Off Period:
A period during which the buyer has the right to change their mind. Please note that this is not applicable under auction conditions.
Mortgage Broker:
A professional who finds the best loan options for you based on your financial situation.
1. Finance & Budgeting: How much can you spend on a home?
If you’re not planning to buy your property outright, you’ll need a loan like most people do, but how much? Finance and budgeting will help you understand exactly how much you can afford, giving you a clear budget instead of guessing and potentially ending up disappointed. Before you start looking for a property, having your finances organised, setting a budget, and getting pre-approval from a bank is essential.
Every individual or family has a limited borrowing capacity based on their savings, job situation, income, and overall credit profile. Here are your main options:
A. Hire a mortgage broker:
Mortgage brokers assess your situation and, based on their market knowledge, search for and recommend the best available loan options. After being assessed, you simply proceed with the recommended bank and complete the process.
B. Choose a bank yourself:
You can visit different banks and compare their loan options and conditions yourself. Some websites compare home loans, and you can review different bank websites directly, but doing all of this on your own can be time-consuming.
Pro Tip: Since many mortgage brokers are paid by the lender, Jas Stephens recommends using a broker if possible.
C. Use your current bank:
For convenience, you can also apply for a loan through the bank where you already have an account. Simply visit a branch and let them know you want a home loan, and they will guide you.
Pro Tip: We do recommend comparing the different interest rates available in the market, as you could potentially save a significant amount of money.
The home loan process:
As part of the process, the bank, or your mortgage broker, will request documents such as payslips and identification, and based on that, they will tell you how much you can borrow, the interest rate, and the loan term (usually around 30 years).
If you agree to their terms, you will receive a pre-approval. This means that if you purchase a property within the specified price range, the bank will provide the loan.
Pro Tip: Your pre-approval usually lasts for 3 months, and in some cases, 6 months.
2. Additional costs of buying a home
Buying a property involves more than just the purchase price. You need to include additional costs in your budget, such as conveyancer fees, property insurance, government charges, and body corporate fees for properties with shared land. Also note that in most cases, you will need to pay 10% of the property price as a deposit before settlement, unless agreed otherwise with the agent and vendor. Your money will be held in a trust account until settlement. Typical timeframe for settlement is (e.g. 30–90 days in Victoria), and this is also negotiable with the agent and the vendor.
3. Choosing the right suburb
Naturally, most of us want the best home in the best suburb in Melbourne, but at this stage, you need to think about what you really want from your future property.
Is it proximity to a good school, or the CBD, or a larger land size?
Based on your needs and the budget approved by your bank, you should identify your target suburb.
In the article “The 2026 First Home Buyer Guide to Purchasing a Property in Melbourne’s Inner West,” we’ve provided a complete guide on how to choose between suburbs in Melbourne’s Inner West, our area of expertise, and what steps to take. If you’re considering inner west suburbs, we strongly recommend reading that article. The Best Areas to Buy Property in Melbourne’s Inner West.
Let’s assume you’ve selected five suburbs based on your needs and budget but still don’t know which suburb or property will be right for you. This is where you need a list of deal breakers.
We are assuming you are familiar with different property types in Australia, if this is not the case for you, please take a look at What Are the Different Property Types in Australia? page.
4. Deal breakers in buying a home
You probably have a general idea of what you want in your future home, and maybe even a long list, but have you thought about what you absolutely don’t want?
We recommend having a list of “non-negotiable” factors in mind to make your decision easier. For example, at Jas Stephens Real Estate, we see dozens of properties each week and meet many buyers across the Inner West and having exclusion criteria helps.
For example,
- Does it matter if the home is on a main road?
- What if it’s next to a school?
- Is being near a park a positive or a negative for you?
If you have no idea, you can get closer to your preferences by reviewing property listings. For example, if you want to buy in Footscray, browse listings there and ask yourself why a property doesn’t appeal to you. Footscray Real Estate Listings.
Having a prioritised list of deal breakers will make choosing your ideal property much easier.
5. Inspecting properties, what should you expect?
By reviewing property listings, you’ll likely find homes that seem close to your preferences, but you need to inspect properties in person.
Each listing has inspection times, and you simply attend at the scheduled time.
When visiting properties listed by Jas Stephens Real Estate, our team is always present to answer your questions so you can make a confident decision. You can also hire a professional inspector, typically costing between $300 and $1,000.
6. Everything you need to know about the auction and private sale
Generally, properties are sold either via private sale or auction, and this is specified in the listing.
What is a private sale?
In a private sale, the owner sets a price range they are willing to accept. You and other interested buyers submit your offers to the real estate agent, who presents the offers to the seller.
How does buying at auction work?
If a property is sold at auction, all interested buyers attend at a set time and place and submit bids under the guidance of an auctioneer. The property is sold to the highest bidder.
Auctions can feel stressful for some people, but by attending a few, you’ll understand the process.
At Jas Stephens Real Estate, we always aim to answer all your questions before the auction so you can bid with confidence.
An important point about auctions is that if you change your mind after winning, you cannot withdraw. The property is sold “as is,” so you must be sure your finances are ready and that you’re confident in the property before bidding.
What are off-market properties?
Off-market properties are those that real estate agents are aware of but have not yet been advertised online.
To be notified about these opportunities, you can register your details through the off-market page of Jas Stephens Real Estate, and we will send you suitable properties.
7. What happens after buying a home?
Let’s assume you’ve purchased a property at auction or your offer has been accepted in a private sale. What happens next?
At this stage, our team will guide you through the remaining steps. You will sign the contract, notify your bank of the settlement date, and your conveyancer will review the documents to ensure everything is in order. Then you wait until settlement day.
On that day, the bank transfers the funds to the seller, and you can move into your new home.
8. Moving Settlement Tasks
Ahead of setting, there are a few practical things to take care of to make the move smoother.
You’ll need to organise the transfer of your utilities, including electricity, gas, water, and internet, so everything is up and running from day one. It’s also important to update your address with banks, government services, and any subscriptions so all your important mail reaches you without issues.
Finally, make sure your home insurance is activated from the day of settlement. This ensures your new property is protected from the moment you take ownership, giving you peace of mind as you move in and get settled.
Frequently asked questions about buying a home in Melbourne
If the property value is lower than the agreed purchase price, does it affect your loan?
The bank will also assess the property value. For example, if you are approved for a $1 million loan but want to buy a property worth $900,000 for $1 million, the bank may only lend $900,000. This is why you should keep your bank informed at every stage so they can alert you to any issues.
How do real estate agents help you make a better purchase?
Real estate agencies like us at Jas Stephens Real Estate, which have been active in specific Melbourne areas for years, understand the local market very well. We monitor it daily and have up-to-date insights, allowing us to provide valuable guidance.
Is it necessary to have a mortgage broker?
No, but they can help make the process easier and are the experts in the field. They are also most often not paid for by you, but by the lender.
What should I know about Government Grants?
As this question needs to be answered in complete detail, we invite you to read The 2026 First Home Buyer Guide to Purchasing a Property in Melbourne.