First-Time Home Buyer in Perth? Here's What You Need to Know

For many first-time home buyers in Perth, purchasing a property can seem like an overwhelming process, as it involves navigating a complex process with numerous steps, legal requirements, and financial commitments. Buyers must consider securing a mortgage, understanding interest rates, budgeting for hidden costs like stamp duty and inspections, and dealing with the legal aspects of conveyancing. On top of that, there's the emotional pressure of making a significant long-term investment and the fear of making costly mistakes. The property market can be competitive, adding to the stress as buyers may feel pressured to act quickly to secure their desired home. All of these factors combined can make the experience feel daunting for those unfamiliar with the process.

However, with the correct information and professional guidance, it can be a smooth and rewarding experience. Whether you're in the early stages of saving for a deposit or actively looking for your dream home, I have compiled this guide to offer expert insights to help you make informed decisions.

Start with a budget and pre-approval

The first step in your home-buying journey is understanding your budget. It's crucial to determine how much you can afford before you start house hunting. Factor in the following:

• Your deposit (usually 10-20% of the property's price)
• Ongoing costs like mortgage repayments, utilities, rates, and insurance
• Government fees, including stamp duty and conveyancing fees

Obtaining pre-approval from a lender is highly recommended. This gives you a clear idea of your borrowing capacity and ensures you're ready to make an offer when you find the right property. Having pre-approval also signals to sellers that you're a serious buyer.

Take advantage of government assistance

The Western Australian and Federal governments offer a range of initiatives to help first-home buyers get on the property ladder.

First Home Owner Grant (FHOG)

The WA First Home Owner Grant offers $10,000 to first-time buyers purchasing or building a new home valued at up to $750,000. This grant can significantly reduce the financial burden, making homeownership more achievable.

Stamp Duty Concessions

First-time buyers may be eligible for a stamp duty exemption or concession in WA. For homes valued up to $430,000, you can receive a full exemption. Homes priced between $430,000 and $530,000 receive a reduced rate.

First Home Super Saver Scheme (FHSSS)

Under the Federal Government's FHSSS, first-time home buyers can make voluntary contributions to their superannuation account (in addition to their standard employer contributions) and later withdraw those additional savings to use toward a home deposit.

These voluntary contributions can be either before-tax (concessional contributions), such as salary sacrifice, or after-tax (non-concessional contributions). The advantage of this scheme is that it allows individuals to benefit from the tax-efficient environment of superannuation, where the tax on contributions and earnings is lower than regular savings accounts.

Once the buyer is ready to purchase a home, they can withdraw up to $50,000 of these voluntary contributions, along with any associated earnings, to help fund their deposit. The scheme is designed to help buyers save faster and take advantage of the tax benefits associated with superannuation contributions.

Understand the conveyancing process

Once you've found the right property and your offer is accepted, the conveyancing process begins. Conveyancing involves transferring legal ownership of the property from the seller to the buyer, and it's essential that this process is handled correctly. As experts in conveyancing, we can help you secure your property and enjoy the process along the way by removing all the unnecessary stress.?

There are a few steps first-home buyers should be aware of:

• Ensure the contract of sale is thoroughly reviewed by a conveyancer to identify any unusual conditions that could pose risks. These conditions could include clauses that limit your rights as a buyer, unexpected costs, or obligations that are not in your best interest. A conveyancer can help you understand these conditions and negotiate with the seller if necessary.
• Your conveyancer will check for outstanding rates, zoning issues, and land-use restrictions that may impact your future plans for the property. This confirms that the seller legally owns the property and that it is free from encumbrances such as mortgages or caveats. A caveat is a legal notice that someone else has an interest in the property, which could affect your ability to buy or sell the property. Your conveyancer will ensure that the property is free from any such encumbrances before you proceed with the purchase.
• They will also arrange the settlement date, ensuring all necessary documents are signed, funds are transferred, and the Title is lodged in your name.

Common pitfalls to avoid

Buying your first home is a major investment, and there are several pitfalls that can catch first-home buyers off guard. Here's what to watch out for:

Rushing into a purchase

It's easy to get swept up in the excitement of buying your first home, but rushing into a purchase without doing your due diligence can be costly. Take the time to inspect properties carefully and review contracts before committing.

Underestimating additional costs

Aside from the deposit and mortgage repayments, there are additional costs such as stamp duty, lender's mortgage insurance (if your deposit is less than 20%), building inspections, and ongoing maintenance. Make sure you budget for these expenses.

Skipping the building and pest inspection

Before you commit to purchasing, always arrange a building and pest inspection. These inspections can uncover structural issues, pest infestations, or water damage that might not be obvious during an open house.

Not seeking professional advice

It's tempting to handle everything yourself to save costs, but professional advice from a mortgage broker, conveyancer, and real estate agent is invaluable. Their expertise can help you avoid costly mistakes and ensure that your home purchase goes smoothly.

Most affordable suburbs for first-home buyers in WA

If you're looking to buy a home in Perth, choosing an affordable suburb can make a big difference to your finances. According to REIWA, some of the most affordable suburbs for first-home buyers in WA include:

• Armadale – With a median house price of around $290,000, Armadale is one of the most affordable options within commuting distance to Perth's CBD.
• Gosnells – This suburb offers a good mix of amenities and affordable housing, with a median price of $375,000.
• Medina – Situated south of Perth, Medina boasts a median house price of $300,000 and is ideal for those seeking a quieter lifestyle.
• Baldivis – Known for its family-friendly community, Baldivis has a median house price of $460,000.
• Midland – For those looking for a combination of affordability and proximity to the city, Midland's median price of $395,000 makes it an attractive option.

When planning where to locate, it's essential to research these areas to find a suburb that aligns with your lifestyle, budget, and future growth prospects.

Always ensure you get professional help

While buying your first home is exciting, it can also be challenging to navigate the various legal, financial, and logistical aspects. At WA Settlements, we specialise in providing professional conveyancing services to first-home buyers. From reviewing contracts to ensuring a smooth settlement, our team is here to support you every step of the way.

We understand that buying a home is one of the biggest decisions you'll ever make, and we're committed to making the conveyancing process as stress-free as possible.

In conclusion

Purchasing your first home is a significant milestone, and with the right guidance, it can be a smooth and fulfilling experience. By setting a clear budget, taking advantage of government assistance, and enlisting professional help, you can confidently step onto the property ladder. Avoid common pitfalls by doing your research, taking your time, and seeking expert advice when needed.

For more detailed advice on the conveyancing process or to discuss how we can help with your first home purchase, visit our website, www.wasettlements.com.au