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Buying a home | Series two: Getting the money ready

So you have signed the Form 1 and the Contract of Sale – what now?

The next steps involve organising your money.

The Deposit

Once the cooling-off period has ended, or once you have waived your cooling-off rights, you will be required to pay a deposit. The value of the deposit is specified in the Contract of Sale and can usually be between 5 to 10% of the purchase price.

Failing to pay the deposit can place you in default of the contract. Due to this, it is crucial that you have prepared sufficient funds for this payment.

The Mortgage

A mortgage involves the borrowing and repayment of money and interest to a lender in exchange for the right to take your new property as security in case you default on payments. This means that if you are unable to repay the lender – usually a bank - they can take and sell your house to satisfy their repayments.

This is a big financial decision, and it can also be slow to organise. It is recommended that you contact your lender before signing the contract to understand better whether a loan for the amount required to meet the purchase price of the property is likely to be approved.

First Home Owner Grant

If you are a first home owner, you may also be eligible for the First Home Owner Grant (FHOG). The FHOG scheme is a national scheme that offsets the impact of GST on ownership, and allows for a one-off payment if you are:

1. A first home-owner;

2. Purchasing a newly built property;

3. Of less than $575,000.00;

4. Which has never been previously sold or occupied

If you satisfy the above requirements, you may be eligible for a grant of up to $15,000.00 providing that you live in the new home for 6 months or more within the first 12 months of purchase.

This can also be a slow process, so being prepared and starting early is preferable.

Stamp Duty

Stamp duty is incurred when a property is transferred and is calculated by reference to the purchase price or the market value of the property, whichever is greater.

Stamp duty must be paid upon transfer or else you will not be registered as the new owner. A solicitor or conveyancer can guide you through the arrangement of stamp duty payment and assist with your obligations.

It is also important to take Stamp Duty into consideration when applying for a loan, or ensuring that you have sufficient funds available to cover the Stamp duty payable if your loan does not cover this amount.

Conveyancing Documents

To become the legal owner of a new home, particular conveyancing documents must be completed and lodged. A conveyancer or solicitor should be engaged to complete this process, as conveyancing can be very technical. Lenders often require conveyancing documents before approving a home loan, so seeking conveyancing services early is advised to avoid extending the waiting period for loan approval. Delays in receiving loan approval can also result in a delay of settlement, which may result in penalty interest charged by the Vendor.


Once the conveyancing documents have been signed, and all your finances are in order, your Settlement day will be just around the corner. Look out for Part 3 of this series to find out more about this special day.

Want to know more?

If you are looking for a Conveyancer, or would simply like further information on the conveyancing process, please contact CPC Lawyers:

Call: (08) 7325 0219


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