Your First Home Buyer Guide to NSW
Written by Veronica Morgan.
First-time homebuyers often have a lot of questions and concerns as they navigate the process of purchasing their first home. Below we have answers to the top five questions you probably have, plus links to podcast episodes and case studies about buying your first home in New South Wales. And keep scrolling, because we also have specific information on the essential property buying rules in NSW. In case you didn't know, every state and territory in Australia is very different...
Here are the top five things that first home buyers in NSW typically want to know:
1. Budget and Affordability:
- How much can I afford to spend on a home?
- What state based first home buyer grants are available?
- What is the required deposit?
- What other costs are involved, such as stamp duty, inspection costs, and homeowner's insurance?

Now, of course the answers to the first question will depend on exactly where in NSW you are looking to buy and what type of property you're after. Your budget will depend on your deposit, your income and your borrowing capacity, which is why we recommend you speak with a mortgage broker to get advice sooner rather than later.

In NSW there are grants and concessions for first home buyers and these are subject to certain requirements like income limits and purchase price caps. Check out this link for the most up to date information. Just be wary of any grant that is contingent on buying a brand new property as these can be risky for first home buyers.

The standard deposit in NSW is 10%, although you can often request to pay as little as 5%.

We've covered all the other first home buyer costs in this article and as a general rule of thumb, we recommend setting aside 5% of the purchase price for additional costs.

2. Mortgage Options:
- What types of mortgages are available, and which one is best for me?
- What is the interest rate, and how does it affect monthly payments?
- What is the difference between fixed-rate and adjustable-rate mortgages?

As mentioned above, we highly recommend that you speak with a mortgage broker early in your first home buyer journey, even before you have saved what you think you need to save. You might be surprised to find that you can buy sooner than you thought once you get the right advice around your borrowing strategy.

3. Location and Neighbourhood:
- What neighbourhoods or areas are suitable for my lifestyle and needs?
- Are there good schools, public transportation, and other amenities in the area?
- What is the potential for property value appreciation in the chosen location?

Locations across NSW vary substantially and you'll find you'll fast become a local expert while you're actively house hunting. We've had conversations with buyers agents from across NSW on the podcast, learning about areas such as Orange, Dubbo, Bathurst & Wagga to the west of the state, Wollongong, Nowra & the South Coast and a case study with a first home buyer who used a buyers agent on the Central Coast.

"Where should I buy?" is the number one question we get asked by first home buyers NSW. There are a number of things to consider when you're working out where to buy and it pays to take the time to explore different areas. The starting point for this exercise is a thorough inventory of what you need, both now and in the future, and a good understanding of the demands of your lifestyle.
4. Home Inspection and Condition:
- What should I look for during a home inspection?
- Are there any red flags or potential issues with the property?
- What is the age and condition of major components like the roof, plumbing, and electrical systems?

You'll find different types of property in different locations will have different types of building issues. For example, in NSW ... termites, rising damp, heating/cooling

You should always get a building & pest inspection before you purchase so that you're aware of any deal breakers, as well as both short and long term maintenance requirements.

5. Real Estate Process:
- How does the homebuying process work from start to finish?
- What is the timeline for going unconditional on a home?
- What are the roles of real estate agents, lenders, and other professionals in the process?

You may be surprised to know that the laws governing real estate transactions vary substantially across Australia, which is why we compiled a podcast series on state based rules. We interviewed buyers agents who are local specialists in state and they shared what you need to know before buying your first home in NSW.

Here's what we covered in the episodes:

The auction registration process. You must register before auction if you want to bid. And you must be ready to buy with no cooling off period.
The vendor can make one bid in NSW. And dummy bidding is illegal.
When you ask for a price guide you can be fairly sure that it's expected to sell for more. In NSW, the agent can quote 10% less than the maximum they told the owner to expect.

Making an offer
Can you make conditional offers? You can make an offer subject to different conditions, however the property won't be taken off the market until you exchange contracts. You can't make it subject to finance.
The sorts of conditions that are typically used. Buyers often ask for a shorter or longer settlement period or a smaller deposit than the standard 10%.
What cooling off period buyers get.
Penalties for a buyer who terminates during the cooling off period. You'll lose 0.25% of the purchase price if you pull out of the deal within 5 business days. You can pull out for any reason.
An offer is binding when contracts have been exchanged. This means both parties have signed, a deposit has been paid and the vendor has been given the buyer's contract and vise versa.
Can buyers get gazumped? Yes, during the period between offer and acceptance and exchange of contracts.

Vendor disclosure
A vendor must give buyers a contract of sale. In that contract are a number of prescribed documents, including such things as a Title Search, Deposited Plan, Sewerage Diagram and a Zoning Certificate. There are other documents that are specific to circumstances, like a Pool Compliance Certificate, for example.
What information is missing? A survey is not a prescribed document and often not present. If the property has been renovated, an Occupation Certificate may not be included. These are just some examples, there are many more things a buyer should be looking for before signing a contract.
How hard it is to get additional information? Most information can be found if you know what to look for. However, getting documents from the local council can be problematic as they often need 21 days and if you wait that long you might miss out on the property.

There is a difference between buying a strata property as opposed to a torrens title - or freehold property. There are additional vendor disclosures and you will need to do a lot more research into how the building is run. Generally this means ordering a strata report and getting expert advice on it.
We explore whether houses always outperform units. Most of the time they do, but in expensive locations like Sydney, buyers will need to look seriously at strata property for their first home.
The biggest risks buyers need to be aware of when they are hunting for strata. Building defects, disharmony, unexpected special levies... 

Local experience
Mistakes people from interstate or overseas make when they try to buy in each state. Learning about a local area is critical for avoiding mistakes when buying in a location you are not familiar with.

In addition to these key considerations, first-time homebuyers should also be aware of the importance of a good credit score, the need for pre-approval for a mortgage, and the value of researching and comparing multiple properties and mortgage options. It's recommended that first home buyers NSW learn the complete buying process and ask the right experts to help guide them to make informed decisions.

How ready are you to buy your first home?

Veronica Morgan & Meighan Wells 

Veronica & Meighan are both licensed real estate agents who exclusively help buyers. Together they have nearly 40 years experience as property professionals.

Veronica is principal of Sydney based Good Deeds Property Buyers and is also co-host of The Elephant in the Room property podcast as well as Location Location Location Australia on Foxtel and author of Auction Ready: how to buy property at auction even though you're scared s#!tless!

Meighan is the multi award winning principal of Brisbane based Property Pursuit, chairperson of the REIQ Buyers Agent Chapter & a regular media commentator.

We are here to guide you through your home buying journey

How ready are you to buy your first home?