Buying a property in NSW: the complete step-by-step guide

Talk to your lender or mortgage broker early and get pre-approval, so you know how much you can borrow. Remember to budget for more than the price: transfer duty, lender’s fees, searches, inspections, insurance and our fees all add up.

If you’re a first home buyer, check whether you qualify for the First Home Buyers Assistance Scheme. Our guide to NSW first home buyer schemes explains your options, and our guide to deposit bonds covers an alternative to a cash deposit.

In NSW, an agent can’t offer residential property for sale until a contract is available, so ask for a copy as soon as you’re interested. Our guides explain how to make an offer, pre-auction offers and buying at auction.

An accepted offer isn’t binding on either side until contracts are signed and exchanged. Until then, the seller can accept a higher offer, which is known as gazumping.

The contract must include prescribed documents, such as a title search, a planning certificate and the sewerage diagram, and for strata property, the strata plan and by-laws. We review these and the special conditions, explain your rights and deadlines, and negotiate changes where needed.

Our advice draws on years of acting for Australia’s major banks and lenders. We’ve seen where transactions go wrong and the things that are often missed, so we know what to look for in your contract before it becomes a problem. You get the benefit of that experience. In other words, the benefit of hindsight.

This is also when to decide how you’ll hold title if you’re buying with someone else. See our guide to joint tenants and tenants in common. If you’re buying a unit, read our guide to buying a strata unit, and if you’re buying off the plan, our off-the-plan guide.

The contract becomes binding when signed copies are exchanged and the deposit is paid, usually 10% of the price, although a lower deposit can sometimes be negotiated. For most private sales of residential property you then have a 5 business day cooling-off period, or 10 business days off the plan. If you cool off, you forfeit 0.25% of the price.

Cooling-off only protects the buyer. The seller has no cooling-off right, so once contracts are exchanged the seller is bound.

There’s no cooling-off if you buy at auction, or if you waive it by giving the seller a section 66W certificate from your lawyer. Some buyers secure a property with a put and call option instead.

Use the cooling-off period, or the time before you sign, to arrange a building and pest inspection, a strata report for units, and formal approval of your loan. We review the searches, check for title defects such as unapproved works or encroachments, and raise requisitions on title.

If the property has a pool, check its compliance status. See our guide to buying a property with a pool.

Transfer duty is calculated on the higher of the price and the market value. It must be paid by the earlier of settlement and 3 months after the contract date. You can estimate it with the Revenue NSW calculator. Our guide to stamp duty in NSW sets out the current rates with worked examples.

First home buyers pay no transfer duty on a home valued up to $800,000, and a concessional rate between $800,000 and $1 million. For vacant land, the thresholds are $350,000 and $450,000. If you’re buying an investment property, our guide to land tax explains what you’ll pay each year.

Before settlement, we check the settlement adjustments for council rates, water and strata levies, prepare your settlement statement and confirm the figures with your lender. Arrange building insurance from exchange or as your lender requires. Our guide to property insurance explains what’s needed.

About 7 days before settlement, we’ll email you a pre-settlement summary. It includes the statement of adjustments, what you need to do before settlement and exactly how much you need to have available to settle.

Book a pre-settlement inspection to check the property is in the condition you agreed to buy it in, and that the fixtures and inclusions are still there. If either side is late, a notice to complete can set a firm deadline.

Settlement takes place electronically, usually through PEXA, Australia’s main digital property settlement platform. The balance of the price is paid by your lender and by you, depending on how much you’re borrowing. At the same time, transfer duty is paid, the transfer and your mortgage are lodged, and the seller’s loan is paid out. Once we confirm settlement, the agent releases the keys.

After settlement, we send you a final letter confirming the purchase. If you plan to rent the property out later, see our guide to converting your home to an investment property.