The Process of Buying a House in Australia: 9 Steps for NSW Buyers

The Process of Buying a House in Australia: 9 Steps for NSW Buyers

The process of buying a house in Australia runs in nine steps. You get pre-approval, work out your deposit and costs, search and research prices, have the contract reviewed, make an offer or bid at auction, exchange contracts, get formal loan approval, then settle. Steps 5 and 6 are alternatives: you either negotiate a private sale or bid at auction. In NSW the sale becomes binding at exchange, a 5 business day cooling-off period follows (none at auction), and settlement usually takes place around six weeks later.

If you’re working out how to buy a house in Australia, the order is the same in every state, but the legal detail is not. Cooling-off periods, deposit customs and settlement periods are set state by state, so this guide follows the NSW rules, checked against NSW Fair Trading and the Conveyancing Act in November 2026. If you’re buying elsewhere, use the steps and check the local rules with your conveyancer.

We’ve been taking buyers through this sequence since 2001. Most of the trouble we see comes from doing two steps in the wrong order: bidding at auction on a pre-approval nobody has fully assessed, or exchanging on a cooling-off period too short for the valuation to come back.

Step 1: Get pre-approval and work out what you can really afford

Start with the finance, not the open homes. A pre-approval (also called conditional approval) is a lender’s assessment of how much it will lend you, subject to finding a suitable property. NSW Fair Trading lists having your finance pre-approved as one of the steps to take before you make an offer.

Two numbers matter here. The first is your borrowing capacity: the most a lender will lend. The second is the repayment you’re comfortable with, which is often lower. Lenders assess your income, expenses and debts against a buffer above the actual interest rate, but they don’t know what else you want your money to do. Set your budget on the repayment, not the maximum.

Four things we tell every buyer at this stage:

• Get the right kind of pre-approval. Some pre-approvals are generated by a lender’s system from the data you enter. Others are fully assessed by a credit assessor who has read your payslips and statements. If you plan to bid at auction, a fully assessed pre-approval is the stronger position.
• Watch the expiry. At most lenders on our panel a pre-approval is valid for around 90 days, and a few lenders aren’t offering pre-approvals at all right now. Ask for one when you are ready to buy, not months before, and avoid stacking applications with several lenders, because each one is a credit enquiry.
• Don’t change anything big. Pre-approval assumes nothing material changes. A new job, a new car loan or a drop in income can trigger a fresh assessment.
• Do the ID check first. Identity verification is now one of the most common reasons files stall, so complete the lender’s digital ID check the day it arrives.

Our home loan pre-approval guide explains conditional and unconditional approval in more detail, and the home loan document checklist lists what a lender will ask for.

Step 2: Work out your deposit and the costs on top

With a 20% deposit you avoid lenders mortgage insurance (LMI), which applies when you borrow more than 80% of the property’s value. Many buyers start with less. You can buy with a smaller deposit and pay LMI, or use the Australian Government 5% Deposit Scheme. It lets eligible first home buyers buy with a 5% deposit, and eligible single parents and legal guardians with 2%, without LMI, under property price caps. Our guide to how much deposit you need runs through each route.

The deposit is not the whole cheque. NSW Fair Trading’s list of upfront costs when buying a home includes:

• transfer duty (stamp duty), based on the property’s value
• LMI if you borrow more than 80% of the price
• building, pest and strata reports
• legal or conveyancing fees
• mortgage and title registration fees
• loan application fees, including valuation fees.

Some of these you may pay more than once, for example building reports on two or three homes before one is yours.

Transfer duty in NSW

Under the First Home Buyers Assistance Scheme, first home buyers pay no transfer duty on a new or existing home valued up to $800,000, and a concessional rate between $800,000 and $1,000,000. These thresholds have applied since 1 July 2023, sourced from Revenue NSW and checked in November 2026. Duty must be paid by the earlier of settlement or three months after you sign the contract, according to Revenue NSW. Our NSW first home buyer stamp duty guide covers eligibility and the land thresholds.

Step 3: Search, inspect and research the price

Once the budget is set, inspect homes inside it. Go back to the ones you like at a different time of day. Check the obvious structural signs yourself (damp, cracks, sagging ceilings, how the doors close), but leave the real assessment to a building and pest inspector before you commit.

Research the price as hard as the house. Look at recent comparable sales in the same pocket, not just the agent’s guide. Be careful with automated online estimates. We’ve seen one platform’s estimate on a Sydney house drop by about a fifth of its value in two months while nothing about the house changed, most likely because the “comparable” sales in that pocket weren’t comparable at all. Comparable sales and a rate per square metre are a sounder base for an offer.

New price guide rules in NSW

From 17 November 2026, agents must include a selling price or price range in new advertisements for residential property. They also can’t advertise below their own estimated selling price, the highest registered bid at an auction where the home was passed in, or a written offer the seller rejected only because it was too low. For homes listed under agency agreements made after 8 February 2027, agents will also need a Statement of Information showing the comparable sales behind their estimate. The NSW Fair Trading summary of the changes sets out the timeline. Underquoting is an offence, and you can report it to NSW Fair Trading.

Step 4: Get the contract of sale reviewed

In NSW a home can’t be put on the market until a contract of sale, prepared by a solicitor or licensed conveyancer, is available. Ask the agent for it as soon as a property makes your shortlist and send it to your conveyancer or solicitor straight away.

The contract has to attach certain documents, including the title search, drainage diagrams, the council planning certificate, any easements or covenants, and the smoke alarm and loose-fill asbestos notice, plus a pool certificate where there’s a pool. If one of the prescribed documents is missing when you sign, you can rescind within 14 days of exchange. Your conveyancer will also check for strata issues, outstanding rates or land tax, and anything a council or authority has registered against the land.

Only your solicitor or conveyancer can make changes to the contract; the agent can’t. Ask them to request what you need, such as a smaller deposit, a different settlement date or a longer cooling-off period.

Choosing a conveyancer

Conveyancers in NSW must be licensed with NSW Fair Trading, and conveyancers and solicitors are equally qualified to do the work. Ask for an itemised estimate before you engage one. As well as the professional fee you’ll pay disbursements such as title searches and certificate fees, which is what most people mean by “search fees”.

Step 5: Make an offer (private treaty)

In a private treaty sale you negotiate a price with the seller’s agent rather than bidding against other buyers in public. Offers can be verbal or written. Written offers, even by email, give you a record of what you offered and why it was declined. The agent has to pass your offer to the seller, unless the seller has said in writing not to pass on offers below a set figure. From 17 November 2026, under new agency agreements, that instruction no longer covers an offer high enough to make the agent revise their price estimate. And remember the agent works for the seller, not for you.

Holding deposits in NSW

Once you make an offer, the agent may ask for a small deposit to show you are serious. In NSW this is an expression of interest deposit, and it is refundable. Before the agent takes it, they must tell you in writing that the seller doesn’t have to sell, you don’t have to buy, and the money comes back if no contract is signed. You then sign a statement confirming you understand. If someone else exchanges on the property, the agent must refund you in full within 14 days.

Gazumping is legal until exchange

Paying an expression of interest deposit does not take the home off the market. The seller can take deposits from other buyers, accept a higher offer and sell to someone else up to the moment contracts are exchanged, and nobody has to repay your legal, inspection or finance costs. The protection is to be ready to exchange quickly: finance in place, contract reviewed, deposit available.

The full rules are on the NSW Fair Trading page on making an offer on a property.

Step 6: Or bid at auction

At auction the order of the steps changes, because everything has to be done before the hammer falls. If you’re the highest bidder above the reserve, you sign the contract and pay the deposit (usually 10%) on the spot, and there is no cooling-off period. The same applies if the property is passed in and you sign with the seller later that day.

Before you bid:

• have a fully assessed pre-approval that covers the price plus duty
• get the building and pest report, and the strata report for a unit
• have your conveyancer review the contract and agree any changes before the day
• set your limit and hold it, or use a buyer’s agent to bid for you.

To bid in NSW you register with the agent, giving your name, address and proof of identity, and you receive a bidder’s number. The auctioneer can make one bid on the seller’s behalf and must announce it as a vendor bid. Dummy bidding is illegal. If the property is passed in, the highest bidder generally gets the first chance to negotiate. The NSW Fair Trading guide to buying property at an auction has the full conditions.

One rule we hold to: if only one lender will fund your purchase, don’t bid at auction. With no cooling-off and 10% down on the day, there is no fallback if that lender’s valuation or final assessment comes back short. Buy by private treaty with a cooling-off period instead, or adjust the price so more lenders are in play.

Step 7: Exchange contracts and use the cooling-off period

In NSW a sale becomes binding when you and the seller exchange signed copies of the contract. At exchange you pay the deposit, usually 10% of the price, though the amount is whatever the contract says. A smaller deposit can be negotiated before exchange, and a deposit bond can stand in for cash where the seller accepts it. With a cooling-off period, many buyers exchange on a 0.25% deposit and pay the balance when cooling-off ends, so the 0.25% is what’s at stake if you pull out.

For a private treaty purchase, the cooling-off period starts at exchange and ends at 5pm on the fifth business day after the day you exchanged. Exchange at 10am on a Tuesday and it ends at 5pm the following Tuesday. Off-the-plan contracts have 10 business days. What it means in practice:

• Pulling out costs 0.25% of the price ($250 for every $100,000), taken from your deposit, and the rest of the deposit is refunded. You must give written notice, signed by you or your solicitor, before the period ends.
• It can be extended by agreement with the seller. Five business days is tight for a valuation, formal approval and inspections, particularly on a tenanted property where access takes time. Ask your conveyancer to request 10 business days. In our experience agents usually agree. If you’re self-employed and still waiting on a tax return, ask early.
• It can be waived with a section 66W certificate, signed by your own solicitor (not one acting for the seller) after they have explained what you’re giving up. Agents sometimes ask for this to secure a sale. Don’t sign one until your finance, inspections and contract review are done, because a waived contract has the same no-exit position as an auction.
• There is none at auction, or for a contract signed on the same day as a passed-in auction.

The Conveyancing Act rules are summarised on NSW Fair Trading’s contracts and deposits page. Duty on a contract rescinded in the cooling-off period is refundable.

Step 8: Formal approval, inspections and your loan documents

Send the signed contract to your broker the day you exchange (or the day you agree a price, if the seller lets you do your checks first). The lender orders a valuation, and if the valuation supports the price and any LMI is approved, the loan moves from pre-approval to formal, unconditional approval. For a clean file this can take a few business days. If yours is likely to take longer than the cooling-off period allows, ask for an extension before you exchange (see Step 7). Our approval and settlement timeline breaks down how long each stage takes and what delays it.

Run the building and pest inspection in the same window, and read the strata report if you’re buying a unit. If the valuation comes in below the price, talk to your broker before the cooling-off period ends, while you still have options.

After approval the lender issues the loan contract and mortgage documents, usually electronically. Check the loan amount, rate, fees, repayments and loan structure before you sign. Return them promptly, because the lender has to certify the loan as ready before your conveyancer can book settlement.

Building insurance

This is the settlement blocker almost everyone leaves too late. Lenders want a certificate of currency for a house, with the lender noted as mortgagee, before they will settle. In our experience they ask for it around two weeks before the settlement date, so arrange it the week you exchange, not the week you settle.

Step 9: Settlement

Settlement usually takes place around six weeks after exchange in NSW, but the contract sets the date, and you can negotiate it. Buying and selling at the same time? We often suggest getting a pre-approval conditional on the sale before you list. Then sell with a longer settlement, around 12 weeks, so you have time to find and settle on the next home.

All NSW settlements are electronic. Your solicitor or conveyancer works in an online workspace with the seller’s representative and both lenders, the funds move by electronic transfer, and the transfer and mortgage are lodged with NSW Land Registry Services. Cheques and paper documents are no longer needed. In the final week your conveyancer will tell you the balance you need to contribute after the loan, including duty and adjustments for council and water rates.

On the morning of settlement, do a final inspection to check the home is in the same condition as when you exchanged. Once settlement is confirmed, the agent releases the keys and the home is yours.

Frequently asked questions

What are the steps to buying a house in NSW?

There are nine, and steps 5 and 6 are alternatives. Get pre-approval, work out your deposit and costs, search and research prices, and have the contract reviewed by a conveyancer or solicitor. Then make an offer or bid at auction, exchange contracts and pay the deposit, and use the cooling-off period to get formal loan approval and inspections done. Finally, sign your loan documents and settle, usually around six weeks after exchange.

How long is the cooling-off period in NSW?

Five business days for a standard residential contract, ending at 5pm on the fifth business day after exchange, and 10 business days for an off-the-plan contract. It can be extended by agreement with the seller or waived with a section 66W certificate. If you pull out during it, you forfeit 0.25% of the purchase price.

Is a holding deposit refundable in NSW?

Yes. A holding deposit paid after an offer is an expression of interest deposit, and it is refundable if no contract is signed. The agent must tell you this in writing before taking it, and if the property sells to someone else, the agent must refund you in full within 14 days. It does not stop the seller accepting a higher offer before exchange.

Is there a cooling-off period at auction in NSW?

No. If you are the successful bidder you sign the contract and pay the deposit on the spot, with no cooling-off period. There is also no cooling-off if you sign with the seller on the same day the property was passed in. Have your finance, inspections and contract review done before you bid.

How much deposit do you pay when you exchange contracts in NSW?

Usually 10% of the purchase price, paid at exchange or on the fall of the hammer at auction. The exact amount is set by the contract, so a smaller deposit can be negotiated before exchange, and a deposit bond can replace cash where the seller agrees. With a cooling-off period, many buyers exchange on a 0.25% deposit and pay the balance when cooling-off ends, so the 0.25% is what’s at stake if you pull out.

How long does it take to buy a house in NSW?

From pre-approval, allow a few weeks to a few months to find the right home. From exchange, settlement usually takes around six weeks, and the contract can set a shorter or longer period. Formal loan approval usually lands within the first one to two weeks of that period when the application is complete.

Talk to us before you start looking

Most of the risk in the property purchase process sits in the order of the steps, and most of it can be managed before you sign anything. If you’re about to start inspecting, get the pre-approval fully assessed first. If you’ve found the home, get the contract to a conveyancer and the valuation booked before the cooling-off clock starts. We compare home loans across a panel of 52+ lenders and work with your conveyancer from pre-approval to settlement. Talk to our mortgage brokers or call (02) 8004 7459 about buying your next home.

This article contains general information only and does not constitute financial advice. Your personal financial situation, objectives and needs have not been considered. Before acting on any information, you should consider its appropriateness to your circumstances. Speak to a qualified mortgage broker for advice tailored to your situation. Mortgage World Australia Pty Ltd is a credit representative (CR No. 396946) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).

Patrick O'Brien

Patrick is a Director and a Home Loan Specialist. He has been helping Australians with home loans since 2001. Prior to working as a mortgage broker Patrick was employed by Macquarie Bank for 3 years and also worked as an accountant for a publicly listed company. Patrick’s qualifications include:

Bachelor of Business, UTS Sydney. Majored in accounting and sub-majored in Finance and Marketing.
Diploma of Finance and Mortgage Broking Management FNS50310
Certificate IV in Financial Services (Finance/Mortgage Broking) FNS40804