Buying property in Australia is one of the biggest financial decisions most people will ever make. The process is more involved than it looks from the outside — and how you buy (at auction versus private treaty), who you have supporting you, and what questions you ask along the way can make a material difference to both the price you pay and your level of risk. This guide walks through the entire process from first steps to settlement, so you know exactly what to expect and what to do at each stage.
Property law is state-based in Australia.
While the broad process is similar across the country, important details vary by state and territory — including stamp duty rates and concessions, cooling-off periods, contract conditions, and settlement timeframes. Always engage a conveyancer or solicitor who practises in the state where you're buying. This guide focuses on the general principles that apply nationally.
The buying process — step by step
Before you start attending open homes, it pays to understand the full arc of the purchase process. Each step builds on the last, and skipping ahead — especially without finance pre-approval or legal advice in place — creates unnecessary risk.
Get your finances in order
Before you look at a single property, speak to a mortgage broker or lender to understand your borrowing capacity and obtain a pre-approval. A pre-approval confirms how much a lender will lend you subject to final assessment, and gives you a firm budget. It also signals to vendors and agents that you're a serious buyer — particularly important at auction. Make sure you account for all purchase costs, not just the property price.
Research the market and your target area
Understand recent comparable sales (not asking prices — sold prices), median values, and what drives value in your target suburb. Look at days on market, vacancy rates if buying an investment, school zones, infrastructure plans, and flood or bushfire risk overlays. Websites like Domain, realestate.com.au, and your state's valuer-general provide sold data. A buyer's agent can provide deeper market intelligence if you need it.
Engage a conveyancer or solicitor early
Have your legal professional lined up before you make an offer or register for an auction. They'll review the contract of sale, Section 32 (Vendor's Statement) or vendor disclosure, title searches, and any special conditions — and flag anything that requires negotiation before you sign. Don't sign a contract without legal review unless you understand every clause and condition fully. In most states, contracts are legally binding once signed.
Organise building and pest inspections
For private treaty purchases, always obtain a building and pest inspection before making an unconditional offer or waiving conditions. For auctions, inspections must be done before auction day, as contracts are unconditional from the fall of the hammer. A combined building and pest report typically costs $400–$800 and can reveal defects that significantly affect value or require remediation. Never skip this step for an older property.
Make your offer or bid at auction
Once you've done your due diligence, you're ready to make your move. The method — private treaty or auction — largely dictates how this unfolds. Understand the process for each (covered in detail below) and know your absolute limit before you walk in. Emotional decisions made under time pressure account for a significant share of buyer's regret in Australian property.
Exchange, deposit, and settlement
Once an offer is accepted (private treaty) or the hammer falls (auction), contracts are exchanged and you pay your deposit — typically 10% of the purchase price, though 5% is sometimes negotiated. Settlement (the transfer of ownership and balance payment) usually occurs 30–90 days later depending on the state and what's agreed in the contract. Your broker coordinates the final loan drawdown and your conveyancer coordinates with the vendor's side for settlement day.
Auction vs. private treaty — understanding the key differences
The method of sale shapes everything: your timeline, your due diligence requirements, your negotiating leverage, and your risk profile as a buyer. Both methods are common in Australia and suit different property types, market conditions, and buyer profiles.
Auction
A public bidding process where the property sells to the highest bidder above the vendor's reserve price on the day.
- Purchase is unconditional — no finance or building inspection clauses after the hammer falls
- Contract is binding immediately on the fall of the hammer
- 10% deposit required on the day — have funds accessible in advance
- All due diligence must be completed before auction day
- Transparent bidding — you know exactly where the price is at all times
- If passed in, you may negotiate with the highest bidder having first right
- Pre-auction offers are possible and can be effective in a slow market
- Common in Melbourne and Sydney, particularly for family homes
Private treaty
The vendor lists a price (or price range) and buyers negotiate directly with the selling agent to agree on terms.
- Offer can be made subject to conditions — finance, building and pest, strata report
- Cooling-off period usually applies (varies by state — typically 2–5 business days)
- Negotiation happens in private — you can't see what other buyers are offering
- More time to arrange due diligence after offer acceptance
- Allows more complex negotiation on price, conditions, and settlement date
- Multi-offer situations (best and final offers) can create auction-like pressure
- You may be gazumped — a vendor can accept a higher offer before exchange
- Common across all markets, dominant in regional areas
✓ Reasons to prefer auction
- You know the true market value on the day — no guessing what others are paying
- Once you win, the deal is done — no risk of being gazumped or subject to another buyer's conditions
- If passed in, you're often in the strongest negotiating position immediately after
- Can be faster to settlement once the hammer falls
- Pre-auction offers give you a chance to secure the property before competitive bidding begins
✗ Risks to manage at auction
- No conditions — you must be certain of your finance and comfortable with the property before bidding
- Competitive bidding can push you beyond your limit if you're not disciplined
- Costs of due diligence (inspections, legal review, strata report) are spent even if you don't win
- Deposit must be available immediately — no time to arrange a bank cheque on the day
- Vendor can set a reserve higher than expected and pass the property in
Finance must be pre approved before you bid at auction. If you win at auction without confirmed finance and can't settle, you can lose your deposit and face legal action for the shortfall. Ensure your broker has confirmed the property and your financial situation satisfies the lender's full requirements before auction day. In a tight timeline, talk to your broker and conveyancer several days in advance.
Tips for buying at auction
Auctions are a distinct skill. The dynamics are different from private treaty negotiation, and buyers who understand the psychology and tactics involved consistently perform better than those going in cold.
Set a hard limit — and stick to it
Before you attend, write down the maximum you will pay. Give that number to a friend or partner attending with you, and agree in advance that if bidding exceeds it, you stop. Auctions are designed to create competitive pressure. Excitement, adrenaline, and sunk-cost thinking (I've already done all the inspections) are the enemies of good financial decisions on the day.
Attend several auctions before yours
If you've never bid at auction, attend three or four in your target suburb in the weeks before your own. Watch how the auctioneer works, how other bidders behave, how the pace of bidding changes, and what a passed-in negotiation looks like. You'll be far more composed when it's your money on the line.
Bid with confidence — not hesitancy
Confident, prompt bidding signals strength to other buyers. Hesitant bidding in small increments signals you're near your limit and can encourage others to push harder. When you're well within your limit, bid in firm increments and respond quickly. You don't have to match the auctioneer's suggested increment — you can bid any amount above the current bid.
Consider a pre-auction offer
In softer markets — or when a vendor has a specific settlement date in mind — a well-structured pre-auction offer can get the deal done before competition begins. The offer must generally be at or above what the vendor expects to achieve at auction for them to accept it. Your agent or a buyer's agent can advise on whether this is a viable strategy for a specific property.
Know what to do if it's passed in
If the property doesn't meet the reserve, it's "passed in" — usually to the highest bidder, who then has first right to negotiate with the vendor. This is a strong position to be in. Don't make the mistake of immediately matching the vendor's asking price. Acknowledge the gap, stay calm, and negotiate from your own assessment of value. Agents will often ask for your best offer — you're not obligated to give it on the spot.
Tips for buying by private treaty
Private treaty gives you more time and the ability to include conditions — but it requires different tactics and an understanding of how the negotiation dynamic works.
Research comparable sales, not the asking price
The advertised price is the starting point for a negotiation, not a reflection of true market value. Look at recently sold properties within 500 metres and the last 90 days — same dwelling type, similar land size, similar condition. That data tells you what the market will bear, not what the vendor hopes to get. Your conveyancer can pull a title report and valuer-general sales data if you need it.
Use conditions strategically
Finance and building inspection conditions protect you — but they can also make your offer less attractive to a vendor who wants certainty. In a competitive market, consider whether you can shorten the condition period (e.g. 5 business days for finance rather than 14) to make your offer more compelling, while still giving your broker and inspector enough time to complete their work.
Understand what the vendor really wants
Price matters, but it isn't always everything. Ask the agent what settlement date the vendor prefers, whether they need time to vacate, whether they want a leaseback arrangement, or whether there are inclusions (furniture, fixtures, equipment on a rural property) that matter to them. A well-structured offer that matches the vendor's actual needs — even at a slightly lower price — can win over a higher-priced offer that doesn't fit their situation.
Act quickly when you find the right property
Good properties in strong markets often attract multiple offers within days of listing. If you've done your research, have pre-approval in place, and are confident in the property, don't delay. The days spent deliberating are often enough for another buyer to move in ahead of you. You don't need to rush due diligence — but you shouldn't take a week to decide if you're ready.
Questions to ask the real estate agent
The selling agent works for the vendor — their job is to achieve the best price and terms for the seller. That doesn't mean you can't have a useful conversation with them, but you need to ask the right questions and understand that their answers will be framed in the vendor's interest. Here are the questions worth asking at every property you seriously consider.
About the property
- How long has the property been on the market, and have there been any price reductions?
- Has the property been tenanted, and if so, when did tenants vacate?
- Are there any known structural issues, past flooding, or insurance claims on the property?
- What is included in the sale — fixed floor coverings, window furnishings, appliances?
- Has the property had any renovations or additions, and were council approvals obtained?
- What is the current council rates and water rates per quarter?
- For units or townhouses: what is the strata levy and what is in the sinking fund?
About the vendor's situation
- Why is the vendor selling, and are there any time constraints on settlement?
- Does the vendor have a preferred settlement date?
- Has the vendor already purchased elsewhere (creates urgency to sell)?
- Have there been previous offers that fell through, and if so, why?
- Is the vendor open to a leaseback arrangement post-settlement?
- Is the vendor's property in a deceased estate (often creates motivation to transact)?
About the auction or price
- What is the vendor's price expectation (private treaty) or indicative reserve range (auction)?
- How many registered bidders are there for the auction?
- Are there other offers currently on the table?
- What are the recent comparable sales the vendor's price expectation is based on?
- If passed in at auction, will the vendor negotiate with the highest bidder on the day?
- Is the vendor open to a pre-auction offer, and if so, what would they need to accept one?
About the area and contract
- Are there any known development applications or rezoning proposals for adjacent properties?
- What infrastructure or council projects are planned in the area?
- Are there any easements, covenants, or encumbrances on the title?
- Is the property in a flood, bushfire, or heritage overlay?
- Are there any special conditions in the contract I should be aware of?
- What is the standard deposit amount, and is the vendor open to a smaller deposit?
Agents are obligated not to lie — but they're not obligated to volunteer unflattering information. If you want to know something specific, ask the question directly. In most states, agents have a duty not to mislead but asking the right questions is still your responsibility. Any material fact they disclose — or refuse to disclose — can inform your due diligence and your price assessment.
Who you need in your corner
Buying property in Australia is a team sport. Trying to navigate the process alone — particularly the legal and financial components — creates unnecessary risk. Here's who you need and what each professional brings to the process.
Mortgage broker
Arranges your finance, accesses multiple lenders, and coordinates the loan approval and drawdown process.
- Assesses your borrowing capacity across multiple lenders
- Obtains pre-approval before you start looking
- Matches your situation to the right loan structure and lender
- Manages the formal approval and valuation process
- Coordinates loan drawdown with your conveyancer at settlement
- Paid by commission from the lender — no direct cost to you in most cases
Conveyancer or solicitor
Handles the legal transfer of property, reviews contracts, and manages settlement.
- Reviews the contract of sale and vendor disclosure documents before you sign
- Conducts title searches and flags encumbrances, easements, or caveats
- Negotiates contract conditions and special clauses on your behalf
- Manages communication with the vendor's legal team through to settlement
- Coordinates with your lender on settlement day
- Handles stamp duty payment and title registration after settlement
Building and pest inspector
Provides an independent assessment of the physical condition of the property before you commit.
- Identifies structural defects, movement, rising damp, or water damage
- Tests for active termite activity and past termite damage
- Checks roofing, subfloor, electrical switchboard visible condition, and drainage
- Provides a written report grading defects by severity
- Can inform negotiation (defects may justify a price reduction)
- Must be licensed — use a member of a professional association
Buyer's agent (optional)
A licensed agent who works exclusively for the buyer — not the vendor — to find, assess, and negotiate property on your behalf.
- Provides independent market intelligence and access to off-market properties
- Attends inspections and assesses properties on your behalf
- Bids at auction or negotiates private treaty in your interests
- Particularly valuable for interstate buyers, time-poor professionals, or competitive markets
- Typically charges 1–3% of the purchase price or a flat fee
- Must hold a real estate licence in the state of purchase
Accountant or financial adviser
Advises on the financial and tax implications of the purchase — particularly important for investment properties.
- Advises on ownership structure (individual, joint, trust, SMSF)
- Explains capital gains tax implications and the 12-month discount rule
- Covers negative gearing, depreciation schedules, and deductible expenses
- Helps model the financial returns of an investment property
- Advises on stamp duty and land tax for multiple property owners
- Essential before purchasing in a trust, company, or SMSF structure
Quantity surveyor (investment properties)
Prepares a depreciation schedule for investment properties to maximise legitimate tax deductions.
- Identifies depreciable assets in the property (plant and equipment)
- Calculates Division 43 construction cost allowances for the building itself
- Produces an ATO-compliant depreciation schedule used in your tax return
- Typically costs $500–$800 and saves multiples of that in tax deductions annually
- Must inspect the property — reports can't be prepared from photos or plans alone
- Only worthwhile for properties built or significantly renovated after certain dates
The full cost of buying — beyond the purchase price
One of the most common mistakes first-time buyers make is budgeting only for the deposit and mortgage repayments. The upfront costs of purchasing can add 3–6% to the total cost depending on the state, property value, and whether you qualify for any concessions. Understanding these costs before you set your budget is essential.
| Cost | Typical amount | Notes |
|---|---|---|
| Stamp duty (transfer duty) | Varies significantly by state and price | The largest upfront cost. First home buyer concessions apply in all states — check your state revenue office. On a $700,000 property in NSW, stamp duty is approximately $27,000. |
| Conveyancer / solicitor fees | $1,500–$3,000 | Includes legal review, title searches, settlement coordination, and land title registration. |
| Building and pest inspection | $400–$800 | Combined building and pest. Strata reports for units cost an additional $200–$400. Budget for two or three inspections if you're actively bidding on multiple properties. |
| Lender's mortgage insurance (LMI) | $5,000–$30,000+ | Only applies if borrowing more than 80% of the property value. LMI protects the lender, not you. It's a significant cost — saving a 20% deposit avoids it entirely. |
| Loan establishment fees | $0–$1,000 | Many lenders charge application or settlement fees. These vary and are often negotiable or waivable — your broker can compare lenders on this basis. |
| Bank valuation fee | $300–$600 | Most lenders order a valuation before approving your loan. Sometimes absorbed into establishment fees. |
| Building insurance | $1,000–$3,000 per year | Must be in place from the date of exchange (not settlement). Your lender will require evidence of insurance before releasing funds. |
| Moving costs | $500–$5,000+ | Often forgotten. Interstate moves and large homes can push this significantly higher. |
| Immediate repair or renovation budget | Varies | If the building inspection identified defects, budget for those works before or shortly after settlement. Don't be left without cash reserves post-purchase. |
A practical rule of thumb: Budget 4–5% of the purchase price on top of your deposit to cover all upfront purchase costs in most states. If you're a first home buyer eligible for stamp duty concessions or exemptions, this can be reduced significantly — check your state government's first home buyer scheme details carefully before finalising your budget.
Red flags to watch for
Most property transactions go smoothly — but knowing what to look for can save you from a costly mistake or a protracted legal dispute. These are the signs worth pausing on.
Pressure to sign without time to review
Any agent who presses you to sign a contract on the spot without having your conveyancer review it is creating urgency for a reason. A good property will still be there after your solicitor reads the contract. If the agent says someone else is ready to sign today — that may be true, or it may be a tactic. Either way, don't sign anything you or your legal adviser haven't read fully.
Unapproved additions or structures
A pergola, carport, granny flat, or extension built without council approval can become your problem on settlement. The new owner inherits all unapproved structures and any council enforcement action. Your conveyancer will check council records, but ask the agent directly about any additions and whether they were approved. An unapproved dwelling can affect your ability to insure, finance, or resell the property.
Abnormally low strata levies
For units, townhouses, and apartments, strata levies that seem surprisingly low can indicate deferred maintenance — a body corporate that has been avoiding necessary expenditure. Check the minutes from the last three body corporate or owners corporation meetings and the balance of the sinking fund. A healthy sinking fund and well-maintained common areas are signs of a well-run scheme.
Price reductions and extended days on market
A property that has been listed for 60+ days with one or more price reductions tells a story. It may simply be overpriced — which can be an opportunity. Or it may indicate structural or legal issues that previous buyers discovered and walked away from. Ask the agent directly why previous contracts fell through. The answer is often illuminating.
The bottom line
Buying property in Australia is a structured, well-trodden process — but it rewards preparation and penalises haste. The buyers who consistently get good outcomes are those who do their financial groundwork first, engage the right professionals before they need them, understand the method of sale they're participating in, and make decisions based on data rather than emotion. Whether you're bidding at a Saturday morning auction or negotiating privately over a week, the fundamentals are the same: know your number, understand your risks, and never sign anything you haven't read.
Your pre-purchase checklist — in order:
1. Finance first. Speak to a mortgage broker, understand your borrowing capacity, and obtain pre-approval before you start looking seriously. Know your total budget including all costs, not just the deposit.
2. Engage a conveyancer. Have one lined up before you make an offer or register for an auction. Send them every contract you're serious about — reviewing contracts is what they're there for.
3. Research the market properly. Understand what properties have actually sold for — not asking prices. Use sold data from the last 90 days within a tight radius of comparable properties.
4. Inspect before you commit. For private treaty, make your offer subject to a building and pest inspection. For auction, get the inspection done before auction day. Don't skip it for an older property.
5. Ask the right questions. Use the question list above at every property you seriously consider. The agent's answers — and silences — will tell you a lot about the property and the vendor's motivation.
6. Know your limit at auction. Set it before the day, give it to someone with you, and don't move it in the moment. The property you don't win was never your last chance.
