There’s no shortage of tips for first home buyers floating around online. Some of these are solid, practical advice offered by experts with plenty of experience helping first-time buyers enter the market. Others are less helpful, too broad, or don’t reflect the realities of the first home buying experience.
At Local Agency Co., we understand how difficult the buying process can be, particularly if it’s your first time. That’s why we’ve distilled down all the advice available to create our top tips for first home buyers.
Practical tips for first home buyers
Here we will focus on tips for first home buyers that will actually help streamline the purchasing process.
1. Confirm your borrowing power
We understand that “get your finances in order first” is one of the most common tips for first home buyers. There’s good reason for this – it allows you to target your search and reduces the risk of future heartbreak. In particular, knowing what your budget is upfront will mean you can focus on the properties you can actually afford.
For the vast majority of first time buyers, this will mean working out how much you can borrow. While there are a few different ways to do this, calculating your borrowing power is often the easiest. In fact, most mortgage providers have a simple tool on their website that you can use.
Your borrowing power is based on your regular income, current expenses, and the current interest rates. It reflects the maximum amount that a lender would provide, subject to you meeting their other terms and conditions. As such, calculating this first allows you to not only set your budget, but also determine the deposit you require.
2. Look into the additional support on offer
Improving access to the property market has been a focus for most recent state and federal governments. This has resulted in the implementation of a range of initiatives designed to assist first home buyers.
This includes the First Home Guarantee, which sees the Federal Government act as guarantor on mortgages for eligible buyers. This removes the need for Lender Mortgage Insurance (LMI), a standard requirement when the deposit is less than 20%. This means that, under this program, eligible buyers can purchase a property with as little as a 5% deposit.
In great news for first home buyers, the Federal Government has just announced an expansion of this program. As part of planned changes, income limits will be removed from the eligibility criteria, and price caps will be increased. Originally planned for 1 January 2026, this expansion will now begin in October, allowing more buyers to access it sooner.
In addition to this, first home buyers in Sydney may be able to access the First Home Buyers Assistance Scheme. This NSW Government initiative provides eligible buyers a complete exemption from transfer duty when purchasing a property for under $800k. Under this scheme, there is also a significant reduction in transfer duty when purchasing properties valued between $800k and $1m.
As eligibility for these schemes can have a major impact, it’s worth confirming this as part of your budget planning.
3. Build your team
When you’re searching for your first home, it can feel a little like it’s you against the world. However, you don’t have to do it alone – even the most experienced investors have a team of experts supporting them.
At the very least, your team should include a mortgage broker and a conveyancer. A good mortgage broker will help you sort out your finances, understand your options, and choose the most suitable one. Whereas a good conveyancer will ensure your purchase is correctly administered and that you understand exactly what you are buying.
Depending on your situation, you may also want to add a property market expert to your team. This could be a buyer’s agent or local real estate professional who can guide you through the purchasing process.
When building your team, you may want to start by seeking referrals from trusted friends and family members. However, it’s important that, before you formally engage anyone, you do your own checks to confirm their qualifications and experience. It’s also worth doing a quick Google search and checking their reviews, as these will also highlight any potential issues.
4. Stress-test your financials
Just because you can borrow up to a certain amount doesn’t necessarily mean you should. The criteria mortgage providers use to determine your borrowing power may not reflect the realities of your financial situation. As such, it’s worth considering what you can practically afford to spend on mortgage repayments.
To do this, you need to calculate what your ongoing expenses will most likely be. This should include both your ownership costs (insurances, council rates, water rates, strata fees) and your living costs (groceries, transport, utilities). Once you have added these up, subtract the total from your regular after-tax income and compare to your projected repayments.
If there is little difference between these numbers – or the repayments number is larger – consider lowering your budget. Having too little discretionary income creates a real risk that any unexpected expense could result in significant financial stress. It also means that, if interest rates increase, you may not be able to cover the additional cost.
5. Be realistic about your wish list
It’s understandable that you would want your new home to tick all your boxes. But, unfortunately, in Sydney’s highly competitive property market, success often requires some compromises.
As such, you should spend some time thinking about what your requirements actually are and what you are flexible on. Understanding what your non-negotiables are will allow you to target your search efforts and focus on truly suitable properties. It could also open you up to other options you may not have considered when hunting for the “perfect” place.
When working out what you really need in your new home, it’s important to be honest with yourself. And this works both ways.
You need to be honest about what’s really a requirement, not just a nice-to-have. Do you really need that extra bedroom, dedicated home office space, or off-street parking spot? Can you live with less space for now, with view to upgrading in the future?
You also need to be honest about what your dealbreakers are, no matter how trivial they may seem. If you simply cannot share a bathroom with the kids or cook in an older style kitchen, own it. And think seriously about whether you just like the idea of renovating or are actually willing to do the work.
6. Do your own research
Another common tip for first home buyers is to look at current listings to see what your budget gets you. While this is good advice, it misses an important point – the advertised price is often different to the sale price.
To minimise the risk of this, you should base your expectations on recent sales results in your target areas. Both Domain and realestate.com.au have “Sold” search functions that allow you to look for recent sales that fit your brief.
7. Take a long-term view of your purchase
When looking at properties, it’s important to remember that you’re searching for your first home, not your forever home. As such, it should meet your current needs, not what you are likely to need well into the future.
Unless you are planning to stay there long term, you should also consider a property’s growth potential. Getting into the market can be difficult, but future property purchases will be much easier if you plan ahead. Depending on your situation, this could mean focusing on properties in growth areas or with the potential for improvement.
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8. Get familiar with the sales process
The buying process can be confusing and stressful, particularly when you don’t know what to expect. As a first home buyer, the whole thing is a learning experience, with new challenges to overcome at every stage. There’s also a myriad of decisions that need to be made, often at short notice and with no guidance.
To minimise uncertainty, before you start searching, spend some time learning about the key steps you will need to take. There are many free first home buying guides online, including this great one by Domain, which will walk you through the process. Your team (see Tip #3) can also be an invaluable resource, providing practical advice based on current market conditions.
Private treaty and auction sales also work quite differently, presenting different challenges and requiring notably different strategies to succeed. As such, you need to understand the different sales approaches and get comfortable with the one you’ll most likely use.
For example, auctions are very high pressure, so you should plan to attend a few before making your first bid. This will allow you to see how they normally run and get used to the energy and excitement. It will also give you an opportunity to study different bidding strategies and which approaches seem to work best.
9. Pace yourself
The process of buying your first home is often a marathon, not a sprint, and buyer fatigue is real. When it sets in, it not only destroys your motivation, it can increase your desperation, leading to poor decision making.
The best way to avoid fatigue is to take things slowly and be targeted in your search efforts. Here are a few simple rules we recommend sticking to:
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- Don’t check new listings more than once a day – this is often enough to ensure you won’t miss anything, but not so often that it consumes your days.
- Only pursue properties you’re actually interested in – inspecting properties that you know are unsuitable only wastes your time and leads to further disappointment.
- Don’t bank on a bargain – when you pursue a property that’s way out of your budget, you’re setting yourself up for failure. The likelihood of negotiating the price down significantly is very low, and the risk of overcommitting is very high.
10. If your approach isn’t working, adjust it
News outlets love to run stories about first home buyers who have been looking for years with no luck. They have seen every property in their area, been to dozens of auctions, and have made multiple unsuccessful offers. They have also “tried everything”, but the market has just been impossible to crack.
There’s no denying that getting into the property market is hard, particularly with the current supply issues and rising prices. However, if you’re serious about buying your first home, you should be able to find a way. You just need to be flexible and willing to adapt if things aren’t working the way you hoped.
For example, let’s say you’ve spent months searching in one area but haven’t found anything suitable in your budget. This would suggest your requirements and budget probably aren’t aligned, and you need to make some adjustments. Depending on your situation, this could be looking in more affordable areas or scaling down your requirements – or both.
If you’re not willing to compromise on your requirements, you may need to consider other options. Rentvesting could allow you to get into the market while maintaining your lifestyle and staying in the location you prefer. You could also put your house hunt on pause while you focus on increasing your budget (e.g. growing your deposit).
Need help finding your first home?
If you’re looking for more tips for first home buyers, give Local Agency Co. a call. Whether you’re just starting your buying journey, or are struggling to secure a place, our team can help. We are committed to making the market more accessible and can work with you to maximise your chances of success.
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