Getting pre-approved before you search
Pre-approval is a conditional assessment by a lender confirming they are willing to lend you up to a specified amount, subject to a satisfactory property valuation. It is not a guarantee of final approval but it gives you a clear budget and makes you a more credible buyer in a competitive market.
To obtain pre-approval in NSW you will typically need to provide recent payslips or tax returns, bank statements for the past three to six months, identification, and details of existing debts and liabilities. The lender assesses your income, expenses, and credit history before issuing a pre-approval letter, which is usually valid for three to six months.
Why pre-approval matters
In Sydney's competitive auction market, vendors and their agents take pre-approved buyers more seriously. Some properties will not accept offers from buyers without documented finance. Having pre-approval in place also means you can move quickly when you find the right property.
Property search and making an offer
In NSW, properties are sold through three main methods: private treaty, auction, and expressions of interest. Each has different rules around how and when you can make an offer and what protections apply.
Private treaty is the most common method for residential property. The vendor sets an asking price and buyers negotiate directly. Once a price is agreed, a contract is exchanged. The buyer typically pays a holding deposit of 0.25% to secure the contract before exchange, followed by the full 10% deposit at exchange.
Auction sales are common in Sydney and inner metropolitan areas. There is no cooling off period for properties purchased at auction. If you are the successful bidder, you are bound to the contract immediately and must pay the 10% deposit on the day. Thorough due diligence must be completed before bidding.
Contracts and the cooling off period
In NSW, when you purchase by private treaty, you have a five business day cooling off period after exchange during which you can withdraw from the contract. To exercise the cooling off right you forfeit 0.25% of the purchase price. The cooling off period does not apply to auction purchases or where both parties have waived it in writing (section 66W certificate).
Before signing a contract in NSW, it is strongly recommended to have your solicitor or conveyancer review the contract, conduct a building and pest inspection, and review any strata records if the property is in a strata scheme.
Due diligence: what to check before you commit
Due diligence is the process of verifying everything material about the property before you are locked in. For most buyers this includes a building and pest inspection, strata report for units, title search, flood and bushfire zoning checks, and a review of the contract by a legal professional.
The NSW Land Registry provides online access to title searches. Council planning portals allow you to check zoning, development applications on the property, and any heritage overlays. For older properties in particular, checking for unapproved structures or outstanding council orders is essential.
Settlement
Settlement is when legal ownership of the property transfers to you. In NSW, settlement typically occurs 42 days after exchange of contracts, though this can be negotiated. On settlement day, your lender pays the vendor the agreed purchase price (less your deposit), and your solicitor or conveyancer registers the transfer of title and mortgage with the NSW Land Registry.
Your lender will arrange the payment of the purchase price directly. You will need to have your deposit, stamp duty, and any other costs available before settlement.
Total costs to budget when buying in NSW
Beyond the purchase price, NSW buyers need to budget for stamp duty (also known as transfer duty), conveyancing fees, building and pest inspection, lender fees, and potentially Lenders Mortgage Insurance if the deposit is below 20%. For a property purchased at $800,000 in NSW, stamp duty alone is approximately $31,490. First home buyers purchasing under the applicable threshold may be eligible for a stamp duty exemption or concession. See our stamp duty guide for current NSW thresholds and calculations.