First Home Buyers Guide in the Northern Territory

A complete guide to buying a first home in the Northern Territory (NT)

Purchasing your very first property in the Northern Territory is not as daunting as some might have you believe. Even though real estate can seem a tangled web of jargon, incomprehensible numbers and mountains of paperwork, LJ Hooker can help keep things simple. Let's take a look at how you can go about setting your foot firmly on the Northern Territory property ladder in a few short steps.

Which ways can you buy a house in the Northern Territory?

Tender 

Buying a property in the Northern Territory via tender refers to when a single offer is submitted, typically alongside a 5 or 10 per cent deposit. This is either then accepted or rejected by the vendor.

Auction

A property auction is managed by a licensed auctioneer and follows strict laws. The house will have a reserve price, which is the minimum that it will sell for. When bids surpass the reserve and keep on rising, the winning bidder has to sign the paperwork the same day.

Private treaty 

A private treaty refers to a standard residential property transaction. This involves a vendor setting a price that they'd prefer their property to go for, and their real estate agent negotiating with prospective buyers in an attempt to get the best price possible.  

Be sure to take a look at the Northern Territory government website for more information.

Money matters

Of course, before you make any sort of purchase, it's imperative that you first take a look at your financial situation. In this day and age, you'll need to scrabble together around 20 per cent of your preferred new home's price, which is easier said than done for many of us. Research firms such as CoreLogic RP Data and Residex will enable you to estimate what you'll need, so be sure to check them when figuring your finances out.

Reaching that magical 20 per cent barrier will typically require a fair bit of saving on your part, but there are plenty of extra resources out there to help you. One of these is the Australian Securities and Investments Commission's MoneySmart website, which features a raft of tips on saving for a deposit. These include the simple things such as working out your weekly budget, to deciding which home loan best suits your needs, each of which can help keep your bank balance that little bit healthier. 

LJ Hooker Home Loans are a great source of several home loan products, with a broad raft of mortgages designed solely for the first time buyer.

Taking out a home loan 

If you cannot pull together the full 20 per cent needed for a deposit, it's possible that you'll incur lenders mortgage insurance on your home loan, which is often very expensive. If it gets to this point, be sure to speak to the helpful team at LJ Hooker Home Loans, who'll work with you to come up with a plan, and talk you through a range of apt mortgage products.

The Northern Territory first home owner grant 

Just as with every other state and territory in the country, so too does the Northern Territory offer a first home buyer grant. Take a look at what you may be eligible for if you're looking to buy in the NT. 

A total of AU$26,000 can be granted to eligible first home buyers in the state, whether that's for a new house, or one that has yet to be built. The state determines a new home to be one that hasn't yet been lived, or sold as a residential abode, so it's important to meet this criteria.

Hidden costs when buying your first home in the Northern Territory

As with any kind of property purchase, you're always going to have certain fees to contend with as a first-time buyer. Let's take a look at a few of these.

• Stamp duty is perhaps the single-most biggest fee you'll come across. It's a tax levied by the NT government and is based on the value of your home. This tax can vary wildly, so be sure to use the NT stamp duty calculator to figure out how much you'll owe on your first home purchase. A 50 per cent discount exists for first-time buyers on homes valued up to $450,000, and stamp duty is capped at $10,000 for more expensive homes.          
• Legal fees can fall anywhere between $1,000 and $3,000, depending on how complex your contracts are.
• When you apply for a loan, you may have to pay a fee which can be as much as $1,000, but can also be nothing at all. It's also possible for these fees to be waived by the lender.
• If you bring in the help of an individual valuer to give an estimate on the property of the house that you're looking to buy, expect to pay around $300 to $500.
• Should you borrow more than 80 per cent of the property's purchase price, you'll need lenders mortgage insurance. This is a one-off payment to protect the lender should you default on your loan repayments. This fee can too vary, but you should be prepared to fork out around $10,000.
• If you want to have your house inspected for structural integrity or pests, you'll be looking at handing over $300 to $400. For a strata report, you'll be parting with around $200.

If you need help to understand these fees, enlist the help of a solicitor, conveyancer or the friendly team at LJ Hooker.

Finding your first home in the Northern Territory

Property reports and research

Doing a little research on the property market will give you a better understanding of precisely what is available, its price, and your options as a first-time buyer. 

• Check the LJ Hooker nearest to you for a localised market report.
• Take a look at Australian Property Monitors and CoreLogic RP Data to uncover further property data, as well as wider trends and price shifts.
• Head to websites such as domain.com.au and realestate.com.au, as well as our very own ljhooker.com.au to look at what is on the market, as well as prices and sales volumes.

This is where you'll gain an idea of where you'd like to be, whether a studio flat in the city centre, or bigger dwelling on the outskirts.   

Where to look for a first home in the Northern Territory

The team at LJ Hooker have a wealth of experience and market knowledge, which enables them to come up with a list of suitable first homes that match the brief you'll have come up with. Enlisting our help will enable you to save time and eradicate stress that can come with house hunting.

You should also take in look in the property sections state's various newspapers, such as NT News, for up-to-date listings, as well as various online portals.

Are inspections important?

Why yes, of course they are. This is because an inspection will get you informed with regards to negotiating for the property, including what you'll pay. If you don't carry out an inspection, it may be the case that you're buying a home that's on the verge of collapse from termite infestation, and needs a complete renovation to bring it up to code. Be sure to use an inspector certified with the Building Practitioners Board when carrying out the work.   

Contracts of sale

When purchasing your first home in the Northern Territory, the contract of sale is one of the most important documents you'll have to deal with. Such details it includes are:

• Names and addresses of the seller, buyer, and any solicitors or conveyancers that have been used,
• Particulars of the sales information,
• The time and date of the final settlement, which is when the title is transferred,
• The cooling-off period (in the Northern Territory, this is four business days)
• Other conditions of the sale.

Two copies of the contract of sale will need to be prepared, signed and exchanged, with both you and the seller receiving a copy. Until the copies are exchanged, the contracts are not binding, so take the cooling-off period (four days in the Northern Territory) to work through it. In fact, it makes good sense to use a conveyancer to help you go over this documentation, to save on any hold-ups later down the line.

Finalising the sale

Private treaty

Should you have your heart set on a home and are ready to make an offer, it's time to contact the seller's agent. The price of the home will be negotiated, as well as any other conditions (like an inspection, or disputing the moving in dates) until everyone is satisfied with proceedings.  

Both parties then sign and exchange the contracts of sale, the deposit is paid, and the settlement process begins in earnest. Once you've received the contract, a cooling-off period of five business days begins, which is a time to ensure that everything is as it should be.

Auction

When you look to buy a first home at auction, you should first visit the home with an agent beforehand, so that you know what you are bidding for. A reserve price will be set by the seller, and should the bidding go above it, and you place the highest bid on the day, you win! You should note that the contract exchange and payment also occurs straight after the auction, so having your finance approved and a deposit ready to go is essential if you choose this route.

Before the auction begins, go over documents presented beforehand, which will tell you of the condition of the building. The auction house can be a pressure cooker of emotions, so why not enlist the help of an LJ Hooker buyer's agent to battle it out for you?

Contract exchange and settling the sale

Now that the contracts have been exchanged, the settlement process can begin. This is the conclusion of the sale transaction, which takes place around two months from the date the contracts are exchanged. Everything can now be fully finalised, so paperwork will be checked, finance approved if not already, and last preparations are put into place for moving. You can move in on the final settlement date, which typically occurs between 30 and 90 days after this period begins. A private treaty sale will come with the aforementioned four-day cooling-off period, but there is no such period if you won your new home at auction. 

As we mentioned, buying your first home in the Northern Territory may seem a complicated process, but with experienced, professional people by your side, it can be easier than you think. Contact our expert team to find out more!