Step 1 - Do your research

Whether you are a first-timer or an experienced homebuyer, you need to ask yourself why you want to buy. Will you want to live in it or are you buying it as an investment to rent it out and pay it off? Do you want a house or apartment, large or small, townhouse or land to build?

Whatever your answer, the more real estate market research you do, the more likely you are to effectively define your goals and understand what's affordable.

Narrow your search, then get onto mailing lists and develop good relationships with real estate agents in the area in which you are looking. Keep in regular contact with them. They can alert you to properties about to come onto the market in your price range.

Step 2 - Work out how much you can afford

Calculate how much of your income you can afford to spend on loan repayments. Note that "mortgage stress" is commonly defined as households who pay more than 30% of their gross household income in housing costs, so when considering a mortgage you should ideally be calculating the loan repayments on one third or less of your pre-tax income. If you haven't already, use our budget planner to work out what is realistically affordable for you.

You may need a deposit of 10 per cent or more of the initial purchase price (see our ‘Save for Set Goals' guide) and you will also need to factor in some initial upfront expenses such as legal fees, loan establishment fees, government charges, property and pest inspection fees, moving costs and building and contents insurance.

First home buyers may be eligible for grants and exemptions on stamp duty. See our ‘First Homebuyers Guide' information or log on to www.firsthome.gov.au.

Step 3 - Find a lender

Preferably, start looking for your loan before you start looking for a property.

Your current bank should be your first port of call, to see what they can offer. And do some research online to see who is offering the best mortgage interest rates. Canstar.com.au and infochoice.com.au are both great places to start; choice.com.au often runs good comparison reports.

Once you have targeted one of two banks, approach them in person to get approval "in principle" for your loan. This way, if you decide that you want to buy at auction, you have the money organised ahead of time.

There are many loans on offer, so you will need to do more research to understand the terms. See our ‘Choosing a Home Loan' guide for more information.

Step 4 - The buying process

You've found the property you want to buy and arranged building or pest inspections. They are good, you make an offer, negotiate the price and the final offer is accepted.

Contact your solicitor to do title or body corporate searches, draw up a contract, then arrange to exchange it with the seller.

Once you exchange contracts you are legally bound to go ahead with the purchase. This is also when you pay your deposit of around 10 per cent of the purchase price.

Sign the contract if you and your solicitor are satisfied that everything is in order. Often there may be between four weeks and three months between exchange and settlement. During this time, you can arrange building and contents insurance on the property, and income protection insurance for yourself.

On the day you are due to settle, before your solicitor passes over the final cheque (or makes the transfer online) you should ask to inspect the property. You need to check that no damage has been done to it in the intervening period and that all fixtures and fittings that appear in the contract are still in place.

You don't have to settle on the property until all these conditions have been met.