Buying property is not only the biggest financial transaction you are likely to make, it is also potentially the most stressful. But it doesn't have to be that way, as long as you understand the process involved and how to deal with it. Here is our simple, step-by-step guide to a painless property purchase.

Step 1: Get your finances sorted

It may feel like you are doing things in reverse, but getting your loan sorted is the first thing you need to work out. Even before you have found a property, or decided which area to start looking in, you need to sit down with your bank manager or mortgage broker.

Knowing how much you can borrow and, more importantly, how much you can afford is the first step to any property purchase. Don't forget to leave some breathing room for interest rate rises or other unforseen eventualities.

Brett Morgan, ING Direct executive director of retail mortgages, says: "A lot of people just go out and borrow as much as they can. But you need to be careful to understand how much you can repay. If something happens in your life, like losing your job, it can put a lot of strain on you."

Step 2: Find the property

Finding a property is the fun bit, although it can also be quite exhausting. If you are going to be an owner-occupier, ask yourself if a property meets all the criteria that are essential for your family. Are there enough bedrooms? Is it close to schools and transport? Does it have a big enough backyard for the kids?

If you are an investor you still need to tick all the boxes. Is the property in a growth area? Is it located close to amenities and transport?

Patrick Bright, author of The Insider's Guide To Buying Real Estate, says buyers should inspect at least 100 properties before making a decision. "You need to inspect 100 to get a clear understanding of what's available and also to become price savvy," he says.

Step 3: Organise inspections

Once you've found your dream home or perfect investment property, it's time to go over it with a fine-tooth comb. Pest and building inspections are a must. Use a reputable firm and once you have a report go over it in detail.

Michael Cameron, Commonwealth Bank Group executive of retail banking, says such inspections are mandatory. "It could save you a lot of time and money in the long term if there are any problems," he says.

Step 4: Exchange contracts

Now it gets serious. Once you have exchanged contracts with the seller, it is usually only about six weeks before settlement, when the property will be yours. The contract to buy the property will contain all the vital details - from the agreed price to the settlement date and the penalties if you don't complete the purchase in this time frame - which you should go over with your solicitor or conveyancer.

You shouldn't feel overawed by the process; there are legal safeguards you can fall back on.

For one, you can insert clauses into the contract that spell out conditions that have to be met by the seller, such as that they fix a leaky roof before the sale can go through. In all states except Western Australia and Tasmania, there is also a cooling-off period, in which you can pull out of the contract without penalties. The period in NSW is five working days.

Step 5: Do background checks

By this stage you should have engaged the services of a solicitor or conveyancer.

As well as going over the contract for the property, they will complete checks with the local council. That way you will know if there are plans to build a motorway near the property, or if there is a sewer line in the backyard that the council will dig up every time there is a blockage.

Your solicitor or conveyancer should also make sure there are no unpaid rates attached to the property, interact with your bank so that borrowed funds are ready to go by settlement date and work out stamp duties and other taxes.

Property author and founder of Destiny Financial Solutions Margaret Lomas says there is very little difference between the service provided by a solicitor and a conveyancer for most property purchases. If there is something unusual about a property - you may, for example, be buying a room in a hotel - then you are better off with a solicitor.

Step 6: Insurance

It is easily overlooked, but you won't be able to finalise the purchase of a property without insurance. Banks demand a property is insured from settlement day, so you need to have this organised in advance. If you are buying in Queensland the situation is even more urgent, because the standard contract says you're responsible for insurance within two days of exchanging contracts. If you don't get insured in time, settlement will be delayed, which will expose you to financial penalties. That's the last thing you need at a time when your finances are likely to be stretched.