Property Due Diligence Checklist: The Complete Australian Guide
A comprehensive property due diligence checklist for Australian buyers covering legal, structural, financial, and planning checks across all states and territories. Avoid costly mistakes with this step-by-step guide.
Definition
What is property due diligence?
Property due diligence is the systematic process of investigating and verifying all legal, structural, financial, and planning aspects of a property before committing to purchase. It protects buyers from hidden defects, legal complications, and unexpected costs that could arise after settlement.
Buying property is likely the largest financial commitment you will ever make. Skipping or rushing due diligence is one of the most common — and costly — mistakes Australian buyers make. Whether you are a first home buyer or an experienced investor, a thorough due diligence process helps you avoid nasty surprises and negotiate from a position of strength.
This comprehensive checklist covers everything you need to investigate before making an offer, exchanging contracts, and completing settlement. For a deeper understanding of property title searches and what they reveal, read our dedicated guide.
Phase 1: Before Making an Offer
- 1
Research the suburb and street
Investigate median prices, recent sales, crime statistics, school catchments, public transport access, and planned infrastructure. Check council development applications for nearby land that could affect your property value or lifestyle.
- 2
Verify the property listing details
Cross-check the advertised land size, floor plan, number of bedrooms and bathrooms, and parking against the title and council records. Agents sometimes overstate property features.
- 3
Check zoning and planning overlays
Use your state or council planning portal to confirm the zoning (residential, commercial, mixed-use) and check for overlays such as heritage, bushfire, flood, or environmental significance. These can restrict future renovations or development.
- 4
Review comparable sales
Analyse recent sales of similar properties in the area to determine a fair market value. Look at properties sold in the last 3 to 6 months within a 1km radius.
- 5
Arrange a building and pest inspection
Engage a licensed building inspector and pest inspector (or a combined service) to assess the property for structural defects, termite damage, rising damp, asbestos, and other issues. Budget $400 to $800 depending on the property size.
- 6
Check for easements and encumbrances
Order a title search to identify any easements (rights of way, drainage, utility access), caveats, covenants, or mortgages registered against the property. These can restrict what you can do with the land.
Phase 2: Before Exchanging Contracts
- 1
Have the contract reviewed by a conveyancer or solicitor
A qualified legal professional should review the entire contract of sale, including all special conditions, annexures, and disclosure documents. Never sign a property contract without independent legal advice.
- 2
Review the vendor disclosure documents
In Victoria, check the Section 32 Vendor Statement. In NSW, review the contract annexures including the zoning certificate (Section 149/10.7), drainage diagram, and title search. In SA, review Form 1. Each state has specific disclosure requirements.
- 3
Confirm finance pre-approval is current
Ensure your home loan pre-approval has not expired and that the lender is likely to approve finance for this specific property. Some property types (studios, rural land, high-density units) can be harder to finance.
- 4
Review strata or body corporate records (if applicable)
For apartments and townhouses, obtain a strata inspection report covering the meeting minutes (at least 2 years), financial statements, sinking fund balance, by-laws, and any upcoming special levies or litigation. Budget $200 to $400 for a strata report.
- 5
Check for outstanding council or water rates
Request confirmation that all council rates, water rates, and land tax have been paid. Unpaid rates can become your liability after settlement.
- 6
Verify the property boundaries
If there is any uncertainty about fences, encroachments, or boundary lines, consider engaging a licensed surveyor. Boundary disputes are expensive and stressful to resolve after purchase.
- 7
Negotiate special conditions
Work with your conveyancer to include appropriate special conditions in the contract, such as subject to finance, subject to satisfactory building and pest inspection, or subject to sale of existing property.
Phase 3: Before Settlement
- 1
Conduct a pre-settlement inspection
Walk through the property 1 to 2 days before settlement to verify it is in the same condition as when you signed the contract. Check that all included fixtures and fittings are present and no damage has occurred.
- 2
Confirm insurance is arranged
Organise building insurance to commence from the date of exchange (in NSW and QLD) or settlement. In some states, risk passes to the buyer at exchange, not settlement. Do not leave a gap in coverage.
- 3
Verify all contract conditions have been satisfied
Confirm with your conveyancer that all special conditions (finance approval, building inspection clearance, etc.) have been formally satisfied or waived within the required timeframes.
- 4
Arrange final settlement funds
Ensure your lender is ready to settle and that you have the balance of the purchase price (plus stamp duty and legal fees) available. Settlement typically occurs electronically via PEXA in most states.
- 5
Confirm utility connections
Arrange for electricity, gas, water, internet, and other utilities to be connected or transferred into your name from settlement day.
- 6
Collect keys and access details
After settlement is confirmed, collect all keys, remote controls, security codes, and access cards from the agent or vendor. Check that all locks and access points work correctly.
State-Specific Due Diligence Requirements
Each Australian state and territory has different disclosure requirements and legal processes for property transactions. The table below summarises the key documents and requirements you should be aware of.
State-Specific Disclosure Documents and Requirements
| State | Key Disclosure Document | Cooling-Off Period | Key Requirement |
|---|---|---|---|
| NSW | Contract with annexures (S.149/10.7 certificate, title search, drainage diagram) | 5 business days | Vendor must attach zoning certificate and title search to contract |
| VIC | Section 32 Vendor Statement | 3 business days | Section 32 must be provided before contract is signed; buyer can rescind if defective |
| QLD | Contract with disclosure statement (Form 24c for community title) | 5 business days | Pool safety certificate required; disclosure of neighbourhood disputes |
| SA | Form 1 Vendor Statement | 2 clear business days | Form 1 must include certificate of title, council rates, and zoning information |
| WA | Joint Form of General Conditions | No statutory cooling-off | No mandatory vendor disclosure; buyer must conduct own searches |
| TAS | Vendor disclosure (Property Agents and Land Transactions Act 2016) | Varies | Vendor must disclose known defects and relevant property information |
| ACT | Contract with mandatory inspections attached | 5 business days | Building and pest reports, energy efficiency rating, and compliance certificates must be attached |
| NT | Contract of sale | 4 business days | Buyer should request council and utility searches independently |
What Happens If You Skip Due Diligence?
Cutting corners on due diligence can lead to serious financial and legal consequences. Here are real-world examples of what can go wrong:
- Undisclosed structural defects: A buyer in Sydney purchased a renovated terrace without a building and pest inspection, only to discover extensive termite damage and illegal building work that cost over $120,000 to rectify. A $500 inspection would have revealed these issues before exchange.
- Zoning restrictions: An investor in Melbourne bought a property intending to subdivide, but failed to check the planning overlay. The heritage overlay prevented any subdivision or significant external modifications, making the investment unviable.
- Strata special levy: A unit buyer in Brisbane did not request a strata inspection report and was hit with a $35,000 special levy for building defect remediation three months after settlement.
- Easement surprises: A buyer in Perth planned to build a granny flat but discovered a sewer easement running through the backyard, preventing any construction in that area.
- Contaminated land: A buyer near an industrial area failed to check the contaminated land register and inherited a costly remediation obligation.
The cost of due diligence is minimal compared to the cost of getting it wrong. A comprehensive building inspection ($400-$800), strata report ($200-$400), and contract review ($800-$1,500) typically total less than $2,500 — a tiny fraction of a property's purchase price but potentially saving you tens or hundreds of thousands of dollars.
Frequently Asked Questions
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Analyse a Contract FreeRelated Guides
- Property Contract Red Flags — Learn the warning signs to watch for in any property contract.
- Section 32 Vendor Statement Explained — A deep dive into Victoria's mandatory vendor disclosure document.
- How to Read a Property Contract — Step-by-step guide to understanding every section of an Australian property contract.
- First Home Buyer Guide — Complete guide to buying your first home in Australia.