What Is Property Due Diligence and How to Do It Well

01st Nov, 2021 | Customer eNews

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You hear a lot said about the importance of due diligence when purchasing property. But what exactly does due diligence encompass?

The term ‘due diligence means to take reasonable care and caution. When applied in the context of property, it refers to thorough research into every aspect of the property purchase. From desktop searches and site inspections to financial planning and legal checks, due diligence helps you make buying decisions guided by facts rather than emotions.

Even before you begin house hunting, use due diligence to inform the foundations of your property buying decisions. Are you buying for investment, or will you be the owner-occupier? Have you run a cash flow projection that takes into account a rise in interest rates? The earlier on in the property buying journey that you begin to ask questions and conduct appraisals, the less chance of nasty surprises down the track.

Here’s the kind of background research you should be doing when buying a home.


Conducting a cash flow analysis before you buy is a great way to build a framework for enabling the most effective and efficient use of available cash. It will help you calculate the total costs of buying the property, including expenses like stamp duty, building inspections, lenders mortgage insurance, council rates and property management fees. It will also help you protect against interest rate rises on mortgage repayments and future scenarios like losing your job or starting a family.

We have you covered on all stages of your property journey

Talk to your local Yellow Brick Road mortgage broker about getting mortgage pre-approval to help you narrow down the locations in which you can afford to buy. Advice from a trusted and experienced mortgage broker will help you work out where you stand and what would be a good amount to borrow. Your broker should explain how important it is to only go to a limit you can comfortably afford.

Market conditions

 Ensure your research is thorough. Know the population growth and the economics of the area you’re thinking of investing in. Are there jobs? Schools and amenities? Do places families want to go? What is the likely rent? And, is all this information coming from a reputable source, not the developer?

 Comprehensive online research is vital for gathering statistics like demand from buyers (number of sales), history of capital growth and comparable sales. Yellow Brick Road mortgage brokers have access to specific property analysis tools to source the most up-to-date market information, including suburb trends and demographic insights. Speak to us about how we can assist with your research.


Whether you’re buying a home to live in or invest in, factors like convenience to public transport, local shops, cafes, schools and employment will drive capital growth.

Back your online research up with in-person visits to give you a feel for factors you can’t research online, like traffic noise, crime and general vibe. Be aware that open homes are often scheduled for the time of day that puts the property in the best light, so visit the neighbourhood at different times of the day and night. 

Professional advice

Several areas of property research are best conducted by a professional who is experienced and licensed to equip you with the correct information. Property inspectors, for example, can spot faults that are not visible to an untrained eye. When a home has been styled to make it look suitable for sale, a building inspection looks beyond this façade to investigate unseen areas like roof and underfloor spaces.

 Conveyancers vet the legal documentation, including reviewing contracts and conducting searches to ensure the property is saleable.

 Mortgage brokers scope the market on your behalf to find the right loan to match your unique circumstance. They cut through the jargon to help you make an informed decision about interest rates and loan features.

Reach out to connect with a Yellow Brick Road mortgage broker today.