Your complete pre-purchase due diligence checklist

due diligence checklist with money empire

due diligence checklist with money empire

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Purchasing the right or wrong home could make or break you financially. That’s why due diligence is such an important part of the home buying process. The term ‘due diligence’ refers to the process of checking all the details of a property purchase before you settle, from sorting your finances to getting a building inspection.

Ideally, you’ll complete your due diligence before you make an offer – particularly when you’re buying at auction where bids are unconditional. However, this isn’t always possible and sometimes you’ll need to make an offer that is subject to due diligence (meaning the offer is withdrawn if your conditions aren’t met).

In this situation, you may have as little as five days to complete your due diligence. Use our checklist to make sure you get it right.


If you make an offer that isn’t subject to finance approval and the bank denies your request for finance, you could lose the property and your deposit. To avoid this, it’s a great idea to get pre-approval before making an offer and to make any offer subject to final finance approval. For help making this happen, speak to a mortgage adviser.

Building, electrical and plumbing inspection

To make sure you know exactly what you’re purchasing and that there’s no major problems with the property, you need to arrange a building inspection as part of your due diligence.

Choose a professional building inspector by reading customer reviews online and asking friends, family or your mortgage adviser for a recommendation. Make sure the inspector checks structural elements under the house and for any sign of asbestos, monolithic cladding, dux quest plumbing and other problematic materials.

It could also be a good idea to get a plumbing and electrical report, particularly if the home is old. Your building inspector may be able to advise whether or not this is necessary and recommend someone to help.

Pest inspection

If you or your builder spot any signs of borer, rats, mice, cockroaches, wasps, or any damage from such pests, it could be an idea to get an exterminator in to inspect the property. They’ll be able to provide you with an idea of the scale of the problem and a quote to fix it.

Lawyer’s approval

When purchasing property, you need a property lawyer or conveyancer to help you check the contract and all the relevant legal documents. To find one, look for reviews online and recommendations from friends and family—or your mortgage adviser.

Ask for a quote before the process begins to avoid unexpected expenses.

LIM report

The LIM report or land information memorandum is a document from your local council that provides you all the information they have on the property. This will include any permits for building or renovations, resource consents and much more.

While it’s a good idea to have a look over this yourself, your lawyer will usually inspect this document for you.

Title easements and covenants

The vendor or agent should give you the title documentation to the property during your due diligence, it’s important you understand what this document means so ask your conveyancer if you’re unsure. The title will also describe any ‘easements’ and ‘covenants’.

A covenant is a requirement to do or not do something on a property, whereas an easement grants someone else access to use your land (or grants you access to another’s land) for a specific purpose.

Examples of easements include right of way easements for driveways or access for drainage. Covenants, on the other hand, might include restrictions on what type of animals you can keep on the property or the type of building materials you can use.


Is there a tenant in the property currently and if so how long is their lease? If you’re keen to move into the property after purchasing it, speak to your lawyer to make sure it’s legally possible to evict the tenant after your purchase.


If you’re a first home buyer or you’re unsure of the value of the property, invest in a valuation performed by a registered valuer. This will help you ensure you’re not paying more than you need to.


Never purchase a home without spending a little time in the neighbourhood. Before you buy, go to as many viewings and open homes as possible, eat in a nearby cafe and take a stroll through the neighbourhood at different times of the day and week. Doing this will help you understand what living in the neighbourhood will be like.

Body corporate

If you’re buying an apartment or unit that is part of a body corporate, you need to understand what you’re signing up for. How much are body corp fees? Are there any big one-off expenses coming up for the building? Is there enough money in the bank to pay for the building’s running costs right now?

Need a hand sorting your due diligence and getting your finances ready to buy? Get in touch with a mortgage adviser here at Money Empire for a friendly chat about your situation.

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