Property due diligence in NSW: the full checklist

Property due diligence is everything you check about a property before you commit to buying it: the contract, the building, the strata scheme if it's an apartment, the land and what's planned around it. In NSW, most of the answers are already written down in the contract, the strata records, the building and pest report and council and state records. Due diligence means reading them before you exchange, not after.

Most costly surprises for buyers aren't hidden at all. They sit in a clause on page 40, a vote in the strata minutes or an application lodged next door. This checklist walks through what to check, where to find it and who to ask.

Why due diligence matters before exchange

In NSW, once contracts are exchanged you're bound by them. For most private sales you get a five business day cooling-off period, but pulling out during it costs 0.25% of the price, and there's no cooling-off at all at auction or when a section 66W certificate is used. So the time to find problems is before you exchange, while you can still negotiate, ask questions or walk away for free.

The contract for sale

The seller's contract must include certain documents. Have a solicitor or conveyancer review it, and read these parts yourself:

• The special conditions. These change the standard terms. Watch for clauses that move costs onto you, limit your rights to ask questions, or charge high interest if settlement is late.
• The planning certificate (section 10.7). It shows the zoning and whether the land is affected by things like flood planning, bushfire, heritage or a road widening.
• The title search and plans. These show the owner, any mortgages and any easements or covenants that limit what you can do with the land.
• The sewer and drainage diagram. This shows where the pipes run, which matters if you plan to extend.
• Approval certificates. If the property has an extension, pool or other building work, check there's an occupation certificate or building information certificate for it.

The building

A pre-purchase building and pest inspection, done to Australian Standard AS 4349, tells you about defects, safety hazards and timber pests the inspector could see on the day. Read the whole report, not just the summary, and pay attention to the areas the inspector couldn't get to. "Not inspected" isn't the same as "all clear".

The strata scheme (apartments and townhouses)

If you're buying into a strata scheme, the building's finances and records matter as much as the unit. A strata report summarises the owners corporation's records. Check:

• The capital works fund balance against the 10-year capital works plan
• Special levies raised, proposed or deferred in recent minutes
• Defects, leaks, waterproofing and fire safety work
• Legal disputes, including with the builder
• The by-laws, especially on pets, renovations and short-term letting

The land and what's around it

Look beyond the property line:

• Development nearby. Search the NSW Planning Portal for development applications (DAs) and complying development certificates (CDCs) near the address. A large project next door could affect sun, views, privacy and noise for years.
• Zoning and housing rules. NSW's newer housing rules allow more homes near some stations and town centres, which can change what gets built on your street.
• Flood, bushfire and landslip. Check the planning certificate and the council and state maps, and get an insurance quote early.
• Noise. Airport noise maps, helipads, main roads, rail lines and licensed venues all shape day-to-day life.
• Government orders. For apartments, check the NSW Building Commission's register of orders against the building.

The money

Before you sign, make sure you know the full cost: the deposit, transfer duty, legal and inspection fees, loan costs, and ongoing costs such as strata levies, council rates and insurance. Get finance pre-approval in writing and check the lender is comfortable with the property type.

How WIBI helps

WIBI reads the documents and public records for a property and tells you, in plain English, what could cost you before you sign. Type in an address to check the public records, then add the contract, strata report and building and pest report. Every finding shows the page it came from, plus the questions to ask your solicitor, agent or strata manager. WIBI isn't legal advice, a valuation or a building inspection, so keep your solicitor or conveyancer and your inspector involved.

Questions

What is property due diligence?

It's the checking you do before you commit to buying: reading the contract, inspecting the building, reviewing strata records and checking the land and its surroundings, so you know what you're buying and what it could cost.

When should I do due diligence on a NSW property?

Before you exchange contracts. After exchange you're bound by the contract, and pulling out during the cooling-off period costs 0.25% of the price. At auction there's no cooling-off at all, so everything has to be done before the auction day.

Do I need a solicitor if I do my own due diligence?

Yes. A solicitor or conveyancer reviews the contract, explains your rights and handles settlement. Doing your own checks means you ask them better questions and nothing important is missed.

How long does property due diligence take?

It depends on the property and how quickly you get the documents. A building and pest inspection and a strata report usually take a few days to book and receive, so start as soon as you're serious about a property.

What are the most common problems found?

Special levies in strata buildings, building defects and water damage, unapproved building work, clauses that shift costs to the buyer, and large developments planned nearby are among the most common and most expensive.

Keep reading

• First home buyer checklist for NSW
• Buying a tenanted property in NSW: what to check
• What to look out for when buying a property in NSW
• NSW cooling-off period and 66W certificate

General information only, not legal, financial or building advice. See our Terms of use.