Why you should improve your Due Diligence Approach and Avoid Missing Out [Guide]

19 July 2021

Due diligence is a vague term used to describe a level of research taken prior to a decision being made. There is no legal requirement nor parameter of what this can entail. For the nervous or process driven, this could be a time-consuming exercise that could result in analysis paralysis. The feeling of being so overwhelmed with tasks and decisions that no action is taken and the property is sold. For the nonchalant, it could be as simple as a strata, or building inspection report review and a contract review by a solicitor.

The thing that few people realise is that every property has problems. A 40 year old house will have structural issues from time to time. An 1920s art deco block needs to have the roof retiled. These are normal occurrences to building as time goes by and shouldn’t be considered a barrier to purchase. These need to be taken into account on a property by property basis. Its imperative that your due diligence reflects each property.

What is the best and most efficient approach to conduct solid due diligence?

The answer is somewhere between the two extremes of the spectrum. Time is a key component in every property purchase and setting yourself to move ahead of your competitors on a property could be the difference between purchasing and missing out. How do you place yourself in conducting fast due diligence that is thorough enough to provide you with the confidence you need in order to purchase a property?

Across Sydney, each suburb or region is prone to certain occurrences or problems more so than others. Focusing your due diligence to be region or even suburb specific is key to finding potential skeletons that are more likely to be in one area of Sydney compared to another.

Inner West

The Inner West region of Sydney is a very popular region for young families and first home buyers who enjoy proximity to the city. Sydney Airport has its flight path that crosses over many inner west suburbs. Understanding that flight paths are affected by wind strength and direction shows that the prevailing wind in Sydney is a north-easterly which facilities most arrivals to fly over the inner west for most of the year.


The Inner West has and still contains remnants of its industrial history. An externality of this industry has been lead poisoning in dwellings and surrounding soil. If you have a green thumb and your hobby was maintaining a vegetable garden. This would be of concern. If you have young kids who play outside and around the house or even underneath the house this would be of concern. Basing your due diligence on these area specific problems could help formulate a better due diligence plan to focus on things that are most important to you and have a greater likelihood of occurring in a given area.


Low Probability and High Consequence Events

Another part of due diligence is to think about things that have occurred before in the past but are so infrequent that we forget these things had occurred. These once in a lifetime events have to potential to devastate your family and home. Even though these events have a low probability of occurrence they have a high level of impact. Complete unawareness of being in a flood zone or bush fire prone area is negligent towards the safety of your family. You can find a flood-prone land map in the Local Environment Plan of each council across New South Wales.

Area-specific due diligence can help you focus on the most probable issues that you could you encounter with any particular property. The ‘kitchen sink’ approach might cost you time on improbable concerns which could cost you the property especially when time is of the essence.

Alexander Gibson

Are you confident that your due diligence would not lead you to purchase a lemon?

Why not outsource the due diligence to an expert?

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