Inside a Buyer’s Agent’s Due Diligence

Ever wonder what makes a buyer’s agent so much better at snapping up the right property than just anyone else in the market?

A huge part of their edge comes down to their ability to dig deep, gather and interpret a wide range of data, and piece it all together to get a clear picture of whether a property is a smart buy. They assess everything from local market trends to potential risks, giving you a well-rounded view of the property’s value and future potential.

By understanding the true market value—based on facts, not just advertised prices—they help you avoid overpaying or buying a lemon.

Here’s how professional buyers’ agents conduct their due diligence to ensure you’re making informed, confident decisions when purchasing property.

1. Finding a Property

Property Research: The first step is digging into the property’s past. This includes checking out who owned it before, what it sold for previously, and if there have been any major renovations or changes. A solid buyers’ agent will give you all the juicy details with reports on crime rates, past sales for the property, and profiles of the suburb where it’s located.

A Physical Inspection: Next up is setting up home inspections to catch any issues, like structural problems or pests. Your agent will go the extra mile by providing detailed walkthrough videos. These videos will cover everything from the property’s structural integrity and potential maintenance issues to how the floor plan works. Plus, they’ll include drone footage to give you a bird’s-eye view of the roof, nearby properties, and the immediate area around the home.

What’s the neighbourhood like: Your agent will also research the neighbourhood to make sure it suits your needs. This means looking into local amenities, crime rates, schools, and any future development plans that might impact the area.

Contract Review: They’ll pore over the purchase agreement and other legal documents to make sure there aren’t any hidden traps or unfavourable terms that could come back to bite you.

Legal and Regulatory Checks: Finally, they’ll ensure the property meets all local zoning laws, building codes, and any other regulations that might apply.

2. Understanding Market Value

To figure out if the property is priced fairly, your agent will compare it to similar homes in the area. They’ll prepare a market appraisal, which is a crucial document that helps you make informed pricing decisions. This appraisal is based on the most up-to-date market data and is essential for determining the fair market value, supporting negotiations, and assessing current market conditions.

3. Negotiation Planning

“By now, a skilled buyer’s agent has thoroughly researched the property’s quality and true market value. Next, they need to grasp the sale method and how the listing agent handles the process. Here’s a rundown of the most common methods:”

Private Offers: If you’re making a private offer, the key is to submit your best offer right from the start. You typically won’t get a second chance to up your price unless your offer is close to competing offers. In these cases, it’s important to know how to make your offer stand out in ways other than just price.

Private Bidding Auction: If you’re in a private bidding auction, you’ll start with a written offer and then be prepared to increase your price if asked. Your agent will guide you through this process to maximize your chances of winning.

Sale by Tender: For sales by tender, you’ll need to complete all your due diligence and submit a written offer before a deadline. After that, the selling agent reviews the best offers, which could lead to auction-style bidding or multiple rounds of negotiations.

Bidding at Auction: When you’re at an auction with multiple bidders, a great buyer’s agent will have a strategy to create the impression of having unlimited funds. They’ll aim to make the auction fast-paced and high-pressure to intimidate other bidders, while still managing to keep your budget intact.

Bidding at Failed Auctions: In Victoria, if a property doesn’t meet its reserve price, the highest bidder gets the chance for exclusive negotiations with the seller right after the auction. Your agent will know how to handle these situations and navigate vendor bids to secure the best outcome, even if the reserve hasn’t been met.

By breaking down the process this way, buyers’ agents ensure you’re not only well-informed but also strategically positioned to get the best deal on your new property.

Before signing a contract a buyer should:

Check key legal, financial and physical issues to avoid unexpected costs or restrictions that a buyer must check with there legal team:

1. Budget and finance

• Confirm total budget: deposit, stamp duty, loan fees, inspections, legal fees, adjustments.
• Get lender pre-approval and final loan conditions ready before exchange.

2. Title and registered interests 

• Review Certificate of Title and plan for easements, covenants, mortgages or caveats that limit use or access.

3. Planning, zoning and overlays

• Check council zoning and overlays (heritage, bushfire, flood, environmental) for development or renovation limits.

4. Services and utilities

• Confirm water, sewer, electricity, gas, phone/NBN connections and any on-site systems (septic, tanks). Check stormwater and flood risk.

5. Owners corporation / strata (if applicable)

• Review financials, insurance, meeting minutes, levies and rules on pets, renovations and rentals & outgoings and costs
• Verify council rates, water charges, owners corporation fees and potential land tax or special levies.

6. Contract and legal review

• Obtain the contract of sale and Section 32 (Vendor’s Statement); have a conveyancer/solicitor review for risks, included fixtures and special conditions.
• Understand cooling-off rights and auction rules (auctions usually don’t allow finance or inspection conditions).

7. Settlement and insurance

• Confirm settlement date, adjustments and final inspection. Arrange building insurance from exchange as required by your lender.

For more information on buyer due diligence, Consumer Affairs Victoria offers excellent resources.