Why Skipping Due Diligence in Property Buying Can Cost You Thousands

As buyer’s agents, we’ve seen a concerning trend over the last few weeks: more buyers are rushing into property purchases without performing basic due diligence. This includes skipping building and pest inspections, failing to check comparable sales, and often entering bidding wars without fully understanding what they’re committing to. Unfortunately, this lack of research is leading to overpaying, discovering issues post-purchase, and inflating property prices.

What’s important to understand is that this isn’t just a small oversight. These decisions can have long-term financial consequences, particularly in a market that is no longer seeing rapid price growth month to month. In the current environment, mistakes are far less forgiving.

Skipping Inspections: A Risky Move

It’s shocking how often buyers forgo building and pest inspections to secure a property quickly. These inspections are vital, as they can uncover hidden issues like structural damage or pest infestations that could cost thousands in repairs. Without them, buyers may be left with unexpected and expensive problems once the property settles.

A building and pest inspection is not just a box to tick. It is one of the only opportunities a buyer has to properly understand the condition of the property before committing to a contract. Issues such as rising damp, structural movement, roofing problems, plumbing defects, or termite activity are not always visible during an open inspection, and without a professional assessment, they can easily go unnoticed.

A recent example: we looked at a building and pest report that reported evidence of termites. We requested permission to perform a further inspection on the property however the seller declined our request. This was a walkaway item for us and so we passed on the property. Someone subsequently purchased that property and when we called the agent to find out the sale price, we learned that the purchaser had not even downloaded the original building and pest report.

This is the type of scenario that highlights the risk. Not only was further investigation declined, but the buyer did not review the information that was already available to them. That decision could result in significant costs down the track, depending on the extent of the issue.

The Cost of Ignoring Comparable Sales

Another issue is the failure to review comparable sales (comps). Without knowing what similar properties in the area have sold for, buyers often end up overpaying. We’ve seen many buyers rely solely on an agent’s recommendation or emotional impulse, which can lead to paying tens of thousands more than necessary.

Comparable sales provide context. They help buyers understand where a property sits within the market and whether the asking price is reasonable. Without this, it becomes very easy to justify a higher price, particularly in a competitive environment.

We run full competitive analysis on every property we pursue. We’ve seen properties where all of the comparable sales are $1.4–1.5, the seller wants $1.6, and the buyer pays $1.65 with no competition, costing them $50,000 to $150,000 more than needed.

In many of these situations, there is no external pressure forcing the buyer to stretch. The decision is often driven by a lack of clarity around value.

Unlike what we saw during 2020–22, prices are not growing month to month. In fact, overall we’ve seen a softening in prices over the last year. This means that overpaying is far more likely to have a lasting impact.

It’s crucial to research the local area to ensure you’re not overvaluing a property before you sign a contract.

Why Buyers Are Making These Mistakes

In many cases, this behaviour is not intentional. It is often driven by a combination of pressure, fatigue, and urgency.

Buyers who have missed out on multiple properties can feel like they need to act quickly when the next opportunity arises. There can also be pressure from agents, fast timelines, or a fear that delaying will result in missing out again.

While these feelings are understandable, they can lead to decisions that are reactive rather than considered.

The reality is that in most cases, there will be another opportunity. The cost of making a rushed decision is often far greater than the cost of waiting for the right property.

Market Inflation and Long-Term Consequences

When buyers overpay, it creates temporary price inflation in the market, which in turn leads to higher listings across the board. This cycle can result in an unsustainable market and eventual price corrections, leaving buyers with a home valued at less than they purchased for.

This doesn’t just affect individual buyers. It influences broader market behaviour. Higher sale prices become reference points for future listings, and vendor expectations shift accordingly.

However, if those prices are not supported by genuine demand, the market will eventually correct.

For buyers, this can mean holding a property that is worth less than the purchase price, which can limit flexibility when it comes to selling, refinancing, or upgrading in the future.

A Call for Informed Decisions

We want to be very clear with buyers: do your due diligence.

Don’t let fear of missing out or pressure from an agent drive you into a poor decision. With so much stock hitting the market, there is no need to rush into a purchase without fully understanding it.

Take the time to review comparable sales, organise the necessary inspections, and make sure you are clear on both the value and the condition of the property.

Buying a home is a significant investment. It should be approached with clarity, not urgency.

Final Thoughts

The goal is not to remove risk entirely. Every property purchase carries some level of uncertainty. The goal is to understand that risk, factor it into your decision, and move forward with confidence.

When the right research is done upfront, buyers are in a far stronger position to negotiate, make informed decisions, and avoid costly surprises after settlement.

If you’re unsure where to start, or want guidance through the process, we’re here to help ensure you’re making the right move.

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