The most common and most likely answer to this crossword clue is the 7 letter word DIVINES
I've seen this crossword clue in The Daily Telegraph
D
I
V
I
N
E
S
More clues leading to the result DIVINES
Buddy explains!

The straight part
We know that "looks for water" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case looks for water = divines.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does DIVINES mean?
DIVINES noun- One skilled in divinity; a theologian.
- A minister of the gospel; a priest; a clergyman.
- (often capitalized, with 'the') God or a god, particularly in its aspect as a transcendental concept.
- To foretell (something), especially by the use of divination.
- To guess or discover (something) through intuition or insight.
- To search for (underground objects or water) using a divining rod.
- To render divine; to deify.