Key Takeaways
- Bank valuations determine how much lenders will advance against a property
- Valuations can differ from purchase price - creating shortfalls or opportunities
- Different lenders use different valuers with potentially different results
- Low valuations can be challenged with comparable sales evidence
- Valuation type varies - desktop, drive-by, or full inspection
- A broker can help navigate valuation issues across multiple lenders
Property valuation is a critical step in the home loan process. The lender's valuation determines your loan-to-value ratio (LVR) and therefore how much they will lend, what interest rate applies, and whether you need Lenders Mortgage Insurance.
At Mortgage and Finance Advisory, we help clients navigate valuation issues and find solutions when valuations do not meet expectations.
Types of Valuations
Desktop Valuation
An automated assessment using property data and comparable sales without physical inspection. Common for refinances and lower-risk scenarios.
Drive-by Valuation
The valuer views the property externally without entering. Used for standard residential properties in good condition.
Full Inspection
A complete internal and external assessment. Required for unusual properties, higher LVR loans, or when other methods are inconclusive.
What Valuers Consider
Valuers assess comparable recent sales in the area (the primary factor), property condition and presentation, land size and dimensions, location and aspect, zoning and potential uses, and current market conditions.
Low Valuation Impact
If a property values below purchase price, you need to fund the shortfall. For example, buying at $700,000 with 10% deposit but valuation at $680,000 means your 10% is now based on $680,000 - requiring an additional $2,000+ to maintain the same LVR.
Dealing with Low Valuations
Options when facing a low valuation include renegotiating the purchase price with the vendor, contributing additional deposit to cover the shortfall, requesting a valuation review with comparable sales evidence, or trying a different lender whose valuer may assess differently.
Broker Advantage: Different lenders use different valuers. A property that values at $650,000 with one lender might value at $680,000 with another. We can strategically select lenders likely to achieve favourable valuations.
Frequently Asked Questions
A bank valuation is an assessment of a property's market value ordered by the lender. It determines how much they will lend against the property. The valuation may differ from the purchase price or your expectations.
A low valuation creates a shortfall you need to cover. Options include renegotiating the purchase price, contributing more deposit, requesting a valuation review, or trying a different lender whose valuer may assess differently.
Valuers consider comparable sales, property condition, land size, location, zoning, and market conditions. They typically use recent sales of similar properties in the area as the primary guide.
Yes. You can provide comparable sales evidence supporting a higher value and request a review. Alternatively, a different lender may use a different valuer who assesses the property differently.
No. Different lenders use different valuers, and each valuer may assess differently. A property might value at $650,000 with one lender and $680,000 with another. This is why broker access to multiple lenders matters.
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