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The Art of bank valuations

We are fortunate to work with many developers and Real Estate groups across the country and we have learnt a lot about the valuation process with banks and how best to overcome valuation issues to ensure a pleasant experience for a purchaser.

Here are our top tips:

Off the Plan

  • How to choose a specific valuer – some lenders that are mortgage managers/non-bank lenders allow you to choose a valuer on a panel of valuers. Major banks use centralised systems such as Valex so that’s a luck of the draw, but if the valuation may present challenges, its best to approach a lender who can accommodate.
  • Size of apartments – we see time and time again borrowers buying a property that was noted as 50sqm but when the valuer conducts the valuation, as they measure the apartment wall to wall (not middle of the wall to middle of the wall based on architectural drawings) this means the apartment size may reduce by up to 5%. As Banks have minimum apartment size issues, a possible reduction in the apartment size needs to be taken into account and confirm if the lender will accept this upfront (opposed to finding out 2 weeks before settlement).
  • Balconies and carparks – some lenders consider this as the total size of an apartment to meet the lenders requirement of a minimum size. Please ask the lender what they can take into account.
  • Asking for a valuer NOT to be instructed – if the lender uses an automated system to decide on a valuer, you can specifically ask for a valuer not to be used.

Established property

  • No physical valuation for a purchase – Some lenders allow contract of sale to be used to determine a valuation and do not need to physically inspect the property. Depending on the LVR, security location and value of property, some lenders offer up to 90% of the property value to use the contract. This saves time and hassle in speeding up the process. Note not all lenders allow this, so it’s a good idea to ask upfront who can offer this service.
  • Desktop valuations for refinance applications – more and more lenders are using desktop or drive by valuations, which means we are getting large variances of values per property. Up to 15%! So its important to run desktop valuations with a couple of lenders to obtain the most favourable outcome, which makes a difference with clients who need to release equity for a deposit or to invest in property.

For more information on the valuation process, feel free to contact us.

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