Challenging A Bank Valuation

Are you unhappy with your property valuation?

One of the leading valuation management firms has come out requesting that customers stop challenging their valuations. ValEx, VMS and other valuation companies that work with the major banks receive high numbers of dispute requests however few are successful.

Additionally, a major bank that we work informed us that only 3% of people successfully challenge a valuation. In other words, don’t bother challenging a bank valuation!

However, we disagree with Valex’s assessment that bank valuers are accurate as we regularly see differences of as much as $200,000 between the valuation figures for two different banks.

Valuers are only human. They make errors and their personal opinion can effect how they value a property. The average difference we see between the valuations of two different banks is approximately 9%.

If you’re refinancing then your valuation can make all the difference. If your valuation comes in low then the Loan To Valuation Ratio (LVR) will be higher, which may mean that you’ll need to pay Lenders Mortgage Insurance. This reduces the amount of equity that you can access and increases the cost associated with setting up your mortgage!

So what should you do if you receive a low valuation?

Find out why the valuation was low

The main reason that valuations come in low is that the valuer didn’t find any comparable sales to support the value that you estimated.

However, there could be another reason. Some banks allow you to see a copy of the report, which can help you to work out why you didn’t get the value that you expected.

Find comparable sales

You can use our guide on how to value a property to find recent sales of similar properties which can be used as evidence of the value of your home. When the next valuer comes out to see your property, you can give them a copy of your sales evidence.

Forget your existing bank

If your bank has a valuation on file showing your property to be worth a particular amount then that’s it. You can get a private valuation or a valuation from another lender, however, your bank will always use the lower of the two. Your only choice is to use a different lender.

Get an up front valuation

Don’t just put in another loan application! You’ll damage your credit score by having too many enquiries on your credit file. Some banks allow us to order a free valuation up front before submitting a loan application.

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