What is a Bank’s valuation and cost?
A valuation organized by the bank does NOT reflect how much your property will sell for; in fact it’s common to see a 5-20% difference in selling price and the valuation itself.
End of the day the bank’s valuation is for the BANKS purposes only.
There are three (3) types of valuations
Borrowing is based on income VS Monthly liabilities and most importantly choosing the right lender that support your balance/file.
So here are a few key points to consider;
1. Desktop valuation – Where a bank staff does a search online and using property software such as the one offered by RP-Data, PriceFinder and APM.
2. Kerbside valuation – One of the banks panel of registered valuer is assigned to drive past the property and take note + do a desktop valuation.
3. Full valuation – One of the banks panel of registered valuer is to access the property and take note.
You can not choose the type of valuation you want , the bank will advise which valuation type they prefer based on the deal.
What is the purpose of a Bank’s valuation?
It is to protect the bank’s asset ( Your property) and to make sure they can recover the debt/mortgage should you default on your loan.
How much does a Bank’s valuation cost?
It’s free with most of the larger and top 20 banks. Smaller banks may pass on this cost, and it’s around $300- 500.
Does the valuation result differ between different banks?
Yes it does, especially for refinance files. we generally see a 5-30% difference between different bank’s valuation report, which can result in a different equity/cash out outcome and LVR and interest rate.
For purchase files, the valuation are normally similar. Unless it’s a unique property, a development site or zoned non residential.