{"id":134544,"date":"2025-03-14T11:30:00","date_gmt":"2025-03-14T00:30:00","guid":{"rendered":"https:\/\/propertyupdate.com.au\/?p=134544"},"modified":"2025-03-14T09:00:04","modified_gmt":"2025-03-13T22:00:04","slug":"what-does-a-bank-valuer-look-for","status":"publish","type":"post","link":"https:\/\/propertyupdate.com.au\/what-does-a-bank-valuer-look-for\/","title":{"rendered":"What does a bank valuer look for?"},"content":{"rendered":"

Property stakeholders often feel a little nervous about a bank valuer visiting.<\/p>\n

After all, valuers show up, poke around and then send a verdict to the lender about whether the price paid, or estimate made, \u2018stacks up to market<\/em>\u2019.<\/p>\n

\"Bank<\/p>\n

It can feel like there\u2019s bad news pending, particularly in a softer property price cycle like we\u2019re experiencing right now.<\/p>\n

But the discomfort is often unfounded, and mostly fuelled by a fear of the unknown.<\/p>\n

You might ask\u2026<\/p>\n

What exactly are they doing in there?<\/em><\/p>\n

What is it they\u2019re looking for?<\/em><\/p>\n

Is there anything I can do to lift my chances of a positive outcome?<\/em><\/p><\/blockquote>\n

Well, I\u2019m here to tell you that in many ways, your concerns are unwarranted.<\/p>\n

\"pencil<\/picture><\/span>

Note: <\/span>When it comes time to draw on your portfolio\u2019s hard-won equity for re-investment, there\u2019s no escaping the valuation process.<\/p><\/div><\/div>\n

While there are a number of professionals who can give you a reasonable idea of what your property is worth, the one that counts most is the registered property valuer because banks rely on their opinion before approving your loan.<\/p>\n

Valuers have always been around, but what they actually do and the elements they look for in a home remain somewhat of a mystery to the average property investor.<\/p>\n

Not only that but understanding their process can actually help you add much-needed dollars to your worth.<\/p>\n

After all, there is a science to valuation that can help you understand the process.<\/p>\n

What do property valuers do?<\/span><\/h2>\n

A property valuer is very different from a real estate agent, although they will look at similar things.<\/p>\n

A real estate agent tells you what he thinks the market will pay for a property, often advising on ways you can maximise the outcome and boost the end result.<\/p>\n

<\/div>\n

Meanwhile, a valuer will give an assessment of what the property should achieve on the market based on evidence and assuming the holding is sold \u2018as is\u2019 on the date they inspect it.<\/p>\n

Those two approaches can bring very different results.<\/p>\n

Property valuers are highly trained and expertly qualified.<\/p>\n

And they\u2019re independent.<\/p>\n

They work for a number of people, from governments to property developers, but a big part of their business is from banks.<\/p>\n

Banks employ valuers to help them determine if the property is adequate security for a loan.<\/p>\n

If you\u2019re buying a holding, they will have a reference to the contract price.<\/p>\n

But if you\u2019re using a property you already own as security for your finance, then it takes additional skill to lock down a current market value.<\/p>\n

\"Valuation3\"<\/p>\n

How do valuers assess property values?<\/span><\/h2>\n

First of all, it's important to recognise that property valuers hold professional qualifications and are registered with State authorities to conduct assessments that can be relied on by their clients.<\/p>\n

They will also be affiliated with a professional body such as the Australian Property Institute or the international body, the Royal Institute of Chartered Surveyors.<\/p>\n

All this is to say they are legally liable for the service they provide and must prove their opinion stands up to the scrutiny of a courtroom.<\/p>\n

Valuers will therefore follow strict processes and guidelines to ensure they\u2019re on the money.<\/p>\n

The key is the definition of market value<\/a> space which case law defines as:<\/p>\n

The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm\u2019s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently, and without compulsion.<\/em><\/p><\/blockquote>\n

There are arguable points within this definition, but basically, the valuer is assessing what your home should sell for in its \u201cas is\u201d condition at a specific date and time if it had been openly and fairly marketed.<\/p>\n

Knowing this shows why valuers won\u2019t predict future property value movements based on musings about market direction or what renovations and improvements you hope to carry out.<\/p>\n

Here are the three steps that property valuers take:<\/p>\n

1. The inspection<\/h3>\n

A property is typically inspected and viewed by a valuer as having three interrelated elements.<\/p>\n