{"id":33740,"date":"2023-08-11T09:03:55","date_gmt":"2023-08-10T23:03:55","guid":{"rendered":"https:\/\/www.dnister.com.au\/?p=33740"},"modified":"2023-08-11T09:03:55","modified_gmt":"2023-08-10T23:03:55","slug":"property-valuation-what-you-need-to-know-when-buying-a-home","status":"publish","type":"post","link":"https:\/\/www.dnister.com.au\/uk\/property-valuation-what-you-need-to-know-when-buying-a-home\/","title":{"rendered":"Property Valuation: What you need to know when buying a home"},"content":{"rendered":"

When buying property, it\u2019s good to know the market value. After all, you want to know you\u2019re paying a fair amount. But the property\u2019s value is an important consideration for your lender too. And their valuation may be quite different.<\/p>\n

Just how much is a property worth? Well, it depends on who\u2019s asking.<\/p>\n

When buying a property you\u2019ll find there are different terms to estimate how much it\u2019s worth, including market value, market appraisal and bank value. And you\u2019ll most likely find they can differ, which can be confusing.<\/p>\n

Fortunately, we\u2019ve got the low down to help you understand the difference. And how bank valuations affect your loan.<\/p>\n

Market valuations vs market appraisals vs bank valuations<\/h3>\n

So, what is the difference between them all?<\/p>\n

A market valuation, which is usually undertaken by a professional and qualified valuer, gives an estimate of the expected sale price of the property on the open real estate market. It\u2019s based on current market trends and is valuable to both sellers and buyers during sale price negotiations. It can also be conducted for tax purposes for owners (ie. to calculate the taxable capital gain or capital loss).<\/p>\n

A market appraisal (aka market estimate), on the other hand, is usually completed by a real estate agent and is often done to give homeowners an idea of how much their property could sell for in the current market.<\/p>\n

But a bank valuation has an entirely different purpose. When you\u2019re buying a home or refinancing your loan, the bank will often need to conduct a bank valuation. And it can feel like a real sting if the bank valuation comes in lower than expected. But there\u2019s a reason for this. Banks are in the risk mitigation business. So, their valuation is designed to provide an estimate of the property\u2019s sale price as security against your loan should you default.<\/p>\n

The valuations can be more conservative because lenders don\u2019t take into consideration the property\u2019s value in terms of an investment. They\u2019re looking at the property in terms of recouping loan costs with a quick sale. And rather than being provided by a real estate agent who may have a vested interest in price, bank valuations must be conducted by an accredited valuer.<\/p>\n

Bank valuation process<\/h3>\n

When conducting a bank valuation, typically, the following factors are considered by the appraiser:<\/p>\n

Current market conditions \u2013 just like with a market valuation, the current market climate and recent sales data for your area are examined.<\/p>\n

Physical attributes \u2013 the location of the property, surrounding amenities, its layout, fixtures and features, size, structural condition, and council zoning information are considered.<\/p>\n

Upon completion of the valuation, a report is provided to the lender to be used in assessing your loan application. This brings us to our next point.<\/p>\n

Pitfalls to watch out for<\/h3>\n

They say that being forewarned is forearmed. So here are some pitfalls to be aware of when it comes to bank valuations.<\/p>\n

Say you apply for pre-approval, find a place and make an offer, but then the bank valuation is a lot less. Or you pay a deposit on a $700,000 off-the-plan property, only to have your bank come back with a $650,000 bank valuation when it\u2019s time to move in.<\/p>\n

If the bank valuation is less than expected, it may lead to the bank loaning you less than you hoped for. You may need to come up with extra funds to close the gap or pay lenders mortgage insurance (LMI), which can cost thousands of dollars.<\/p>\n

Alternatively, your loan application could be rejected outright.<\/p>\n

\u201cTherefore, it\u2019s a good idea to save up a bit of a buffer to handle any valuation headaches that may crop up\u201d said Dnister\u2019s Lending and Member Services Executive, Ivanka Bernyk. \u201cWorking with Dnister\u2019s loan specialists, can help you to prepare for any nasty surprises and make for a smoother home-buying journey.\u201d<\/p>\n

Find out more<\/h3>\n

If you\u2019re on the hunt for the perfect home, let us help you track down the right loan for you.\u00a0We\u2019ll be there every step of the way to help you navigate the loan process with ease, and help get the keys in your hand.<\/p>\n

Call Dnister today on 1800 353 041 and arrange to speak with a Lending Specialist or book an appointment\u00a0online.<\/a><\/p>\n

 <\/p>\n

Disclaimer:<\/strong>\u00a0The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. In providing you with this information you should consider the appropriateness of this advice with regard to your particular financial situation and needs. We advise that you carefully read our Home Loan Key Facts Sheet and TMD before acquiring a loan product. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent. Applications are subject to Dnister credit assessment criteria. Interest rates are subject to change without notice and should be verified with your local branch. Terms and conditions, including fees and charges, apply. For full details on our products and an analysis of your personal requirements, please arrange for an appointment with one of our friendly lending staff by contacting your local Dnister branch.<\/p>\n

 <\/p>","protected":false},"excerpt":{"rendered":"

When buying property, it\u2019s good to know the market value. After all, you want to know you\u2019re paying a fair amount. But the property\u2019s value is an important consideration for your lender too. And their valuation may be quite different. Just how much is a property worth? Well, it depends on who\u2019s asking. When buying […]<\/a><\/p>\n","protected":false},"author":12,"featured_media":33739,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[42],"tags":[],"class_list":["post-33740","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general"],"yoast_head":"\nProperty Valuation: What you need to know when buying a home - Dnister Bank<\/title>\n<meta name=\"description\" content=\"When buying property, it\u2019s good to know the market value. After all, you want to know you\u2019re paying a fair amount. 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