Oct 22, 2026 · 19 min · 10 segments
A bank valuation can make or break your finance approval, and when it comes in below your purchase price, it can throw your whole plan into chaos. In this episode of The Buy-In, Trent Cripps…
Trent CrippsHost
Today we're covering off one of the parts in the process of buying or purchasing a property.
Yeah, I mean, it's an important part of the process there because the lender is obviously lending against and taking that property as security.
So they really want to try and understand what its value is, you know, to make sure that they've got their risk, you know, calculated correctly.
And one thing we always hear pop up is what's the LVR, which is exactly how much you're borrowing against what the security values were.
You know, and if we go back many years, probably like pre-GFC, it was predominantly always a valuer would come onto the property and stuff like that and do an inspection and would do like what's called a short form report on the property, which is usually about, you know, five or six pages long, very straight to the point, you know, and within that some comparable sales of what's happening on the market to determine what that value of the property is.
And has there been any changes in the valuation process over the last few years?
So really post GFC, you know, I know that was quite a long time ago now sort of thing, but that was from what I could see was really the catalyst of seeing that change from always needing that short form resi-val on most occasions for most loan applications to lenders being a lot more comfortable swaying out to other alternative means.
So um for example at the moment you've got uh sometimes depending on the the application and the security and stuff like that they'll just be willing to lend against the contract of sale as that's the the security value and they're happy to do that sort of thing obviously they'll do a few checks um inside their own systems and metrics and stuff like to to see that that is the that purchase price isn't an anomaly and it's within the ranges that they're seeing as well and they'll just move on from their sort of thing and And then you've got another one, which is called an AVM, which is a computer modeling, which is done to then again, probably a step up from the contract of sale, but a little bit more pronounced.
It does spit out a report saying if that it does agree with what the contract price is as well.
The next one from that is a desktop, which is someone internally doing evaluation without sort of visiting the property, I suppose, is the way of sorting it sort of thing.
So you can see how it's sort of stepping up its assessment as it goes through sort of thing.
Today we're covering off one of the parts in the process of buying or purchasing a property.
Yeah, I mean, it's an important part of the process there because the lender is obviously lending against and taking that property as security.
So they really want to try and understand what its value is, you know, to make sure that they've got their risk, you know, calculated correctly.
And one thing we always hear pop up is what's the LVR, which is exactly how much you're borrowing against what the security values were.
You know, and if we go back many years, probably like pre-GFC, it was predominantly always a valuer would come onto the property and stuff like that and do an inspection and would do like what's called a short form report on the property, which is usually about, you know, five or six pages long, very straight to the point, you know, and within that some comparable sales of what's happening on the market to determine what that value of the property is.
And has there been any changes in the valuation process over the last few years?
So really post GFC, you know, I know that was quite a long time ago now sort of thing, but that was from what I could see was really the catalyst of seeing that change from always needing that short form resi-val on most occasions for most loan applications to lenders being a lot more comfortable swaying out to other alternative means.
So um for example at the moment you've got uh sometimes depending on the the application and the security and stuff like that they'll just be willing to lend against the contract of sale as that's the the security value and they're happy to do that sort of thing obviously they'll do a few checks um inside their own systems and metrics and stuff like to to see that that is the that purchase price isn't an anomaly and it's within the ranges that they're seeing as well and they'll just move on from their sort of thing and And then you've got another one, which is called an AVM, which is a computer modeling, which is done to then again, probably a step up from the contract of sale, but a little bit more pronounced.
It does spit out a report saying if that it does agree with what the contract price is as well.
The next one from that is a desktop, which is someone internally doing evaluation without sort of visiting the property, I suppose, is the way of sorting it sort of thing.
So you can see how it's sort of stepping up its assessment as it goes through sort of thing.
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