Also called: Valuation report, Market valuation
Valuation
A valuation is an assessment of an asset's market value, prepared for a lender by a qualified valuer or, for smaller assets, derived from industry guides and inspection. Lenders lend against the valuation figure, not the price you paid.
What is a valuation?
A valuation is an assessment of an asset's market value, prepared for a lender by a qualified valuer or, for smaller assets, derived from industry guides and inspection. Lenders lend against the valuation figure, not the price you paid.
Example
A property under contract at $1,100,000 valued at $1,040,000 reduces a 70% LVR advance from $770,000 to $728,000.
Why it matters
A valuation below contract price is one of the most common causes of a shortfall at settlement.