How to dispute or challenge a low bank valuation

You can dispute a low bank valuation, but it is worth being realistic: direct challenges succeed only a small share of the time, because valuers rarely change a figure without compelling new evidence. The most effective approach is to understand why the valuation came in low, put together strong comparable sales evidence, and submit it through your broker or lender. If that does not work, an independent valuation or a different lender is often the better route.

Can you dispute a bank valuation?

Yes, lenders have a process to review a valuation, and you are entitled to ask for it to be reconsidered. But go in with clear expectations. Industry experience is that only a small percentage of disputes actually change the figure, because a valuer will generally only revise their opinion if you give them credible evidence they did not already have.

That does not make it pointless. A well-evidenced challenge sometimes works, and even when it does not, the process points you towards the alternatives that will, such as a second opinion or a different lender.

Why bank valuations come in low

A bank valuation is deliberately conservative. The lender is protecting itself against the risk of having to sell the property, so it leans towards a cautious, defensible figure rather than an optimistic one. Our guide to a valuation versus a bank valuation explains that difference in full.

Beyond caution, the usual reason a valuation is low is that the valuer could not find recent comparable sales that support a higher figure. A soft or falling market, a shortage of similar recent sales, or an unusual property can all pull the number down. Off-the-plan purchases are especially prone to this, where the valuation at settlement comes in below the contract price, which our guide to an off-the-plan valuation shortfall covers.

Step 1: Understand why it came in low

Before you argue, find out what you are arguing against. Ask your broker or lender for the reasons behind the valuation, and a copy of the report if you can get one. Knowing which comparable sales the valuer used, and any concerns they raised about the property, tells you exactly where your evidence needs to focus.

Step 2: Gather comparable sales evidence

Evidence is what moves a valuation, and comparable sales are the strongest evidence you have. Aim for at least three recent sales, ideally within the last six months, of genuinely similar properties: matching them as closely as you can on location, land size, number of bedrooms and bathrooms, condition and style.

Pull the sales from reliable sources and note the address, sale price and date for each. Be honest in your comparisons. Presenting superior properties as equivalents will not persuade a valuer, and weak comparables undermine your case. If you have made recent improvements the valuer may not have accounted for, document those too, with costs and dates.

Step 3: Submit the evidence through your broker or lender

You generally cannot approach the valuer directly. Submit your comparable sales and any supporting documents through your mortgage broker or the lender, who passes them to the valuer for review. Keep it factual and specific: this sale, this date, this price, and why it is comparable to your property.

If the valuer accepts that your evidence changes the picture, the figure may be revised. If they do not, that is where the direct dispute usually ends, and it is time to look at your other options.

If the challenge fails: your other options

A low valuation is not the end of the road, even if the dispute itself does not succeed. Depending on your situation, you can:

• Get an independent valuation. A separate valuation from a registered valuer gives you a documented second opinion and a clearer picture of true market value, which can support negotiation or a different lender.
• Try a different lender. Banks use different valuers and panels, and the same property can be valued quite differently between them. Refinancing or applying elsewhere may produce a higher figure. Be mindful that multiple applications in a short time can affect your credit file.
• Renegotiate the price. If you are buying and your contract has a finance clause, you may be able to negotiate the price down towards the valuation.
• Cover the gap. If the shortfall is small, adding to your deposit to bring the loan-to-value ratio back into range may be simpler than fighting the figure.

You can estimate the loan-to-value ratio impact with our LVR calculator.

How an independent valuation helps

If you believe the bank's figure is genuinely wrong, an independent valuation from a registered valuer is the most constructive step. It is not the bank's valuation, so it will not directly replace it, but it gives you an evidence-based market value you can use to decide whether to push back, switch lenders or renegotiate, rather than relying on a gut feeling.

Valato prepares independent, evidence-based valuation reports across Australia. You can compare the options or order in a couple of minutes.

How to avoid a low valuation next time

Prevention beats disputing. Where you can, get an upfront valuation before you commit or apply, so you know the likely figure in advance. Prepare the property so the valuer sees it at its best, and have your comparable sales and any improvement records ready to hand to support the value from the start.

Frequently asked questions

General information only: This article is general in nature and does not take into account your individual circumstances. It should not be relied on as financial, tax or legal advice. Speak with a qualified professional, such as your mortgage broker or adviser, before making decisions about your loan or property.