December 4, 2022

Is your home worth more than the bank says? It’s a question that many homeowners in Australia are asking as they see their property’s market value continue to rise. While it’s tempting to believe that your home is worth more than the bank valuation, it’s important to remember that several factors go into determining a property’s value. In this post, we’ll take a closer look at why bank valuations can often be conservative as compared to market value.

What Is Market Value?

When trying to determine the market value of a property, there are a few things you need to take into account. Firstly, you need to look at recent property valuations in the area. This will give you an indication of what similar properties are selling for. Secondly, you need to consider the current state of the property market. If there is high demand for property in the area, this will likely increase the market value of your property.

Finally, you need to think about any personal circumstances that may affect the value of your property. By taking all of these factors into account, you should be able to arrive at a realistic estimate of your property’s market value.

What Is Bank Valuation?

A bank valuation is an objective assessment of a property’s value. It is typically required by banks when mortgage applications are being processed. The valuation report will be used by the bank to determine the amount of money they are willing to lend to the borrower. The report is carried out by a professional valuer and takes into account a number of factors, including the property’s location, age, condition, and recent sales data.

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The valuation will also take into account any improvements that have been made to the property since it was last valued. By law, banks are required to obtain a bank valuation before approving a mortgage application. This ensures that borrowers are not over-borrowing and that the bank is lending against a property with a genuine market value.

Bank Valuation Vs Market Value: What Is The Difference?

Bank valuation and market value are two important concepts that are often used interchangeably, but there is a big difference between the two. Bank valuation is the value that a bank is willing to lend on a property. Market value is the price that a buyer is willing to pay for a property. There are a number of factors that can affect bank valuations Vs market value, including location, condition of the property, and the current market conditions.

In general, bank valuations will be lower than market value, because banks are typically more conservative when lending money. However, there are some situations where bank valuations can be higher than market value, such as in a hot housing market where demand is high and properties are selling quickly. It’s important to understand the difference between bank valuations and market value so you can make sure you’re getting the best deal when buying or selling a property.


Since A Market Valuation Assumes The Seller Wants The Best Price Possible, It Is Higher Than Bank Valuation

When trying to determine the value of a property, both buyers and sellers often turn to professional appraisers for help. However, it’s important to understand that there are different types of appraisals, each with its purpose. A market valuation is typically performed by a real estate agent when helping a seller determine how much to list their property for sale. Since the agent’s goal is to get the best possible price for their client, the market value will usually be higher than a bank valuation.

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A bank valuation is typically requested by a buyer who is looking to get a mortgage. The bank wants to be sure they are not lending more money than the property is worth, so the valuation will usually be lower than the market value. As a result, it’s important to understand the type of appraisal being used when trying to determine the value of a property.

Market Valuation Takes Property Market Into Account Which Could Be Higher Than Bank Valuation

A property valuation is an estimate of the current market value of a property. It is based on a number of factors, including the property’s location, size, condition, and recent sale prices of similar properties. A property valuation is typically carried out by a qualified valuer. A bank valuation is an estimate of the value of a property used to secure a loan. It is based on the property’s purchase price, current market value and the lender’s assessment of the borrower’s ability to repay the loan.

A bank valuation may be higher or lower than a property valuation. If it is higher, the property can be used as security for a larger loan. If it is lower, the borrower may need to provide additional security to obtain the loan.

Market Valuation Helps You Determine The Price At Which To Acquire Or Sell A Property Through Comparison

Mortgage brokers compare the market value of a property with the bank’s valuation to determine whether it is undervalued or overvalued. If the market value is higher than the bank’s valuation, it is classed as an overvalued property. This usually happens when there is high demand for properties in an area and buyers are willing to pay more than the banks are valuing the properties at.

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If the market value is lower than the bank’s valuation, it is classed as an undervalued property. This happens when there is a low demand for properties in an area and buyers are not willing to pay as much as the banks are valuing the properties. By knowing whether a property is undervalued or overvalued, mortgage brokers can help their clients to negotiate a better price for the property.


So, what is the difference between a bank valuation and market value? The key difference is that a market valuation assumes the seller wants the best price possible, whereas a bank valuation takes into account the fact that banks are more likely to offer a lower price in order to get a good return on their investment. This means that, in most cases, market value will be higher than bank valuation. If you’re looking to acquire or sell property, it’s important to understand how these two values differ so you can make an informed decision about which route to take. Thanks for reading!