Valuing a Home.
A property valuation is one of the most important — and least understood — parts of the home loan process. Whether you’re buying, refinancing, or accessing equity, the bank’s valuation often determines how much you can borrow, what interest rate you qualify for, and whether the deal works at all.
Many borrowers assume valuations are automatic or fixed. In reality, valuations vary by lender, by method, and by timing. Managed well, they support your outcome. Managed poorly, they can delay approvals, reduce borrowing capacity, or derail a transaction entirely.
This is an area where broker experience adds real, practical value.
What a bank valuation actually is (and what it isn’t)
A bank valuation is not a market appraisal and it’s not a selling price estimate. It’s a risk assessment tool used by lenders to determine how much they’re prepared to lend against a property.
Valuers are instructed by banks to be conservative. Their role is not to maximise value — it’s to protect the lender if the property ever needs to be sold under pressure.
Because of this, the valuation figure:
May differ from the purchase price
May differ from an agent’s appraisal
May differ between lenders for the same property
Understanding this upfront avoids frustration and unrealistic expectations.
When valuations are required
Valuations are commonly required when:
Buying a property (even with pre-approval)
Refinancing to a new lender
Requesting a rate review or pricing discount
Accessing equity
Restructuring loans
In most cases, the lender orders the valuation directly through their panel. As brokers, we coordinate this process and manage timing carefully.
Types of home valuations lenders use
Different lenders use different valuation methods depending on the property, the loan amount, and perceived risk.
Desktop valuation
This is an automated valuation based on data, recent comparable sales, and algorithms.
Pros:
Fast
No inspection required
Often free
Cons:
Can be conservative
Less accurate for unique homes, renovations, or thin markets
Not always available
Desktop valuations are common for straightforward properties in established areas, particularly at lower LVRs.
Kerbside valuation
A valuer inspects the property externally and assesses value based on condition, location, and comparable sales.
Pros:
More accurate than desktop
Still relatively quick
Cons:
No internal inspection
Renovations or internal improvements may not be fully reflected
Kerbside valuations are often used when a lender wants more confidence than a desktop valuation provides but doesn’t require full access.
Full internal inspection
The valuer inspects the property inside and out.
Pros:
Most detailed
Best reflects renovations and condition
Cons:
Takes longer
Requires access and coordination
Full valuations are common for higher loan amounts, unique properties, recent renovations, or higher-risk scenarios.
Why valuation outcomes differ between lenders
One of the biggest misconceptions is that a property has “one true value”. In reality:
Each lender has different risk tolerances
Each lender uses different valuation panels
Each lender may choose a different valuation method
As brokers, we understand:
Which lenders are more conservative
Which lenders are more supportive for certain property types
Which lenders are more flexible around valuation methods
This knowledge allows us to choose lender pathways strategically.
Can brokers influence valuations?
We can’t control a valuation — but we can influence the process and context.
We add value by:
Selecting lenders whose valuation approach suits your property
Ordering valuations at the right time
Providing relevant information (renovations, improvements, recent comparable sales)
Avoiding lenders whose policy or valuation approach is known to be restrictive for your scenario
The goal isn’t to “push” a value — it’s to ensure the valuation is fair, accurate, and delivered on time.
Valuations and borrowing power
Valuations directly impact:
Your loan-to-value ratio (LVR)
Whether lender’s mortgage insurance applies
Access to better interest rate tiers
How much equity can be released
A small difference in valuation can materially change the outcome. For example:
Dropping below an 80% LVR can eliminate LMI
Lower LVRs often unlock better pricing
Equity access depends entirely on valuation support
This is why valuations should never be treated as an afterthought.
Common valuation issues (and how they’re handled)
Some common scenarios include:
Valuation comes in below purchase price
This can affect:
Deposit required
Borrowing capacity
Whether the deal still works
Depending on the situation, options may include:
Assessing another lender
Reviewing the valuation evidence
Renegotiating price (where appropriate)
Adjusting structure
Valuation delays threaten settlement
Valuation delays are a major cause of settlement pressure.
We manage this by:
Ordering early where possible
Choosing lenders with reliable turnaround times
Tracking valuation progress proactively
Renovations not fully recognised
If improvements haven’t been reflected, we ensure relevant information is provided upfront and choose valuation methods that are more likely to capture the true condition.
Valuations when refinancing or accessing equity
When refinancing or releasing equity, the valuation becomes the foundation of the entire strategy.
We assess:
Whether an updated valuation is likely to help
Which lenders are most supportive
Whether a full inspection or desktop valuation is preferable
Sometimes staying with the existing lender and requesting a valuation or repricing makes more sense than switching. A proper review considers all options.
The Lumo approach to home valuations
We treat valuations as a critical project step, not a formality.
Our approach includes:
Strategic lender selection
Early valuation ordering
Clear communication around timeframes
Proactive management if issues arise
Handled well, valuations support approvals and unlock better outcomes. Handled poorly, they create stress and delays.