What happens if a Registered Valuation Report isn’t high enough?
A Registered Valuer’s Report can be a critical factor in securing your mortgage—particularly if you're borrowing more than 80% of the property's value. Whether you’re building, buying privately, or heading into an auction, the report is often the figure your bank will use to determine how much they’re prepared to lend.
But what if the report doesn’t come in where you need it to be? Here’s how to navigate a low valuation and what it means for your purchasing power.
What Is a Registered Valuer’s Report?
A Registered Valuer’s Report is a formal assessment of a property’s market value, carried out by a certified professional valuer. Unlike automated desktop valuations, which estimate value using recent local sales and data modelling, a Registered Valuer inspects the property in person. They consider details like layout, condition, landscaping, recent improvements, and overall presentation.
Banks use this report to assess the true market value of the property and to calculate your Loan-to-Value Ratio (LVR).
How Do You Order a Registered Valuer’s Report?
Since 2015, Registered Valuer’s Reports must be ordered through specific platforms approved by the banks. These systems are designed to ensure that valuers remain independent and are not influenced by buyers, sellers, or agents.
Your mortgage adviser or bank can arrange this for you. The system sends your request out to local valuers for quotes, and once you accept a quote, the valuer is assigned. You won’t know who the valuer is in advance, and any reference to your purchase price is stripped out before they receive the order.
What Happens If the Valuation Is Lower Than Expected?
This is where things can get tricky—particularly if you’re relying on a high LVR (borrowing more than 80%).
Let’s say you're bidding at an auction and your Registered Valuer’s Report comes in lower than the auction price. The bank will use the report, not the auction result, to calculate how much it will lend. If the value is lower, you’ll need to make up the difference yourself.
For example, if you’re pre-approved to buy up to $500,000 with a 10% deposit ($50,000), and the valuation comes in at $450,000, the bank will only lend you 90% of $450,000—that’s $405,000. With your $50,000 deposit, your maximum bid should be $455,000. If you bid $500,000, you’ll need to find an extra $45,000 from your own savings or another source.
Isn’t the Auction Price the Market Value?
While an auction may reflect what someone is willing to pay on the day, it doesn't always represent long-term market value. Auctions are fast, emotional, and sometimes competitive beyond reason. For this reason, banks use the Registered Valuer’s Report as a more objective measure—especially when you’re borrowing with a small deposit.
Buying via Tender or Private Sale
If you’re not buying at auction, you usually have more room to move. Offers can include a finance condition or a specific clause that makes the purchase subject to a Registered Valuer’s Report.
If the report comes in lower than your offer, you can:
Renegotiate the price with the vendor
Walk away using your valuation or finance clause
Appeal the valuation by providing comparable sales evidence
Let’s say you offer $500,000, but the Registered Valuer reports a market value of $450,000. The bank will treat the property as worth $450,000. You may be able to renegotiate the sale price based on that figure or choose not to proceed.
Can You Use a Valuation Provided by the Vendor?
Sometimes a vendor will provide a valuation they’ve commissioned themselves, especially if they've recently renovated. While this can be helpful context, the bank will not accept it for lending purposes. It hasn’t been ordered through an independent system and may be subject to bias.
To be used in your mortgage application, the Registered Valuer’s Report must be commissioned through an approved ordering process to ensure impartiality.
Why the Valuation Matters So Much
Banks rely on the Registered Valuer’s Report to determine the market value of the security (the property). They will lend a percentage of that value—not your purchase price. If you’ve agreed to pay more than what the report states, you’ll need to cover the difference yourself.
This is where understanding your pre-approval is crucial. You may be pre-approved to borrow 90% of a $500,000 property—but only if the bank agrees that the property is worth $500,000.
How to Protect Yourself
Order early: If you’re planning to buy at auction, get your Registered Valuer’s Report in advance.
Talk to your mortgage adviser: They’ll help you assess when and whether you’ll need a full valuation.
Use conditions wisely: If you’re making a conditional offer, include a valuation clause or finance condition.
Stick to your limits: Know your deposit, your borrowing limits, and your exposure if the valuation falls short.
A Registered Valuer’s Report that comes in lower than expected doesn’t have to ruin your home-buying plans—but it does require you to reassess your budget or your offer. With careful planning and the right support, you can navigate these situations confidently and continue toward homeownership.
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