What to Do If the Valuation Comes in Too Low

 
 

You’ve signed the contract and applied for finance — but then the bank’s valuation comes in lower than expected. Now there’s a shortfall and settlement is approaching. What can you do?

This is a growing issue in Victoria’s cooling or inconsistent property market. Here’s how to respond and protect your deposit.

Why the Valuation Matters Your lender bases the loan amount on the bank’s valuation — not the contract price. If the valuer says the property is worth less, your loan may be reduced.

Example:

  • Contract Price: $750,000

  • Bank Valuation: $700,000

  • 80% LVR = Loan reduced from $600,000 to $560,000

You now need to contribute an extra $40,000 to complete the purchase.

Immediate Steps to Take

  1. Request a Reassessment

    • Ask your lender to review the valuation.

    • Provide comparable recent sales or agent evidence.

  2. Try Another Lender (Carefully)

    • Some banks use different panels.

    • Switching lenders takes time — request a settlement extension first.

  3. Find the Shortfall

    • Personal savings

    • Family loan or gift

    • Sell or redraw from other assets

  4. Negotiate with the Vendor (rare)

    • In rare cases, the vendor may reduce the price if you're ready to walk — but only before finance becomes unconditional.

  5. Rescind Under the Finance Clause

    • Only possible if the clause is still active and you notify properly.

    • Timing is critical — speak to your conveyancer immediately.

How to Avoid This Problem

  • Never waive the finance clause unless finance is fully approved

  • Don’t rely on pre-approval — it’s not binding

  • Avoid emotional bidding well above market value

  • Read our guide: What Happens If the Bank Lowers Your Valuation Just Before Settlement

Our Advice At Victorian Property Settlements, we:

  • Review your contract for proper finance protection

  • Help you navigate lender delays and valuation appeals

  • Negotiate extensions and liaise with agents or vendors

If you’re in this situation, contact us immediately — time is everything.

Click here to request urgent advice if the bank’s valuation has come in low.

Victorian Property Settlements – Trusted for over 25 years by Victorian buyers and sellers. Visit: www.victorianpropertysettlements.com.au