Aaron Whybrow explains why banks value the same property differently: most use randomized panels of third-party valuers, not in-house teams, so subjective judgment and different comparable properties produce different estimates. If you get a low valuation, you can request a review or get a second opinion from another lender.
Have you ever heard of one bank valuing your property higher than another bank? Hey, it's Aaron from Diagnostics and Finance. And bank valuations are a hot topic, especially in some pockets of my local area and in the broader community of Australia. Banks don't do valuations themselves. There is one or two exceptions to that. There are, there are some banks that will do their own valuations under their own brand, but in general, most of the banks will use a panel set of valuers that are third party to the banks and most banks will randomize those valuers and the randomization of those valuers will determine what the outcome is. So we might have valuer one and at bank A and valuer one at Bank B. So they might be the same valuer or we might have valuer 2 at bank 1 and valuer 1 at bank B. So what will happen then is there's two different companies going out to value the property and in some cases that is a required task and in some cases it's a required task to talk to some of the lenders that allow us to choose the right valuer, the for the right set of circumstances depending on their credit policy. So if you've ever heard of one bank valuing a property over another at a higher rate at a different value, it's not necessarily your property that's wrong, it's not necessarily the value that's wrong. It comes down to a subjective opinion, it comes down to what the comparisons might be made about what your estimated value is through to what the market is providing feedback to or the research that the value goes on. Now, if you do get the wrong valuation, which is most of the time of where the questions come in, there are procedures in place to be able to request a review of the valuation, or the most common one is to look for a different bank to get a different valuation with a different valuation in firm. Now that probably seems controversial, but if you have a goal, a need or a financial stressful situation you're in and that's the valuation holding you back, you do need to think about this to look like you would do when you go to a doctor. You need a second opinion and that's not uncommon in the market. Even if it costs you a little bit of money to do the extra valuation. Hey, it's Aaron from Diagnostics and Finance. Have a great day.
