Fabulous news, you’ve found the new home you want and put your offer in. Of course you’ve included a suitable ‘subject to suitable finance’ clause as well. Even better news the seller has accepted it. Happy days!
The next step is to get it valued for the bank. You pay your $700-$900 for the valuation and it comes back at the value you’ve offered. Congratulations, this is as it should be, so let’s start packing for the move in date.
What happens however if the valuation comes in short. In other words, the valuation is for less than what your offer is. You will have to pay the difference yourself and that could be anything from a few hundred dollars, through to thousands. In the hot property market that we have now, this is normal because prices are increasing weekly.
However, what if the valuation comes back for more than what you’ve offered. Do you get extra money back from the Bank? I think you know the answer to that and it’s NO. It does mean that the Bank is confident in giving you, your loan. We are seeing this happening mostly for new builds.
Valuations are normally based on the sale price of similar properties sold in the same area.