Key points
- A valuation shortfall happens when the bank values the property below the contract price.
- Options can include contributing more funds, trying other lenders, negotiating, or selling.
- Acting early gives you more options than waiting until the settlement date.
What is a valuation shortfall?
When you approach settlement on an off-the-plan purchase, your lender will usually value the property. If the valuation comes in below the contract price, the lender may lend less than you expected, leaving a gap you need to cover. This is commonly called a valuation shortfall.
Common options
- Contribute additional funds to cover the gap
- Speak to a mortgage broker about other lenders or loan structures
- Ask for a review of the valuation with supporting sales evidence
- Talk to the developer about timing or other arrangements
- Sell or nominate a buyer before settlement, if your contract allows
Why acting early matters
The closer you get to settlement, the fewer options you have. If you think a shortfall is possible, talk to your broker, solicitor or conveyancer and an agent early, so you have time to compare your choices.
How we can help
If selling is the right option for you, our agents can assess current buyer demand, explain the nomination process, and present your property to investors and other buyers in Australia and overseas.
General information only, not financial or legal advice. Speak to a licensed professional about your situation.
This guide is general information only and doesn't consider your circumstances. It is not legal, tax or financial advice.