Bank valuation is not just a formality, it directly determines how much the bank will lend against the property and if the valuation comes in below the agreed purchase price, the buyer faces a shortfall they must cover from their own funds.
READ: How to prepare for a bank valuation: Why being present changes everything
According to Morné Prinsloo, local agent for REMAX Town and Country Roodepoort and Krugersdorp, says many buyers cannot do that (cover the shortfall), and the deal collapses. "Preventing that outcome where possible is part of my job," he says.
Prinsloo says this is one of the more stressful moments in a property sale, and "I want to walk you through exactly what happens and why".
"When your buyer applies for a home loan, the bank does not simply take your agreed purchase price at face value. It sends out an independent, registered valuer to assess the property and confirm what it is worth in the bank's eyes. This is a different exercise from a market valuation.
