Quick answer
You can't choose the valuer or negotiate the number, but you can make sure the valuer has everything needed to value the property fairly. Gather the title details, rates notices, lease schedule and outgoings, evidence of improvements, and a plain summary of the property's use. Give clear access, tidy the site, and correct any factual errors in the draft report before the lender relies on it.
Key points
- The lender instructs the valuer, so your job is to supply facts, not to steer the figure
- Income-producing property is valued on its leases, so a complete lease schedule matters more than paint
- Evidence of improvements, approvals and recent spending is worth more than a verbal description
- A tidy, accessible site and a known contact on the day avoid avoidable discounts
- Factual errors in a valuation report can be raised; disagreement over opinion is much harder to win
A valuation is the one part of a secured loan you can’t negotiate. The lender orders it, the valuer forms an independent opinion and the loan amount is calculated from that number. It can feel like a verdict delivered by someone you’ve never met.
You can’t change the opinion, but you can change what it’s based on. Valuers work from the facts in front of them, and owners who hand over a tidy, complete set of facts tend to see a fairer outcome than owners who leave the valuer to dig. This guide covers who does what, what to gather, what to do with the property itself, and what to do if the figure is wrong.
If you want the mechanics of how a valuation turns into a loan amount, read how valuations work for business loans first, then come back here for the preparation.
Who orders the valuation, and what are they trying to find out?
The lender does, from its panel of approved valuers, and the report is written for the lender. You usually pay. The valuer’s task is narrower than most owners assume: to estimate what the property would realistically sell for, in an orderly sale, if the lender ever had to sell it.
That framing explains a lot:
- The valuer isn’t pricing your hard work or the sentimental value of the building.
- A valuer is cautious about assumptions they can’t verify, so missing paperwork tends to push the figure down, not up.
- The lender applies its loan-to-value limit to the lower of the valuation and the price paid, which is why the figure carries so much weight. Our guide on LVR explains the arithmetic.
What type of valuation will it be?
Lenders choose the depth of valuation to match the risk.
| Type | What it involves | Typical use |
|---|---|---|
| Desktop | Data and records, no visit | Lower-risk, standard properties, smaller loans |
| Kerbside | External inspection from the street | Standard residential or simple commercial |
| Full | Internal and external inspection, measurements, review of leases and approvals | Commercial, industrial, rural, larger or specialised property |
For a business loan secured on a shop, warehouse, farm or office, expect a full valuation. Specialised property such as a medical centre or a petrol station may involve a valuer with specific experience. How the figure is built is covered in how lenders value commercial property.
What should you gather before the valuer arrives?
Think of it as a folder you could hand over in five minutes. For most properties it contains:
Identity and legal
- Title details or a recent title search
- Any easements, covenants or caveats already on the title
- Zoning and planning information, and any permits for current use
Rates and outgoings
- Latest council and water rates notices
- Land tax assessment if it applies
- Building insurance certificate
- An outgoings statement showing what the owner pays and what is recovered from tenants
Income (if tenanted)
- Signed leases with variations and options
- A lease schedule: tenant, area, start date, term, options, current rent, review basis, who pays outgoings, any incentives or rent-free periods
- Rent reviews and arrears, if any
Physical
- Building approvals, occupancy certificates and plans
- Invoices for recent capital works: roof, air conditioning, fire safety, car park, fit-out
- Any building defect or compliance reports
- Any environmental reports, where relevant
Context
- A one-page summary: how the property is used, why, and anything unusual (a shared driveway, a rooftop lease, a billboard)
A lease schedule is the item owners most often skip. For a tenanted property, the valuer’s income approach turns on net rent, lease terms and outgoings, and anything vacant is treated differently from anything leased. If your schedule is incomplete, the valuer may only be able to rely on what they can confirm.
How should the property itself be presented?
You are not staging a house for sale, and valuers are experienced at looking past clutter. But some basics help.
- Make access easy. Confirm a time, give the valuer a named contact, unlock plant rooms, roof hatches and storerooms. If they can’t see it, they can’t count it.
- Clear the obvious. Remove rubbish, clear access to switchboards and fire equipment, and make sure signage and car parking are visible.
- Fix the cheap, visible faults. A leaking roof, failed lighting or a broken door tells a story the valuer will price in. A few hundred dollars now can avoid a larger deduction.
- Don’t hide defects. A problem you’ve pointed out and explained is easier to price fairly than one the valuer stumbles on.
- Tell them what’s improved. Show the new roof or the upgraded power supply on the invoices, and note the date.
- Keep operations running if the property is operating, but give the valuer room to measure.
For rural and vacant land, a few other items matter: water entitlements, fencing, access and any limits on use. See using rural property as loan security and using vacant land as loan security.
Wondering what the property could support before you commission anything? You can send us the basics and we’ll tell you what looks realistic.
Should you spend money on improvements first?
Be selective. A valuer values the property as it is on the day, taking into account its condition. Spend that removes a defect, secures compliance or restores function often protects value. Spend that merely modernises taste rarely returns the cost.
A useful test: would a buyer be put off, or ask for a price cut, if they saw this? If yes, fixing it is probably worthwhile. If it’s a personal preference, probably not.
Also resist rushing large works before an application. Work in progress can complicate a valuation, and an unfinished job may be valued “as is” rather than “as complete”. If you are borrowing to carry out works, ask the lender whether the valuation will be on an “as is” and “as if complete” basis. Construction and development finance is assessed in that way.
What happens when the report comes back?
Ask for a copy. Lenders don’t always send it unprompted, and the report is where the assumptions live. Read it for facts, not opinions:
- Is the land and floor area correct?
- Are the tenancies, rents and lease terms right?
- Are the zoning and permitted use correct?
- Are the comparable sales genuinely comparable, with similar size, location, use and date?
- Does it describe any improvements or defects incorrectly?
If you find a factual error, write to the lender (or the broker) with evidence and ask for the valuer to review it. That is a legitimate request and valuers do correct mistakes. Disagreeing with an opinion is harder: “I think it’s worth more” isn’t evidence. Recent sales of similar property nearby, with details, is.
If the figure stands lower than hoped, the loan is resized from it. Options include adding a deposit or additional security, reducing the loan amount, or approaching a different lender who may use a different valuer. The LVR calculator and property equity calculator help you see the effect before you commit.
Illustrative example
Picture two owners of near-identical small industrial buildings, each with two tenants and each hoping to borrow around $600k.
The first hands over one lease, mentions a handshake arrangement with the second tenant and has no outgoings statement. The valuer can only rely on what’s confirmed, so the second tenancy is treated cautiously.
The second supplies both signed leases, a one-page rent schedule, rates notices, the invoice for a new roof and a fire-safety certificate. The valuer’s method is identical, yet the starting assumptions are firmer because the facts are on paper. The difference isn’t inflation; it’s proof.
What are the most common mistakes?
- Treating it as a negotiation. The valuer is independent. Facts help; pressure doesn’t.
- Missing or out-of-date leases. Informal tenancies are harder to rely on.
- Not telling the valuer about works or approvals.
- Assuming a sale price elsewhere sets the number. Comparable sales need to be similar.
- Skipping the fee question. Ask who pays and when.
- Booking a large cosmetic job right before. It rarely returns the cost.
Ready to find out what your property can support?
If you’re thinking about borrowing against property, you don’t need a valuation to start the conversation. Share the property type, location, current loans and what you need the money for, and we can say which options look realistic before anyone orders a valuer. The form takes about a minute, and filling it in is not a credit check. We keep your enquiry with our team rather than sending it round the market, and a person reads it and calls you. The more accurate the details, especially tenancies and existing debt, the closer our first suggestion will be.
Frequently asked questions
Can I choose my own valuer for a business loan?
Usually not. Lenders typically instruct a valuer from their own approved panel, because the valuation is prepared for the lender's reliance. You often pay the fee, but the valuer's client is the lender. A valuation you commission yourself may be useful for your own planning, but the lender may not accept it.
What documents should I give the valuer?
Title or property details, the latest council and water rates notices, any lease agreements with a current rent schedule, an outgoings statement, building approvals and plans for improvements, recent capital works invoices, and details of any zoning or planning issues. If you operate the business from the property, include trading summaries if the lender has asked for them.
Will fixing up the property raise the valuation?
Sometimes, but not always by what you spend. Repairs that remove obvious defects, clean access and clear maintenance backlogs tend to help. Cosmetic spend rarely adds its full cost. Before spending money, ask the lender or valuer's contact what they expect to see, and prefer fixes that address safety or compliance.
What is the difference between a desktop, kerbside and full valuation?
A desktop valuation uses data without visiting the property, a kerbside valuation involves an external look from the street, and a full valuation includes an inspection inside and out. The lender chooses based on the loan size, the property type and the risk. Larger or specialised commercial properties generally get a full inspection.
What if the valuation comes in lower than I expected?
Ask for a copy of the report and read it for factual errors: floor area, tenancies, zoning, rent figures or sales used as comparables. If you find errors, supply evidence and ask the lender to request a review. If the figure stands, the loan is sized from it, so you may need a larger deposit, extra security or a different lender.
Who pays for the valuation?
Normally the borrower, whether or not the loan goes ahead. Some lenders ask for the fee upfront and others deduct it at settlement. Ask before you apply, so a valuation fee on a loan that doesn't proceed isn't a surprise.