Summary
A lender valuation is for the lender’s security, not a full buyer survey. Down valuation risk appears when the lender’s valuation is below the agreed purchase price, creating a potential funding gap.
Definition
A lender valuation is the valuation used by a mortgage lender to decide whether the property is suitable security for the loan. It is usually not the same as a full building survey and the lender is normally the valuer’s client. In buyer language, a down valuation happens when the mortgage valuation comes in below the agreed purchase price. That does not automatically prove the property is worth less to every buyer, but it can reduce the amount the lender is willing to advance and leave the buyer needing a larger deposit, a renegotiated price, a different lender or a decision to walk away. The best protection is to build an evidence based offer range before bidding and avoid stretching beyond defensible comparable evidence.