Valuation Came In Under the Contract Price? What Happens Next
Valuation Shortfall
Buyers and directors · Valuation under the price · Careful guidance
The bank valued the property below the price you agreed, the approved loan dropped with it, and the settlement date has not moved. This guide covers how much time you actually have, what the shortfall really costs, whether you can renegotiate, how buyers fund the gap, how to check who you are borrowing from, and when funding it is the wrong answer.
Quick Answer
A low valuation does not create a cash gap equal to the valuation difference. The lender recalculates its maximum loan against the value it accepts, so calculate the actual loan reduction first, confirm whether your contract still gives you an exit, and run every option in parallel.
| Your question | Short answer |
|---|---|
| Does the loan fall by the same amount as the valuation? | No. The lender applies its advance ratio to the value it accepts, so the loan reduction is usually smaller than the valuation difference. Calculate the actual reduction before anything else, because it is the number that sets what you must find. |
| Why did my loan amount drop? | Lenders advance against the lower of the contract price and their own valuation, so a valuation under the price reduces the approved loan by the difference. |
| Am I still obliged to settle? | If the contract is unconditional, yes. A valuation is not a contractual excuse. If a finance clause is still alive and properly exercised, that is a different position entirely. |
| How much time do I have? | Whatever your contract gives you, not what a lender offers you. Runway decides which options are real, so establish the settlement date in writing before anything else. |
| What if I cannot settle? | Your contract's default machinery applies and it differs by state. Deposit forfeiture is the well known consequence; the deficiency on a resale, and the possibility of being compelled to complete, are the ones most buyers have never heard of. |
| Does my stamp duty go down too? | Generally no. Duty runs on what you agreed to pay, not on the valuation, and in Victoria late settlement interest is itself dutiable, so a delay can increase it. |
| Can I renegotiate the price? | You can always ask. Whether it works turns on the seller's alternatives, not on your valuation, and if you are unconditional you are asking a favour rather than exercising a right. |
| Can I get the valuation changed? | A review can correct factual errors and genuinely unrepresentative comparable sales. It cannot make a valuer adopt your price because you paid it. |
| Can I borrow the difference? | Often yes, through a second mortgage, a caveat-secured loan, private lending, bridging or equity in another property. Consent, priority and a dated exit are the real constraints. |
| Can I use my own company or my super? | A company you control may be able to help, subject to tax advice and strict timing. A self managed super fund cannot lend to you, guarantee the loan, or secure it. |
| How do I know the lender is legitimate? | Check the ASIC professional registers and the AFCA member search before you pay anyone anything, and treat an upfront fee requested before written terms as a stop sign. |
| When is funding it the wrong answer? | When the valuation is right and the price was wrong. Borrowing to settle above market value with no exit makes the problem larger, not smaller. |
What should you do first?
Answer three questions before you speak to a single lender, because each one sends you to a different part of this page and getting them in the wrong order costs a week you may not have.
- Is your contract still conditional on finance, or is it unconditional? A live finance clause changes every option below it, and exercising it badly forfeits it. This is a question for your conveyancer, not a lender.
- Is this a funding gap on a purchase that still stacks up, or a signal that the asset is worth less than you agreed to pay? Those two look identical on the day the valuation lands and lead to opposite advice.
- Are you facing a purchase shortfall or a refinance payout shortfall? They share a name and almost nothing else, and the fix for one is useless for the other.
The reason to be this deliberate is that the searches and AI summaries around this question tend to reach for the same five-item list: find cash, ask family, challenge the valuation, switch lenders, or exit. Each of those is a legitimate move for one of the forks above and a waste of a week for the others. The sequencing matters more than the menu, and the free, independent routes in the section on who to call and in what order are worth reading before any lender conversation, because a conveyancer's read on your contract costs nothing and forecloses nothing.
One boundary before we start. This guide is written for the buyer side of a purchase. If you are a seller whose buyer cannot settle, or you have already been served a formal deadline, the notice to complete guide is the right door. And nothing here is legal, tax or financial advice about your situation, because your contract and your entities are documents this page cannot see.
What is a valuation shortfall?
The real shortfall is the extra money you need because the lender will advance less than you expected, and that is not automatically the difference between the contract price and the valuation. Those two numbers are routinely confused, including in otherwise useful property articles. The mechanic is the same at every mainstream lender: the loan is calculated against the lower of the contract price and the lender's own assessed value, so when the valuation lands under the price, the maximum loan falls by the lender's advance ratio applied to the reduction in value, not by the full reduction itself. Nothing about it changes what you signed. It changes what the bank will lend against what you signed.
Loan reduction: the maximum loan you expected minus the revised maximum loan. This is the number that sets your extra cash requirement.
Total settlement cash: your contribution plus duty, adjustments, fees and any changed insurance or funding costs.
The two numbers can diverge further still. A lower accepted value can push the loan into a different ratio band, make lenders mortgage insurance apply or cost more, change lender policy, or mean the larger overall debt no longer passes the buffered serviceability assessment described later on this page. That is why the first calculation should come from the lender's revised approved amount in writing, not from a rule of thumb, and why the one-line problem statement in the section above starts with it.
Then there is the disambiguation almost nobody publishes, and getting it wrong sends readers down the wrong path for a week. Australians use "settlement shortfall" for two genuinely different problems. The purchase case is the one this guide covers: you are buying, the valuation came in under the contract price, and the approved loan will not reach settlement. The refinance case is different: you are refinancing, and the new loan comes in under the outgoing lender's payout figure, so the existing loan cannot be discharged. If that second description is yours, the options, the timeline and the risks are covered in the piece on a refinance payout shortfall, and the rest of this page will not fit your situation.
One more term, because it turns up in every search result on this topic. A bank valuation is simply the lender's own assessment of the security, ordered by and for the lender, and it is a risk tool rather than an opinion about what the property is worth to you. What that shortfall then costs you, beyond the cash you have to find, is set out in the section on the other costs it moves, and it is more than most buyers expect.
How much time do you have, and what does it change?
Your contract sets the deadline, not the lender, and how much runway is left is the variable that decides which options are real rather than theoretical. Almost every page on this topic gives the same options list to a buyer with a month and a buyer with four days, which is why buyers spend their runway on the option that was never going to finish. Establish the settlement date in writing first, then read the row below that matches it.
| Runway to settlement | What that realistically allows | What to do first |
|---|---|---|
| Three weeks or more | Every route can run at once. A valuation review has room to complete, a lender switch is a real option rather than a gamble, and a full application against another property you already own is realistic here and rarely realistic later. | Get the contract read, request the review with evidence attached, open the renegotiation conversation, and start the funding conversation in the same week rather than after the review has failed. |
| About two weeks | The review and the switch both compress, and at least one of them will probably not finish. Short-dated, property-secured options move from fallback to main plan. Documents become the binding constraint rather than appetite. | Assemble the evidence pack before you make a second phone call. Ask your conveyancer whether the seller would agree in writing to a deferred settlement, because that conversation takes days to have and cannot be had late. |
| Less than a week | Less than most buyers assume. A new full application on another property is unlikely to land. What is left is whatever can be documented and legally executed by the people already engaged on the file. | Legal position first, then one funding conversation with everything already in hand. Ask what a written extension would cost you compared with what a default would cost you. |
| The settlement date has passed | This is a legal question before it is a finance question. Interest, notices and termination rights are already running on the contract's own machinery, and what is available to you is set by that, not by lender appetite. | Your conveyancer or solicitor today. Read what happens once a notice to complete is served before you sign finance documents to solve a problem nobody has priced legally yet. |
One more thing about timing that no page on this topic seems willing to say out loud. This search happens at night. Valuations come back late in the day, settlement dates cluster at the end of the week and the end of the month, and the buyer reading this at ten in the evening cannot call anybody. Every other page's first instruction is to phone a professional who is closed. So here is what is actually available to you tonight, and doing it turns tomorrow into one productive day instead of three days of back-and-forth.
- Find the settlement date in writing, and the finance clause with its date if you have one. Not what you remember. What the document says.
- Read the special conditions, not just the general conditions. Special conditions routinely override the standard positions described later on this page.
- Write the problem in one line: contract price, valuation, approved loan, funds you actually have. Most people have not done this and cannot answer it when asked.
- List every property you or your entities own, what is owed on each, and which lender holds it. This is the question that decides whether option one or option two in the funding section is open to you.
- Find the valuation if you were given a copy, and the incoming lender's approval letter.
- Email your conveyancer tonight with the settlement date in the subject line, so it is at the top of their morning rather than the middle of their afternoon.
Why won't the bank lend against the price you paid?
Because a lender will not lend against a price its own valuer will not support, and the prudential framework it works inside treats high loan-to-value lending as a higher risk of loss. That is the whole answer, and it is worth reading in the regulator's own words because it explains the problem before it happens. APRA's guidance on residential mortgage lending notes that while the regulator has not formally defined high loan-to-value lending, experience shows that ratios above 90 per cent, including a capitalised LMI premium or other fees, "clearly expose an ADI to a higher risk of loss" (Prudential Practice Guide APG 223, June 2025 version, read for this guide in August 2026). A lender that quietly funded the gap by lending against a price its own valuer would not support is moving into exactly the band its regulator has flagged.
On off-the-plan purchases the same guidance is more direct still, and this is the paragraph that explains most of the shortfalls in this guide. In the case of valuation of off-the-plan sales, the guidance says, developer prices might not represent a sustainable resale value, so in such circumstances a prudent lender would make appropriate reductions in the off-the-plan prices in determining loan-to-value ratios, or seek independent professional valuations. That is the regulator telling lenders, in advance, to be conservative about the very number an off-the-plan buyer signed years ago. It is not a conspiracy against your purchase. It is the design, written down.
There is a second, quieter reason a shortfall can become a bigger problem than the gap itself. Serviceability is not assessed at the loan's actual rate. Under Attachment C of Prudential Standard APS 220 Credit Risk Management, lenders must apply a buffer over a loan's interest rate of at least 3.0 per cent unless APRA determines otherwise, a requirement APG 223 restates. So a buyer who solves the shortfall by borrowing more can find that the larger loan no longer passes the buffered assessment, which is why "just increase the loan" is often not available even when the security would carry it. None of this is a rate, a quote or a promise about your file; it is the framework every mainstream assessment sits inside.
What does your contract oblige you to do?
Nothing the valuer wrote changes what you signed. If your contract is unconditional you are obliged to settle, and if you do not, the consequences run on the contract's own default machinery rather than on anything the valuer wrote. This is the layer that decides how much time you actually have, and it is the layer the finance content in this space almost never covers.
Take Victoria first, because the standard conditions are published and the wording is specific. Under the Victorian general conditions a party is not entitled to exercise any rights arising from the other party's default, apart from receiving interest and suing for money owing, until that other party has been given and has failed to comply with "a written default notice", and that notice must specify the default and state the intention to exercise rights unless, within 14 days of the notice being given, the default is remedied and reasonable costs and interest are paid. If the contract then ends on the seller's default notice, the deposit up to 10 per cent of the price is forfeited to the vendor as the vendor's absolute property, whether it has been paid or not, and the seller may, within one year of the contract ending, resell the property in any manner and recover any deficiency in the price on the resale and any resulting expenses by way of liquidated damages (general conditions of the sample contract of sale of real estate published by Consumer Affairs Victoria, buying property, read in August 2026).
Read that last limb again, because it is the fact this guide exists to put in front of people. Forfeiting the deposit is not the ceiling. The deficiency on the resale is. A buyer who walks away from a purchase in a falling market can lose the deposit and still owe the difference between the price they agreed and the price the seller eventually achieved, plus the costs of getting there. Interest on money owing during a period of default also runs under the standard conditions, calculated by reference to the Penalty Interest Rates Act rate, though the Victorian standard forms differ on the margin applied over that rate, so the contract in front of you governs. What that costs, and how it is calculated state by state, belongs to the penalty interest guide.
There is a second thing buyers almost never ask about, and it belongs on the list of questions for your solicitor rather than in a general guide. Terminating is not necessarily the seller's only option. Ask your solicitor whether, on your contract and in your state, a seller could instead ask a court to compel you to complete the purchase rather than end the contract and sue for the difference. The answer turns on the contract, the property and the facts, and this page does not assert a position on it. It is on the list because a buyer weighing "walk away and lose the deposit" against "settle somehow" is comparing two options when there may be three.
There is also a trap that catches company buyers and almost never appears in a finance context. Under the same Victorian conditions, any signatory for a proprietary limited company purchaser is personally liable for the due performance of the purchaser's obligations as if the signatory were the purchaser in the case of a default by a proprietary limited company purchaser. That cuts against the general assumption directors carry, which is that signing on behalf of a disclosed company keeps the obligation with the company. On a standard Victorian contract it does not, and in any state a special condition or a guarantee can do the same job. If you bought through a company or a trust, ask your solicitor specifically what you signed and in what capacity, before you decide what the default option actually costs you personally.
| State | What starts the clock | How long you have | What the seller can do, and the finance-relevant consequence |
|---|---|---|---|
| Victoria | A written default notice under the standard general conditions, specifying the default and the intention to act | 14 days from the notice being given to remedy the default and pay reasonable costs and interest | End the contract, forfeit the deposit up to 10 per cent of the price, and within one year resell and recover any deficiency in the price on the resale as liquidated damages. A company purchaser's signatory is personally liable |
| New South Wales | A notice to complete, because time is not of the essence for completion under the standard form and must be made essential | No period is fixed in the contract. The courts have treated 14 days as the minimum reasonable period a notice can allow, and it is enforced strictly | Terminate, keep or recover the deposit to a maximum of 10 per cent of the price, and where the property is resold under a contract made within 12 months of termination, recover the deficiency on that resale |
| Queensland | Nothing. Time is of the essence under the standard contract from the outset and no default notice is required before termination | Only the contract's own extension right: either party may nominate a new settlement date up to five business days later, by notice given on the settlement date | Terminate, resume possession, forfeit the deposit and any interest earned with no cap stated in the clause, resell, and recover the deficiency in price as liquidated damages where the resale settles within two years. A default rate applies to money not paid when due |
| Western Australia | Not verifiable from a published primary source for this guide. The 2022 joint form's buyer-default and termination conditions are not publicly available in a form this guide can quote | Not published in a source this guide can verify. Treat any period you have been told as coming from your contract, not from a general rule | The one limb that is published: under the 2022 joint form general conditions, interest on the balance of the purchase price runs where settlement is not completed within three business days after the settlement date, at the rate the contract prescribes. The default and termination rights themselves: check your contract with your settlement agent or solicitor |
| South Australia | Varies. South Australia has no single published standard contract, so nothing general can be stated | Varies, check your contract | Varies, check your contract. The deposit is at risk and a buyer can be sued for losses where the property cannot be resold at the same price, but the mechanics sit in the form your conveyancer used |
The Victorian row is drawn from the general conditions cited above, the New South Wales row from the Law Society of New South Wales standard land contract and published Supreme Court commentary on notices to complete, and the Queensland row from the REIQ standard contract for houses and residential land, each read for this guide in August 2026. Two things to take from that table rather than the detail in it. The first is that the gap between the states is enormous: a Queensland buyer can be terminated on the settlement date with no notice at all, while a New South Wales buyer is entitled to a notice allowing a period the courts police strictly. The second is that where the primary sources do not publish a position, this guide says so rather than filling the cell with something plausible. If you are in Western Australia or South Australia, the answer genuinely is in your contract, and getting it read this week is the single highest-value hour available to you. Where a third party's registered interest is what is actually blocking the transaction rather than the number, that is a different problem covered in the guide on a caveat blocking your settlement.
Does a subject to finance clause cover a low valuation?
Not automatically, and this is the distinction that decides the whole section: finance declined and finance approved for less than you need are not the same event. A low valuation frequently produces the second, where the lender is still willing to lend, just not enough to settle. Whether a finance condition protects you then depends on the exact wording of the clause, the amount it specifies, the lender's actual decision, and the notice steps and deadline in your contract. A live clause, properly exercised, remains the cleanest exit available to you, and it only works if you exercise it exactly as the contract requires: written notice within the time the contract allows, evidence of a genuine application, and in many contracts a formal decline rather than a conversation. An informal "the bank said no" is not the same thing as the notice the clause requires, and a clause exercised late or loosely is a clause you no longer have.
- Get the lender's position in writing. What has actually been approved, for how much, and why the amount changed. A phone call is not evidence for a notice.
- Put that written position and the clause itself in front of your conveyancer or solicitor. Together, not separately, because the clause is read against what the lender actually decided.
- Ask what notice is required, who must receive it, what evidence must accompany it and when the deadline expires. The mechanics are where clauses are lost.
- If you want more time rather than an exit, ask whether an extension should be requested before the clause or the settlement date passes. The two requests are different and the order matters.
There is a harder question underneath, and it is worth naming because it is genuinely contested rather than simply unpublished. A finance clause is usually about whether approval was obtained, not about whether the valuation was disappointing. Where a clause requires finance approval on terms satisfactory to the buyer, buyers sometimes argue that a shortfall means the terms are not satisfactory. Whether that argument works depends on the exact wording of your clause, what the lender actually said, and what you did in response, and there is no clean published answer that applies across contracts. So the honest position is this: do not assume a low valuation by itself lets you out under a finance condition, and do not assume it does not. Put the clause in front of your solicitor this week and get a view on your wording rather than on the general shape of the question.
Pre-approval is not property approval
A home loan pre-approval generally assesses the borrower before the lender has accepted the specific property as security, so it does not remove valuation risk. That distinction matters most at auctions and other unconditional purchases, and it is why the prevention section near the end of this page exists.
The extension question follows the same logic. If you need more time, an extension has to be agreed and documented before the date passes, not explained afterwards. Sellers do agree to extensions, particularly where the alternative is remarketing, but they agree in writing and in advance. Note too that a cooling-off period, where one applies to your purchase, is a different mechanism with its own timing and its own cost, and the two should never be conflated. Auction purchases are the sharpest case of all: in most states an auction contract is unconditional on the fall of the hammer, with no cooling off and no finance clause, which means the reader who bought at auction skips this section entirely and goes straight to the contract and funding sections.
The notice itself is a legal step rather than a broking one, so it should come from your conveyancer or solicitor. What a broker can usefully do in parallel is establish quickly whether the shortfall is fundable at all, so that you are choosing between two real options rather than exercising a clause because nobody told you the other option existed. If the date has already passed and a formal deadline has been served on you, the timing, costs and options sit in the guide to what happens once that deadline is served rather than here.
What else does the shortfall cost you?
More than the gap itself, because a lower valuation moves your loan-to-value ratio, and that ratio drives costs the shortfall arithmetic does not show. Meanwhile the costs most buyers assume will fall with the valuation, duty chief among them, do not move at all. Working through this before you decide anything is what stops a buyer solving for the wrong number.
| Cost | Does the low valuation change it? | What that means for you |
|---|---|---|
| The cash you need at settlement | Yes, upwards | The loan falls by the lender's advance ratio applied to the reduction in value, so your contribution rises by the same amount. This is the number everybody sees |
| Your loan-to-value ratio | Yes, upwards | The ratio is calculated against the lender's value, not the price, so the same loan against a lower value is a higher ratio. That can change pricing, policy and whether the loan is available at all |
| Lenders mortgage insurance | Often, and it compounds | LMI is a one-off premium that protects the lender rather than you, commonly required above a defined ratio. A shortfall can push a loan into LMI territory or increase the premium, and where the premium is capitalised it is counted inside the ratio itself, so the cost and the ratio push each other up |
| Stamp duty on the purchase | Generally no | Duty is assessed on the dutiable value of the transaction, driven by what you agreed to pay. A lender valuing the property lower does not reduce what you owe the revenue office, which is why a shortfall is a cash problem rather than a discount |
| Duty if settlement runs late | It can increase | In Victoria, late settlement interest forms part of the consideration and is included in the dutiable value, so a delayed settlement can add duty on top of the interest itself |
| The price you owe the seller | No | The contract price is what the contract says. Only a renegotiation or a right you actually hold changes it |
| Legal, conveyancing and adjustment costs | Not directly, but a delay adds to them | Extensions, notices and re-lodgements all generate work, and that work is billed. A file that runs two extra weeks is not a free file |
The duty point deserves its own paragraph because it is the one people get wrong in both directions. Duty does not fall because a valuer disagreed with your price, and if settlement then runs late, it can rise. The Victorian State Revenue Office states that late settlement interest is part of the consideration for the transfer of the land, a position it says was confirmed by a 2020 decision of the Supreme Court of Victoria, and that it is therefore "included in the dutiable value" with duty payable on that amount (State Revenue Office Victoria, duty payable on late settlement interest, read August 2026). The SRO also records an interim carve-out under which late settlement interest is not counted when determining eligibility for certain concessions, exemptions and the First Home Owner Grant. Rates, thresholds and treatment differ by state, and duty is a question for your conveyancer and your own revenue office rather than for a broker. The reason it belongs on this page at all is that a buyer weighing a short delay against a funding cost needs to know the delay is not free either.
None of this is a reason to panic about the total. It is a reason to write the whole number down before you choose between the options in the rest of this guide, because the choice between renegotiating, funding, delaying and exiting only makes sense once you know what each one actually costs.
Can you renegotiate the price with the seller?
You can always ask, and whether it works turns almost entirely on the seller's alternatives rather than on your valuation. This is the free option, it is the one every page lists first and none explains, and it is worth a serious attempt before you price a facility, because the cheapest money in this whole guide is money you do not have to borrow.
Start from an honest read of your own position. If your contract is unconditional, you are asking a favour, not exercising a right, and the seller knows it. If a finance clause is still alive, you have leverage, but spending it badly can forfeit it, so the request and the clause should be handled together by your conveyancer rather than separately. Either way the conversation goes through your conveyancer or the agent in writing, not as a phone call you later have to characterise.
- Ask early, in writing, and be specific. A vague "can we revisit the price" invites a no. A defined request, with the shortfall stated and a proposed figure or a proposed structure, gives the seller something to accept.
- Expect to be asked for the valuation. Sellers and agents discount claims they cannot see. Whether you can share the report depends on the lender's terms, so ask your broker or lender what you are permitted to disclose before you offer it.
- Read the seller's alternatives, because they decide the answer. A seller who has already bought elsewhere, who has been to market once and passed in, who is in a soft segment, or who suspects the next buyer's lender will produce the same number, has a real reason to negotiate. A seller with a live back-up offer and an unconditional contract does not.
- Offer something other than a lower price. A price reduction is not the only currency. A shorter settlement, a larger release of the deposit where that is permitted, waiving conditions you no longer need, or a modest extension in exchange for certainty are all things a seller may value more than the last few thousand dollars.
- Ask about vendor terms if a straight reduction is refused. Some sellers will leave part of the price outstanding on agreed terms rather than lose the sale. It is a negotiation and a solicitor's document rather than a product, and it needs the seller's own lender's position considered, but it has settled purchases that nothing else would have.
- Know when to stop. If the answer is a firm no and your contract binds you, keep the relationship intact and move to the funding and legal options. A seller you have antagonised is a seller who will not agree to an extension in ten days' time.
One thing worth being clear-eyed about. A renegotiation that succeeds usually does so because the seller privately shares your doubt about the price, which is information worth noticing. If the seller drops the price to the valuation without much of a fight, that is a data point about the market, not just a win. It belongs in the same judgement covered in the section on when funding the gap is the wrong answer.
Can you dispute a bank valuation?
You can ask the lender for a review, and it is worth trying in defined circumstances and close to worthless in others. What a review can do is correct things that are verifiably wrong: a missed renovation, a wrong land size, an incorrect number of bedrooms or bathrooms, a comparable sale that is genuinely unrepresentative of the property or the market. What it cannot do is persuade a valuer to adopt your price because you paid it. The valuation is an assessment of market value, and the fact that one buyer was willing to pay more than that is not evidence against it.
The procedural point most buyers miss is that you are usually not the valuer's client. The lender instructed the valuation, the report is the lender's, and evidence goes back through the lender rather than to the valuer directly. That also shapes what to send: recent, genuinely comparable, settled sales, presented cleanly, rather than a list of current asking prices or an argument about how much you love the place.
What makes a review worth trying
- A factual error you can point to: land size, floor area, room count, missing improvements or works
- Comparable sales that are not genuinely comparable, or that predate a clear move in the local market
- Recent settled sales of properties that are genuinely alike, which you can supply through the lender
- A specialised or unusual property where the valuer may not have had the full picture of its use
What a review will not fix
- A difference of opinion about market value where the comparables are sound
- The fact that you paid more than anyone else was willing to pay
- A contract price agreed years ago on an off-the-plan purchase
- A settlement date that is closer than the review process can realistically run
The obvious next question is whether you can simply pay for your own valuation and hand it over, and the honest answer is that nobody publishes a rule. The major lenders publish general explainers on what a bank valuation is and how it feeds the loan-to-value ratio, and none of them publishes a policy on whether it will accept a report commissioned by the borrower. So the useful move is not to guess but to ask: put the question to your lender or broker before you spend the money, ask what firm and what instruction they would accept if any, and treat any general claim that lenders do or do not accept borrower-ordered valuations as unsourced. An independent valuation can still be worth having for your own decision-making, particularly when you are weighing whether the price or the valuation is the thing that is wrong.
It is also worth knowing where the formal complaint paths do and do not reach, because they are routinely oversold. The Australian Property Institute accredits Certified Practising Valuers and runs a professional conduct process, but it states plainly that the process cannot "determine negligence or assess the accuracy of a valuation", cannot resolve a difference of opinion between a complainant and a member about assessed market value or market rent, cannot require a report to be amended, and cannot award compensation (Australian Property Institute, professional misconduct, read August 2026). Standing is generally limited to the party that instructed the valuation, which on a lender-ordered valuation is the lender. Separately, the Australian Financial Complaints Authority considers complaints about financial firms that are AFCA members, including from small businesses of fewer than 100 employees. Both are real routes. Neither is faster than a settlement date.
One practical entitlement worth knowing if your purchase is commercial. Under the 2025 Banking Code of Practice, a subscribing bank undertakes that where it has received a valuation of commercial or agricultural real property that the customer has paid for, it will give the customer a copy of that valuation and the related valuer instruction, except where enforcement proceedings have commenced (Australian Banking Association, 2025 Code, effective 28 February 2025). Note what actually triggers it: the property type, and the fact that you paid for the valuation. It is not a general right for every borrower, and the Code binds subscribing banks only. But if it applies to you, seeing the report is the difference between guessing at the comparables and answering them.
Should you switch lenders?
Switching can genuinely change the number, because lenders use different valuation panels, and it can also cost you days you do not have, because those panels overlap and the same firm can come back on the new lender's panel and produce the same result. That is the whole trade-off, and it is the advice this reader is given most often and has explained least often.
Two things separate a sensible switch from an expensive one. The first is whether you can test the number before you commit to a full application. Some lenders and brokers can order an upfront valuation before a formal application, which is the difference between testing the number and betting the settlement date on it. The second is honest arithmetic about time: a new application, a new valuation and a new approval consume days, a second decline is not free, and the settlement clock in the contract section does not pause while you shop.
Bank and non-bank lenders read the same shortfall differently, and that is a policy difference rather than a quality difference. Mainstream lenders are working inside the prudential framework described above. Specialist and private funders assess the security position and the exit more than the income, which is why they can look at a file a bank has declined, and why they price differently for it. Neither is the right answer in the abstract. On a commercial purchase the valuation question has its own shape, covered in the piece on a commercial valuation landing under your contract price, and on specialised premises the gap between what a business is worth and what the bricks are worth drives the number, as the piece on a cafe premises valuation under offer sets out.
The practitioner point, and it is the one worth acting on today: run the review, the renegotiation, the lender switch and the shortfall-funding conversation in parallel, not in sequence. Buyers who lose contracts almost always ran them one after another and arrived at the last option with days left.
Can family help cover the gap?
Yes, and "family help" can mean four very different things: a genuine gift, a repayable family loan, a guarantee, or a family member borrowing separately in their own name. The incoming lender may treat each one differently, the legal and tax consequences differ, and the arrangement should be disclosed to the lender before the money moves rather than discovered afterwards. Every consumer page lists "ask family" as an option; almost none explains that the structure matters more than the amount.
| Structure | What the lender may care about | The main risk to clarify first |
|---|---|---|
| Genuine gift | The source of the funds, evidence that the money is not repayable, and whether a signed gift declaration is required | Do not call it a gift if there is a private expectation of repayment, because that misdescription sits on the loan file permanently |
| Family loan | The repayment obligation, the term, and whether the new liability changes your serviceability | A repayable loan is new debt, and the home loan approval may need reassessment once it exists |
| Family guarantee | Who guarantees what, what property secures it, whether the exposure can be limited, and lender policy on guarantees | The guarantor's own property can be at risk, and independent legal advice for the guarantor should be treated as essential rather than polite |
| Family member borrows separately | That person's own serviceability and security, plus clean evidence of how the funds reach the purchase | It creates a separate debt in their name and can carry tax, estate planning or pension consequences that outlast the purchase |
The guarantee row deserves its own sentence, because it is the version families reach for and understand least. Moneysmart, the government's own consumer guidance, warns that if the borrower cannot make repayments the guarantor "may have to repay the whole loan plus interest", and that if the guarantor cannot pay, the lender may repossess an asset used as security, such as their home (Moneysmart, going guarantor on a loan, read August 2026). A family member providing a guarantee or security is taking on a risk they usually have not been shown clearly, whoever provides support should get their own advice from their own adviser, and the arrangement should be written down whatever form it takes. Where the person helping receives an age pension or other means-tested payment, or the arrangement has tax or estate planning consequences, that advice comes from the appropriate professional rather than from a mortgage article.
A personal loan in your own name deserves the same caution for a quieter reason. It may solve the cash line while weakening your serviceability, and an existing approval can be reassessed once the new debt exists. Tell your broker or lender before taking on any new facility, not after the settlement documents are ready, because a surprise liability discovered at the final check is how approvals fall over in the last week.
How do buyers cover a valuation shortfall before settlement?
Most commonly by raising the difference against property, and the five structures that fit are a second mortgage over the property being bought, a caveat-secured short-term loan over a property you already own, private lending, an equity release from an unrelated property, and vendor terms negotiated with the seller. Consent, priority and a dated exit decide which of those is actually available to you, not lender appetite. Search this problem and you will find the same options list on almost every page, cash, family, dispute, switch, exit, with this branch either missing or recommended without anyone explaining it. The options below are named rather than sold, and each one works only when the exit is a date rather than a hope.
A word on terminology first, because people arrive here searching for a product that is really a function. Bridging is not a separate structure on this list. It describes short-term funding that covers a gap until a known event repays it, and on a shortfall file that function is delivered through one of the structures below: a second mortgage behind the incoming first mortgagee, a caveat-secured loan over another property, or a private lending facility. So if you have been told you need bridging, the real question is which of these is doing the work, what it is secured against, and what event repays it. How the property-secured options compare on speed generally is mapped in the guide to what makes a settlement file move quickly.
| Structure | When it commonly fits | What it does, and the main constraint |
|---|---|---|
| Second mortgage behind the incoming first mortgagee | The purchase stacks up, the gap is a fraction of it, and you want it secured on the property being bought | Raises the difference against the same property, ranking behind the incoming first mortgage. The constraint is consent and priority: outside Queensland the first mortgage's own terms, together with a priority arrangement between the two lenders, decide whether it can happen at all |
| Caveat-secured short-term loan over another property | You already own another property with real equity in it and want the purchase left clean | Raises short-dated funds against a property you already hold, without touching the purchase security. The constraint is that a caveat is a holding position rather than a security with its own power of sale, and it can itself breach the first mortgage's terms |
| Private lending | The file is sound on security and exit but will not fit a mainstream credit policy in the time available | Assessed on the security position and the exit rather than on full income verification. The constraint is that it is short-term by design and priced for it, so the exit has to be real and dated before it is the right tool |
| Equity release from an unrelated property | You hold another property and want a longer-dated, mainstream structure rather than a short one | Draws equity from a property you already own, on ordinary terms. The constraint is time: it is a full application on the other property, so it suits buyers who started early rather than buyers with days left |
| Vendor terms | The seller has a reason to want the sale completed and some flexibility on how | The seller leaves part of the price outstanding on agreed terms. The constraint is that it is entirely a negotiation, it needs the seller's own lender's position considered, and it is a solicitor's document rather than a product |
Now the technical layer that decides whether the first row of that table is available to you, and the reason this section can be more useful than a product page. Registration consent and contractual consent are different things. In New South Wales, since certificates of title ceased to have legal effect on 11 October 2021, the Registrar General's published position is that a subsequent mortgage does not require the first mortgagee's consent to register, though a consent can be uploaded if the parties want one, for instance where the terms of the first mortgage require it. The Registrar General describes that as "a contractual matter between the parties" that it does not police, and adds that it is important to check the terms of the first registered mortgage (Office of the NSW Registrar General, read August 2026). So "no consent needed" can be true at the registry and false in your loan contract at the same time, and a further-encumbrance covenant breached is capable of being an event of default under the loan you are relying on to settle.
Queensland is now the exception to that, and it is a genuinely under-published change. Section 125 of the Property Law Act 2023 (Qld), which commenced on 1 August 2025, provides that a mortgagor may grant a second or subsequent mortgage over the property, that granting it does not breach a term of the first mortgage or occasion any forfeiture or penalty, and that the section "applies despite any agreement to the contrary". The Queensland land registry's own practice manual puts it the same way: a subsequent mortgage may be created without the consent of a prior mortgagee, notwithstanding any provision in the prior mortgage to the contrary. Victoria works differently again: on a mortgaged property the electronic certificate of title is normally controlled by the first mortgagee, and only the party with control can nominate the title into the transaction, so the first lender keeps practical control even where formal consent is not the issue.
Priority between the two lenders is then usually managed by a deed of priority, which fixes each lender's ranking and caps the amount the first mortgagee's priority extends to. It exists because of the tacking rule: under section 94 of the Property Law Act 1958 (Vic), for example, a prior mortgagee may make further advances that rank ahead of a later mortgage where an arrangement has been made with the later mortgagee, or where the prior mortgagee had no notice of the subsequent mortgage when the further advance was made, or where the mortgage obliges the prior mortgagee to make such further advances. In plain terms, without a priority arrangement the first lender's later advances can climb over the second mortgage, which is exactly why second-mortgage funders ask for one.
And the caveat, framed honestly, because it is the option most often misdescribed. A caveat is not a mortgage. Land registries describe it as a notice that prohibits the registration of an instrument, intended to allow time for parties to apply to the court to enforce or determine an interest, and the Queensland registry's practice manual warns that it "should not be seen as a viable alternative to registering the interest" (Titles Queensland, Land Title Practice Manual Part 11, updated 1 August 2025). It confers no power of sale of its own, it can be brought to an end on notice, and the mechanism differs by state: under section 74J of the Real Property Act 1900 (NSW) a Supreme Court order extending the caveat must be obtained and lodged within 21 days after service; under section 89A of the Transfer of Land Act 1958 (Vic) the Registrar must specify a lapsing day not less than 30 days after service; and under section 126 of the Land Title Act 1994 (Qld) a proceeding must be started and the registrar notified within 14 days of service, or within three months of lodgement where no notice is served. Priced and understood as a holding position, a caveat loan is a real tool. Treated as a mortgage, it surprises people.
The mechanics of each structure live on their own pages and this guide deliberately does not re-teach them: how ranking, first mortgagee consent and costs actually work is set out in the guide to second mortgages, and how caveat-secured lending is documented and exited in the caveat loans guide. Using a second mortgage to fund a deposit or a shortfall on an investment purchase specifically is covered in the piece on a second mortgage for an investment property deposit. What belongs here is the decision, not the product.
Money you may already have: the company, trust and super questions
Before borrowing from anyone new, four sources of money that self-employed buyers already control are worth putting in front of your accountant, because two of them are often available, one is available but only on strict terms with a deadline you will not see coming, and one is not available at all. This section exists because every consumer property page tells the reader to ask family, and none of them addresses the entities a business owner actually holds money in.
Business working capital. Often the fastest money in the room, and the one most likely to create a second problem a quarter later. Cash sitting in a trading account is usually doing a job: wages, stock, the next tax and superannuation obligations, the buffer that stops a slow debtor becoming a crisis. Draining it to settle a property can convert a one-week problem into a three-month one. If you do use it, the question to answer honestly first is what the business will need over the next two quarters, not what it has today.
A loan from your own company. Frequently possible, and the timing is what catches people rather than the concept. The ATO states that a loan from a private company to a shareholder or their associate may be treated as a Division 7A dividend unless, by the company's lodgment day, the loan has been repaid or is a complying loan for Division 7A purposes. A complying loan requires "a written loan agreement" in place before that lodgment day for the income year the amount was paid, and an interest rate for each year of the loan at least equal to the Division 7A benchmark rate, with minimum yearly repayments thereafter (ATO, loans and other forms of credit, read August 2026). The maximum term is longer where the loan is fully secured by a registered mortgage over real property meeting the ATO's stated value test, which is worth raising with your accountant precisely because you are buying property. The practical point for a buyer under a settlement deadline is that the paperwork has a deadline of its own, it is months away rather than days, and it is very easy to move the money now and forget the agreement later. That is the failure mode. Speak to your accountant before the money moves, not at tax time.
Family funds or a guarantor. Real, and worth documenting properly rather than informally. Whoever provides the money should get their own advice, from their own adviser, and the arrangement should be written down whether it is a gift, a loan or security. A family member who provides security is taking on a risk they usually have not been shown clearly, and doing that badly damages something that outlasts the property.
Your superannuation. Not available, and this is the one people try anyway. The Australian Taxation Office's ruling on financial assistance explains that section 65 of the SIS Act prohibits the lending of fund money to a member or a relative of a member, and separately prohibits using fund resources to provide any other financial assistance to them (ATO, Self Managed Superannuation Funds Ruling SMSFR 2008/1, read August 2026). The ruling goes further than most people expect, because it lists arrangements that contravene by their very nature, including giving a guarantee or an indemnity for the benefit of a member or a relative, and giving a security or charge over fund assets for their benefit. So the workaround that occurs to people next, having the fund guarantee the shortfall loan or put up a fund asset as security, is squarely inside the same prohibition. If a lender or adviser suggests structuring around it, that is the moment to stop and call your accountant.
What does a shortfall lender actually look at?
Six things, in roughly this order, and none of them is how sympathetic the situation is. Knowing the order matters, because it tells you what to lead with and what not to spend the call explaining.
- The security position. What the property is genuinely worth on the lender's own read, and what equity actually sits behind the incoming first mortgage once it is in place. Specialist funders often work to a forced sale value rather than a market value, which is why their number can be lower again than the one that caused the problem.
- The size of the gap against the whole transaction. A small gap on a sound purchase reads very differently to a large gap on a marginal one, and the ratio matters more than the dollar figure.
- The exit, which carries more weight than anything else on the file. The sale of another asset, a refinance once the file has some history, or a completed project, each with a date attached.
- The settlement date, and whether it can move at all. A date that has already been extended once reads differently to a date nobody has tested.
- Title, and whether anything is already registered against it. An existing caveat or an unexpected encumbrance changes the answer before anyone discusses terms.
- The evidence pack. The contract, the valuation, the incoming lender's approval, and the payout figure where a refinance is part of the picture.
Which brings up the thing that decides most of these weeks, and it is unglamorous. Speed, when it happens, is earned by the file rather than promised by the lender, which is why this guide does not print turnaround times and why you should be wary of anyone who does before seeing your documents. Documents ready, a dated exit, clean title and a solicitor who can act this week are what actually compress a timeline. Assemble the following before you make the call, not after it.
| What to have ready | Why it gets asked for first |
|---|---|
| The contract of sale, including the special conditions | It sets the deadline and the default consequences, and every option downstream is shaped by it. Special conditions routinely override the standard positions in this guide |
| The settlement date, in writing | It determines which routes are realistic and which are theoretical, and it is the first question every party will ask you |
| The valuation, if you were given a copy | It shows what was assessed, on what basis, and which comparable sales were used, which is also what a review has to answer |
| The incoming lender's approval and the approved amount | It fixes the actual size of the gap and defines the first mortgage that anything else has to rank behind |
| Titles and current loan statements for any other property | It establishes what security exists outside the purchase and what equity genuinely sits behind it, which decides whether the second or third structure is open to you |
| The exit, in writing, with a date | It is the single most heavily weighted item on the file, and a gap with a dated exit is a different conversation to the same gap without one |
| Entity documents where a company or trust is buying | The borrower has to be the entity named on the contract, and trust deeds and company records take longer to find than people expect |
| Your conveyancer's or solicitor's direct contact | Nothing settles without them, and a file where the lawyers can speak to each other the same day moves and one where they cannot does not |
How a valuation reshapes what a second-mortgage funder will go to is covered in the piece on how a valuation reshapes a second mortgage limit.
The commercial and company case has its own shape. On a commercial property purchase, maximum loan-to-value ratios are typically lower than on residential security, specialised premises are valued on a narrower basis, and where a business is being bought with the building the difference between the going-concern value and the value of the bricks is often the whole shortfall. Development purchases have their own version of this, set out in the piece on the development valuation gap, and industrial security reads differently again, as the piece on industrial property through a second mortgage lens explains. Where a shortfall is being assessed by a specialist funder rather than a bank, the general framework is in the private lending guide.
From our broking files, general and without figures
What we see on valuation-shortfall files, kept deliberately to direction rather than numbers, because a settlement-deadline file is exactly where an invented figure does damage.
- The buyers who get through this ran the review, the renegotiation, the lender switch and the funding conversation in parallel from day one. The ones who lose the contract ran them in sequence and arrived at the last option with days left.
- The first question is never how much you need. It is what the contract says and when the clock starts, because every funding option downstream is shaped by the answer.
- A shortfall file is judged on the exit, not the gap. A gap with a dated, credible exit is a straightforward conversation. The same gap with a plan to refinance later is not.
- Family help arrives mislabelled more often than it arrives structured. A loan called a gift, or a guarantee nobody explained to the guarantor, causes more late-stage failures than the shortfall itself.
- Almost nobody asks the seller. The renegotiation conversation is free, it is over in a day, and it is skipped far more often than it fails.
- The most common avoidable mistake: assuming a second mortgage is available because the registry no longer requires consent, without reading what the incoming first mortgage says about further encumbrances.
- The second most common: treating a caveat as though it were a mortgage, then being surprised by what it does and does not give the lender.
- Business owners under-use the hour with their accountant and over-use the hour with lenders. The entity question, and what it costs to move money out of a company, is usually settled faster than the finance question and changes the answer more.
- The hardest conversation, and the one worth having: when the valuation is simply right. Funding a gap on an asset genuinely worth less than the price is the one file where the honest answer costs the broker the deal.
General information only, from broking experience, and not financial advice. This is not an offer, an approval, or a likelihood of approval; every application is assessed on its own facts, its security, its exit and lender policy at the time. Speak to a qualified broker, your conveyancer or solicitor, and your accountant.
How do you check a shortfall lender before you sign?
Check the public registers before you pay anyone anything, then watch what they ask for and in what order. A buyer with a settlement date is the most pressured borrower in the market, and pressure is exactly the condition in which bad terms get signed. This section is the part of the page that costs a broker deals, and it belongs here anyway.
The registers are free, they take minutes, and almost nobody uses them. ASIC publishes a professional registers search covering people and organisations registered or licensed with ASIC to provide a service, searchable by individual or company name, registration or licence number, ACN or ABN, with most information available free. Alongside it, ASIC maintains registers of organisations and of people banned or disqualified from providing financial services or engaging in credit activities, which is the second search worth running on the same name. Separately, AFCA publishes a financial firm search so you can check whether a firm is an AFCA member and find its complaint contact details, and AFCA states plainly that it can only consider complaints about its members. Note also that from FY26 AFCA no longer issues membership certificates and directs members, consumers and industry to that search instead, which is precisely why a certificate someone emails you is not the check. All read August 2026.
Two honest caveats so the registers are used properly rather than as a talisman. Appearing on a register is not an endorsement, and a great many legitimate lenders in this space lend for business purposes in ways that do not require a credit licence at all. The point of the search is not to confirm someone is good. It is to confirm that what they told you about who they are is true, and to catch the cases where it is not.
What a straight lender does
- Puts every fee in writing before asking for any payment, including what is payable if the loan does not proceed
- Asks about the exit before it asks about the size of the loan
- Is willing to say no, and says it early rather than after you have stopped looking elsewhere
- Expects your own solicitor to review the documents, and allows time for it
- Tells you plainly who the actual lender is and who is the broker, and how each is paid
- Gives you a name and a number you can find on the public registers
What should stop you
- An upfront or commitment fee requested before any written terms exist
- Pressure to sign the same day, using your own settlement date as the reason
- A suggestion to change who borrows so the loan is not regulated credit
- No real interest in how the facility gets repaid
- Terms that only ever arrive as a summary, never as the documents themselves
- A membership certificate or a screenshot offered instead of a register you can search yourself
Five questions worth asking before anything is signed. Ask them in writing, and keep the answers, because a written answer is worth more than a reassuring phone call when something goes wrong three months later.
- What is every fee, in writing, including what is payable if this does not proceed? Establishment, legal, valuation, line, exit and discharge costs, and anything payable on the day you sign rather than the day you draw.
- What happens if I cannot repay on the day it falls due? What rate applies then, what notice you get, and what enforcement rights the lender has and how quickly they can be used.
- What security are you taking, over what, and at what priority? Whether it is a mortgage or a caveat, whether a deed of priority is required, and what happens to the arrangement if the first lender declines to sign one.
- Is this regulated credit, and if not, why not? If the answer involves changing who the borrower is, read the next section before you go any further.
- Who is the lender, who is the broker, and how is each being paid? On short-dated property lending these are frequently different parties, and knowing which one you are speaking to changes how you read everything they tell you.
None of this is a reason to avoid private lending as a category. Short-dated property-secured funding is a legitimate tool that does a job banks cannot do inside a settlement week. It is a reason to buy it the way you would buy anything else expensive and time-limited, which is with the documents read by someone who acts for you.
When is funding the gap the wrong answer?
When the valuation is right and the price was wrong, and when the only way to make the loan work is to change who signs it. Those are the two hard limits on everything above, and a page that only sold the funding branch would leave both out.
The first is the honest one. If the valuation is right and the price was wrong, funding the difference does not fix anything. It settles a purchase at above market value using borrowed money, often with a short-dated facility sitting on top of the mortgage, and the exit has to survive that arithmetic. Sometimes the correct answer is to use a live finance clause, renegotiate the price with the seller, or accept the default consequences in the contract section above with proper advice. That is not a comfortable thing for a broker to write, and it is true anyway. The test is not whether the gap is fundable. It is whether the purchase still makes sense once it has been funded.
The second is a compliance limit, and this page states it because the search results around this question generally do not. Consumer credit protections turn on who is borrowing and why. The National Credit Code applies where the lender is in the business of providing credit, a charge is made, the debtor is a natural person or strata corporation, and the credit is provided "wholly or predominantly" for personal, domestic or household purposes, or to purchase, renovate or improve residential property for investment purposes (ASIC, National Credit Code, read August 2026). ASIC also states, on its credit licensing guidance, that loans to companies are not subject to the credit legislation and that only loans to natural persons and strata corporations are caught (ASIC, does the credit legislation apply, page last updated October 2020). That difference is real, and a genuine business-purpose purchase sits outside the Code for legitimate reasons.
It is also exactly the difference the regulator has taken to court. In proceedings ASIC announced in October 2024, it alleges that a lender provided loans to companies rather than to the individuals who required the loan in order to avoid the operation of the Code, through a model that required a company to be the named borrower where the company did not benefit from or have any genuine interest in the loan, across up to 47 loans totalling over 37 million dollars. ASIC's Deputy Chair said that as a result of loans being treated as unregulated, the lender was alleged to have deprived clients of important consumer protections including responsible lending obligations, the right to make a hardship application, and protection from excessive fees and interest (ASIC media release 24-243MR). These are allegations and no findings have been made: as at August 2026 both companies are in liquidation, the Federal Court has granted ASIC leave to continue the proceedings, and the substantive hearing is listed for February 2027.
The reader-facing rule is short. If a lender's answer to your consumer protections is to restructure who signs, that is not a solution to your shortfall. It is the thing the regulator is litigating. A company or trust borrowing for a genuine business purpose is ordinary and fine. A company inserted as the borrower on what is really a home loan, so that the protections fall away, is not, and no settlement deadline makes it so.
How do you get out of a short term facility afterwards?
Through the exit you agreed before you drew it, executed by requesting a payout figure and then a discharge of the security. Almost nothing published on valuation shortfalls goes past the settlement date, and the months after settlement are where the decision you made in a pressured week either works or does not. Read this section before you sign, not after.
Three exits hold up in practice. The sale of another asset, where the strongest version is an asset already on the market or under contract rather than one you intend to list. A refinance, once the file has enough history for a mainstream lender to assess it, which usually means the purchase settled cleanly, payments have been made on time, and the reason the bank said no in the first place has changed rather than merely aged. The completion of a project, where the value released is what repays the facility, and where the timeline has to include the things that reliably run late. An exit strategy that is none of these is usually a hope with a date written next to it.
The mechanics are worth knowing in advance, because they are where exits slip. Getting out means asking the lender for a payout figure, which is the amount required to close the facility on a stated date and which is not simply the balance you think you owe, then arranging discharge of the mortgage or withdrawal of the caveat once it is paid. Both steps take documents and both take time. Ask three questions at the start rather than at the end: what a payout figure will include, what the discharge itself costs, and how long the lender takes to produce a figure and to release the security. A refinance that settles on the day your facility expires, with a payout figure requested that morning, is a plan with no margin in it.
The ways exits fail are just as consistent, and all four are visible before you sign. Relying on a refinance that no lender has indicated any appetite for. Leaving no room for the exit to slip, so that a normal delay becomes a default. Letting costs accumulate against equity that was thin to begin with, which is how a manageable facility quietly stops being repayable from the security it sits on. And setting the exit date on the same day the facility expires, which removes every option you would otherwise have had in the final fortnight.
So four things to settle before the facility is drawn rather than after. Agree the exit in writing and name the evidence for it. Build in room for it to slip, and know what an extension costs before you need one, because that price is negotiated far better at the start than at the end. Understand how interest and fees accrue against the security and what that does to the equity you are relying on. And know what happens if the exit fails entirely, because the answer is enforcement against property, and that is a conversation to have with your own solicitor while there is no pressure on you. How this works structurally is covered in the guide to second mortgages and the private lending guide, and the general shape of property-secured options is mapped in the property lending hub.
What if the exit is delayed or fails?
Act before the maturity date, not after it, because every option on this list narrows once the facility is in default. Request a current payout figure, identify exactly why the planned exit slipped, test whether an extension or a replacement refinance is genuinely available rather than merely hoped for, and have your solicitor review the facility's default and enforcement provisions while you still have choices. This section exists because almost nothing published on valuation shortfalls follows the borrower past drawdown, and the maturity date is where the decision made in a pressured week is actually tested.
| Problem | The immediate question to answer |
|---|---|
| The asset sale is delayed | Is the sale still credible, how much extra time does it realistically need, and does the lender know yet? A lender told early about a slipping sale behaves differently to one told at maturity |
| The refinance is not ready | What exact policy, valuation or servicing issue is stopping approval, and can it actually be solved before maturity? A refinance is only an exit when the reason the original lender said no has changed |
| The payout is higher than expected | What interest, fees, legal costs and discharge amounts are inside the payout figure, and were any of them avoidable with an earlier request? |
| An extension is on the table | What evidence, fee, fresh valuation or revised exit does the lender require, what does the extension cost, and what happens if it is refused? |
| The maturity date will be missed | What default terms and enforcement rights apply, how quickly can they be used, and is the facility regulated consumer credit or genuine business purpose finance? The protections differ materially between the two |
Two routes are worth knowing about before things harden. For regulated consumer credit, hardship processes exist and are worth raising early rather than at enforcement. For business purpose finance, where the financial firm is an AFCA member, the Australian Financial Complaints Authority considers complaints from small businesses of fewer than 100 employees, and its financial firm search, covered in the vetting section above, tells you whether that route exists on your facility. Neither route is a substitute for acting before maturity.
And one honest sentence that belongs here rather than in the fine print. Do not keep extending a failed exit merely because enforcement feels worse. Interest and fees accrue against the same equity every time, and sometimes selling an asset voluntarily, on a timetable you control, is a better decision than repeatedly rolling expensive debt toward an exit that has stopped being real. That is a legal, financial and commercial decision to make with your advisers before the facility reaches crisis point, not one to have forced on you afterwards.
Off the plan: what rights might you still have?
You are generally still bound to settle, and any right to exit comes from something the developer did or failed to disclose rather than from the valuation itself. Off-the-plan buyers are the sharpest version of this problem, because the contract was signed years before the valuation and the market has had all that time to move. The finance answer is the same as in the funding section above. The rights layer is different, it is state-based, and what each state actually publishes varies more than most content admits. Everything below is a pointer to who can tell you whether a right applies to you, not a statement that it does.
New South Wales publishes the fullest position. A vendor must notify purchasers of changes that make what was first disclosed inaccurate in a material particular, described as changes that will adversely affect the use or enjoyment of the lot being purchased; where purchasers are materially prejudiced by such a change they can end the contract and recover the deposit, or claim compensation, which the state describes as capped at 2 per cent of the purchase price; and the state's own warning is unambiguous about the clock, that "you only have 14 days from being notified" of a change to take action (NSW Government, buying property off the plan, read August 2026). Purchasers must also be given a copy of the registered plan at least 21 days before settlement.
Queensland publishes a termination right where a change to the original disclosure causes material prejudice, exercisable within 30 days of receiving the seller's notification or before title transfers, whichever comes first, alongside a seller disclosure scheme requiring a disclosure statement before the buyer signs (Queensland Government, read August 2026). Western Australia's equivalent is published by the land agency rather than the consumer regulator, as notifiable variations to a strata scheme, with avoidance available before settlement where a defined variation was not disclosed, and a working-day window where pre-contractual information was given late and the buyer is materially prejudiced (Landgate, read August 2026). Victoria's consumer regulator publishes something narrower on its off-the-plan page: if the plan of subdivision is not registered by the time specified in the contract, or the default time of 18 months, the purchaser has the right to end the contract and get the deposit back (Consumer Affairs Victoria, buying off the plan, read August 2026). It does not publish a material-change rescission right, which does not mean none exists in the legislation, only that a general guide should not tell you it does.
There is a further avenue that sits outside the state disclosure regimes entirely, and it is the one buyers reach for when the developer says everything was disclosed correctly. Section 18 of the Australian Consumer Law, which is Schedule 2 to the Competition and Consumer Act 2010, prohibits a person from engaging in conduct in trade or commerce that is misleading or deceptive or likely to mislead or deceive. Section 236 provides that a person who suffers loss or damage because of conduct that contravened Chapter 2 or 3 may recover the amount of that loss, and section 236(2) provides that an action may be commenced within six years after the day on which the cause of action accrued. That is a general consumer protection rather than a property rule, it turns on what was actually represented to you and what you relied on, and proving it is a very different exercise from exercising a disclosure right. It is on this page for one reason: an off-the-plan buyer told that disclosure was correct is usually told there is nothing left, and that is not the same thing as there being nothing left. It is a question for a solicitor, and the limitation period means it is a question worth asking sooner rather than later.
Two boundaries. None of the above is a route out of a purchase you have changed your mind about; each is a remedy for something the developer did, failed to disclose, or represented, and each turns on documents your solicitor has and this page does not. And where the issue is the developer running past the sunset date rather than the value coming in short, that is a different trigger with different rights, covered in the guide on an approaching sunset clause. If the valuation is the problem and the disclosure and the marketing were accurate, you are back in the finance and contract sections above, which is the honest answer even though it is not the welcome one.
What about house-and-land or construction shortfalls?
Construction shortfalls are a related but distinct problem, because the sum of the land cost, the build contract, the variations and the site costs is not automatically the completed market value. Some upgrades add less resale value than they cost, some site works are necessary but not saleable at all, and a desktop or on-completion assessment may not have had the final plans, specifications or finishes in front of it. If the report appears to have missed completed work or genuinely comparable finished properties, ask the lender whether a full inspection or a review is available and what evidence it will accept, and do not assume every variation is added to the valuation dollar for dollar, because it will not be.
The lending problem also collides with the building contract, and that collision has a deadline of its own. In Queensland, the state building regulator explains that the contractor can ask for final payment once practical completion is reached, with the builder giving notice at least five business days before practical completion and generally flagging it two to three weeks out (Queensland Building and Construction Commission, handover, read August 2026). So a buyer whose completion valuation lands short can face a valuer problem, a lender drawdown problem and a builder payment deadline in the same fortnight, and the three have to be worked together rather than in sequence. Other states run their own domestic building regimes, and the payment trigger sits in your building contract, which is a document for your solicitor rather than this page.
If your shortfall is on land plus build, progress payments or practical completion, treat it as a construction file rather than applying every purchase-settlement answer on this page to it. The evidence, the valuation basis and the contract obligations are different enough to deserve their own review, and the development version of the problem is covered in the piece on the development valuation gap.
How can you reduce the risk before you sign or bid?
Pre-approval does not remove valuation risk, so the real protections are knowing your cash buffer, understanding the contract before you become unconditional, and testing the value where you can before you commit. This section is for the reader who arrived here before the problem rather than after it, and it is short because prevention genuinely is.
- Know what pre-approval actually covers. It generally assesses the borrower, subject to the lender later accepting the specific property as security and the final application details. It is not a promise about the valuation.
- Ask whether the property can be valued before you go unconditional. Some lenders and brokers can order an upfront valuation before a formal application. It is most valuable where the property is unusual, recently renovated, off the plan, or in an area with thin comparable sales.
- Set your buffer before you bid. Work out how much extra you could contribute if the lender accepted a lower value, and treat that number as your bidding ceiling rather than a figure to discover later.
- Rely on recent settled comparable sales, not asking prices. The valuer will, so reading the same evidence before you offer is the cheapest due diligence available.
- Have the contract reviewed before auction or unconditional signing. At most auctions there is no cooling off and no finance clause after the hammer falls, which is exactly why the auction buyer is the sharpest case on this entire page, and why the state consumer regulators publish contract guidance to read before bidding, such as Consumer Affairs Victoria's buying property guidance.
- Do not assume a second lender guarantees a second number. Valuation panels overlap, and two competent valuers reading the same settled sales can reach the same conclusion.
Who should you call, and in what order?
Your conveyancer first, your broker in parallel rather than afterwards, your accountant if an entity is involved, and the incoming lender to ask what a review would need. The order matters more than the list, and it is the part buyers most often get backwards, because everything downstream of the contract depends on what the contract allows.
- Your conveyancer or property solicitor, today. The settlement clock is a legal question, and every finance option in this guide is shaped by what your contract and your state allow. Ask specifically whether a finance clause is still alive, what the default consequences are, whether a written extension is worth requesting, and what capacity you signed in if a company or trust is the buyer.
- Your broker, in parallel rather than after. So you learn whether the gap is fundable while the legal position is being confirmed, not a week later. Running these in sequence is the single most common reason buyers arrive at the last option with days left.
- Your accountant, if a company, trust or business cash is involved. The entity question is usually settled faster than the finance question and changes the answer more, and it is the one call self-employed buyers skip.
- The incoming lender. To ask whether a valuation review is available, what evidence it would accept, whether it would consider a valuation you commission yourself, and how long it would take, so you can decide whether it fits inside your runway rather than assuming it does.
Where to get help
For neutral, independent information there is moneysmart.gov.au, the government's own consumer money guidance, which sells nothing.
Where cost is the barrier to legal advice rather than the advice itself, community legal centres and your state or territory Legal Aid commission are worth contacting, because a deposit and a resale claim are large enough that free or low-cost initial legal help is worth pursuing even if it only tells you how urgent your situation is.
Where the shortfall sits on top of existing financial difficulty, free and confidential financial counselling is available: the Small Business Debt Helpline on 1800 413 828 (sbdh.org.au) for business owners, and the National Debt Helpline on 1800 007 007 (ndh.org.au) for personal finances. Neither sells finance, and calling costs nothing.
A note on why the sequence is what it is. A conveyancer who confirms you have a live finance clause has just changed your entire position for the price of a phone call. One who confirms you are unconditional with a fixed settlement date has told you the funding conversation is urgent, which is worth knowing on the Monday rather than the Thursday. Either way, talking to them first costs nothing and forecloses nothing.
Scenario: a gap with an exit
What made that work is everything before the facility. The purchase still stacked up at the valuation, the buyer had security that was not the property being bought, the free options were tried first rather than skipped, the legal position was confirmed early, and the exit had a date on it rather than a hope attached to it. That is the only pattern in which raising the difference deserves to be called the answer.
Scenario: when funding the gap was the wrong answer
The two scenarios are the same week seen from different balance sheets. One buyer had security and a dated exit; the other had neither and a contract signed in a different market. The discipline this page argues for is refusing to treat the second case like the first, however available the finance is, and the section on when funding the gap is the wrong answer is the reason why.
A valuation under the contract price is a funding problem with a legal deadline attached, and the order you address it in decides the outcome. Answer the three forks first: whether a finance clause is still alive, whether the price or the valuation is the thing that is wrong, and whether this is a purchase shortfall or a refinance payout shortfall. Establish how much runway your contract actually gives you, because that decides which options are real. Write down the whole cost, not just the gap, remembering that duty runs on what you agreed to pay and does not fall with the valuation. Ask the seller before you price a facility, because the cheapest money here is money you do not borrow. Understand that the lender is working inside a prudential framework that expects conservatism, particularly on off-the-plan prices, so the number is not personal. Get the contract read, because deposit forfeiture is not the ceiling. Run the review, the renegotiation, the lender switch and the funding conversation in parallel. Check the public registers before you pay anyone anything. And where the difference can sensibly be raised against property, understand that consent, priority and a dated exit are the real constraints, not appetite, and that the exit is the part you agree before you draw, not after. Call your conveyancer today, run your options in parallel, and fund a gap only when the purchase still makes sense once it has been funded.
Key takeaway: the contract sets your deadline, the exit decides whether the gap is fundable, and if the valuation is right and the price was wrong, borrowing the difference makes the problem larger.Frequently asked questions
A lender lends against the lower of the contract price and its own valuation, so when the valuation lands under the price the approved loan falls and the difference has to come from somewhere before settlement. Nothing about the valuation changes what you signed: if the contract is unconditional, you are still obliged to settle. Three questions decide what happens next. Is your finance clause still alive. Is this a funding gap on a purchase that still stacks up, or a signal that the asset is worth less than you agreed to pay. And are you facing a purchase shortfall or a refinance payout shortfall.
A valuation shortfall is the gap between the price you agreed to pay and what a lender will advance once its valuer has assessed the property below that price. The complication is that Australians use the phrase settlement shortfall for two different problems. The purchase case is this one: the valuation lands under the contract price, so the approved loan will not reach settlement. The refinance case is different: the new loan comes in under the outgoing lender's payout figure, so the old loan cannot be discharged. Same phrase, different problem, different fix.
Only through a right you actually have. A disappointing number is not itself an escape route. The routes that exist are a finance clause that is still alive and properly exercised, a statutory right that applies to your particular purchase such as an off-the-plan disclosure right, or an agreement with the seller. If none of those apply and the contract is unconditional, walking away is a default, and the consequences are set by the contract rather than softened by the valuation. This is a question for your conveyancer or solicitor, and it is worth asking today rather than on the settlement date.
It depends on your contract and your state, and the differences are wider than most buyers expect. Under the Victorian standard conditions a seller cannot exercise default rights until a written default notice is given allowing 14 days to remedy, and if the contract then ends, the deposit up to 10 per cent of the price is forfeited and the seller may resell the property and recover any deficiency in the price on the resale as liquidated damages. In New South Wales the standard contract requires a notice to complete first, and the courts have treated 14 days as the minimum reasonable period. In Queensland time is of the essence from the outset and no notice is required at all. Two things buyers miss. Forfeiting the deposit is not the ceiling, because the deficiency on resale sits behind it. And terminating is not the seller's only option, because a seller may instead ask a court to compel you to complete, which is a question to put to your solicitor early.
Your contract sets the deadline, not the lender, and how much runway is left changes which options are real rather than theoretical. With three weeks or more, a valuation review, a lender switch and a funding conversation can all run at once, and a full application against another property you own is realistic. With about two weeks, the review and the switch compress and at least one of them will probably not finish. With less than a week, the constraint is documents and legal execution rather than lender appetite. Once the settlement date has passed you are inside the contract's default machinery, and that is a legal question before it is a finance question.
Generally no, and this catches people who assume the two move together. Duty is assessed on the dutiable value of the transaction, which is driven by what you agreed to pay, so a lender's valuation coming in under the contract price does not reduce the duty bill. There is a further trap if settlement runs late. The Victorian State Revenue Office states that late settlement interest forms part of the consideration for the transfer, is included in the dutiable value and is dutiable, which means a delayed settlement can increase duty rather than leave it alone. Rules and rates differ by state and duty is a question for your conveyancer and your revenue office, not a broker.
You can always ask, and whether it works depends almost entirely on the seller's alternatives rather than on your valuation. Ask early, in writing, through your conveyancer, and expect to be asked for the valuation itself. What makes a seller agree is a weak position elsewhere: a soft market, a property that has already been passed in or relisted, a seller who has bought elsewhere and needs this settlement, or a genuine belief that the next buyer's lender will produce the same number. What makes them refuse is a live back-up offer and an unconditional contract that already binds you. If your contract is unconditional you are asking a favour, not exercising a right, and it is worth knowing which one you are doing before you make the call.
You can ask the lender for a review, and a review can correct factual errors, missing improvements, a wrong land size and genuinely unrepresentative comparable sales. It cannot make a valuer adopt your price because you paid it. You are usually not the valuer's client, so evidence goes back through the lender that instructed the valuation. You can also pay for your own valuation, but no major lender publishes a policy on whether it will accept a borrower-ordered report, so the honest answer is to ask your lender before you spend the money rather than after. The professional body's complaints process is not a second opinion either: the Australian Property Institute states that its process cannot determine negligence or assess the accuracy of a valuation, and cannot resolve a difference of opinion about assessed market value.
No, but they are ordered by and for the lender, and the prudential guidance expects conservatism in defined places. APRA's guidance on residential mortgage lending tells lenders that on off-the-plan sales developer prices might not represent a sustainable resale value, so a prudent lender would make appropriate reductions in the off-the-plan prices when determining loan-to-value ratios, or seek independent professional valuations. Conservatism is the design rather than a conspiracy. The practical consequence is that a valuation is the lender's risk tool, so arguing with it as though it were an opinion about your taste in houses does not move it.
In principle yes, and it is the branch most answers to this question leave out. Bridging is a function rather than a single product: short term funding that covers a gap until a known event repays it, delivered through a second mortgage behind the incoming first mortgagee, a caveat-secured loan over a property you already own, or a private lending facility. The real constraints are consent, priority and exit rather than appetite. A caveat in particular is not a mortgage: land registries describe it as a notice that prohibits registration of other dealings and warn that it should not be seen as a viable alternative to registering the interest, it carries no power of sale of its own, and the lapsing mechanism and clock differ from state to state.
Two different questions hide inside that one, and separating them is where most content stops short. Registration consent and contractual consent are not the same thing. In New South Wales the Registrar General's published position is that subsequent mortgages no longer require the first mortgagee's consent to register, but that it is important to check the terms of the first registered mortgage, because that is a contractual matter between the parties. Queensland goes further: under the Property Law Act 2023, granting a second mortgage does not breach the first mortgage, despite any agreement to the contrary. In Victoria the first mortgagee usually controls the electronic certificate of title, so it keeps practical control even where formal consent is not required.
A company you control may be able to. A self managed super fund cannot. On the company side the timing is what catches people: the ATO states that a loan from a private company to a shareholder or their associate may be treated as a Division 7A dividend unless, by the company's lodgment day, it has been repaid or put on a complying loan, which requires a written agreement in place before that lodgment day and an interest rate at least equal to the Division 7A benchmark rate. Super is a harder no. The ATO's ruling on financial assistance explains that the SIS Act prohibits lending fund money to a member or a relative, and separately prohibits using fund resources to give any other financial assistance to them, including giving a guarantee or an indemnity for a member's benefit or a charge over fund assets. All of this is a question for your accountant before it is a question for a lender.
Check the registers before you pay anyone anything. ASIC publishes a professional registers search covering people and organisations registered or licensed to provide a service, searchable free by name, licence number, ACN or ABN, alongside registers of organisations and people banned or disqualified from credit activities. AFCA publishes a financial firm search so you can check whether a firm is a member, which matters because AFCA can only consider complaints about its members, and from FY26 AFCA no longer issues membership certificates and directs everyone to the search instead. Beyond the registers, the behavioural signals are consistent: a fee requested before any written terms exist, pressure to sign the same day using your settlement date as the reason, a suggestion to change who borrows so the loan is not regulated credit, and no real interest in how the facility gets repaid.
The contract of sale including the special conditions, the settlement date in writing, the valuation if you were given a copy, the incoming lender's approval and the approved amount, titles and current loan statements for any other property you or your entities own, entity documents where a company or trust is the buyer, and your conveyancer's direct contact. Above all, the exit: what repays the facility, and on what date. A file like this is judged on the exit rather than on the size of the gap, and having the pack assembled before the first call is usually what separates a week that works from a week that runs out.
You are generally still bound to settle, which is why this is the sharpest version of the problem: the contract was signed years before the valuation. The finance answer is the same as for any purchase shortfall, but the rights layer is different and it is state-based. New South Wales publishes a right to act where a material particular has changed and the purchaser is materially prejudiced, with 14 days from being notified. Queensland publishes a termination right where a change to the disclosure causes material prejudice, within 30 days of notification. Victoria's consumer regulator publishes a plan-registration right rather than a material-change right. Separately from all of that, where what was represented in the marketing turns out to be misleading, section 18 of the Australian Consumer Law prohibits misleading or deceptive conduct in trade or commerce and section 236 allows a person who suffers loss because of it to recover that loss, with an action able to be commenced within six years after the cause of action accrued. Which if any of these reaches your contract is a question for your solicitor, not a guide.
Through the exit you agreed before you drew it, which is why a shortfall lender asks about the exit before it asks about the amount. The three that hold up in practice are the sale of another asset that is already on the market or under contract, a refinance once the file has enough history for a mainstream lender to assess it, and the completion of a project that releases value. Mechanically, getting out means requesting a payout figure from the lender, which is the amount required to close the facility on a stated date, and then a discharge of the security once it is paid. Ask early what a payout figure includes and what discharge costs, because those are the numbers that decide whether the exit clears. The ways exits fail are just as consistent: relying on a refinance no lender has indicated an appetite for, leaving no room for the exit to slip, letting costs accumulate against thin equity, and setting the exit date on the day the facility expires.
Sometimes, and a finance guide that pretended otherwise would not be worth reading. If the valuation is right and the price was wrong, funding the difference settles a purchase above market value with borrowed money and a short-dated facility on top, and the exit has to survive that. Where there is no other property, no dated exit and no plan beyond hoping the market recovers, funding the gap makes the problem larger rather than smaller. The alternative is a legal and negotiation conversation, taken with advice, in which the default consequences written into your contract are weighed honestly against the cost of settling anyway.
Compare the maximum loan you expected before the low valuation with the maximum loan available after the lender applies its advance ratio and policy to the lower accepted value. The valuation difference and the loan reduction are different numbers, and the loan reduction is the one that sets how much extra cash you need. The worked example on this page shows the arithmetic with invented round figures. Get the revised number from the lender in writing rather than from a rule of thumb, because a changed ratio band, an insurance premium or a serviceability reassessment can move it again.
Not automatically. A low valuation can leave the lender willing to approve finance, but for a smaller amount than you need, and finance declined and finance approved for less than expected are not the same event. Whether the condition protects you depends on the exact wording of the clause, the amount it specifies, the lender's actual decision, and the notice steps and deadline in your contract. Get the lender's position in writing, put it and the clause in front of your conveyancer or solicitor, and ask what notice is required and when it expires, before you act on either assumption.
Potentially, and the structure matters more than the amount. A genuine gift, a repayable family loan, a guarantee and a family member borrowing separately are four different arrangements with different lender, legal and tax consequences. New debt in your name can change your serviceability, and Moneysmart warns that a guarantor may have to repay the whole loan plus interest and that the lender may repossess an asset used as security, which is why independent advice for the person helping is essential rather than polite. Disclose the arrangement to the incoming lender before the money moves.
Act before the maturity date, not after it. Request a current payout figure, identify exactly why the planned exit slipped, test whether an extension or a replacement refinance is genuinely available, and have your solicitor review the default and enforcement provisions while you still have choices. Protections can differ materially between regulated consumer credit and genuine business purpose finance, and sometimes selling an asset voluntarily, on a timetable you control, is a better decision than repeatedly extending expensive debt toward an exit that has stopped being real.
Construction shortfalls arise because the completed market value is not the same as the land price plus every building cost, variation and upgrade, and some of that spending adds less resale value than it cost. Ask the lender whether a full inspection or review is available and what evidence it will accept. The lending problem also sits beside the building contract: in Queensland, for example, the building regulator explains that the contractor can ask for final payment once practical completion is reached, so a valuation problem can collide with a builder payment deadline and needs lender, builder and legal review together.
Pre-approval does not remove valuation risk, because it generally assesses the borrower before the lender has accepted the specific property as security. Before bidding or signing unconditionally, know how much extra you could contribute if the lender accepted a lower value, ask whether the property can be valued before you become unconditional, rely on recent settled comparable sales rather than asking prices, and have your conveyancer explain the contract position, because at most auctions there is no cooling off and no finance clause after the hammer falls.
What sources support this guide?
This guide is built on primary sources: the published general conditions of the state standard contracts, APRA's prudential guidance on residential mortgage lending, the land registries of New South Wales, Victoria and Queensland, the Property Law Acts of Queensland and Victoria, the Victorian State Revenue Office on duty and late settlement interest, ASIC's guidance on when consumer credit law applies, its public registers and its media release on the proceedings described above, AFCA on membership and what it can consider, the ATO on Division 7A loans and on financial assistance from a self managed super fund, the Australian Consumer Law itself, the state consumer and land agencies on off-the-plan disclosure, the Australian Property Institute on what its complaints process can and cannot do, the Banking Code of Practice, Moneysmart on guarantor risk, and the Queensland building regulator on practical completion and final payment. Each was read again for this guide, and every fact is shown with its source beside it. Where a source does not publish a position, this guide says so rather than filling the gap.
| Source | What it supports | As at |
|---|---|---|
| Victorian standard contract general conditions, as published by the state consumer regulator | The written default notice and its 14 day remedy period, forfeiture of the deposit up to 10 per cent, the seller's right to resell and recover the deficiency as liquidated damages within one year, and the personal liability of a signatory for a company purchaser | Aug 2026 |
| Law Society of NSW standard land contract and published Supreme Court commentary; the REIQ standard contract | The NSW notice to complete requirement and the 14 day judicial benchmark, the 10 per cent deposit cap and the 12 month resale window; and Queensland time of the essence, the five business day extension, and the two year resale window | Aug 2026 |
| APRA, Prudential Practice Guide APG 223 Residential Mortgage Lending (June 2025) | The high loan-to-value risk statement including a capitalised LMI premium, the off-the-plan price reduction guidance, and the restatement of the serviceability buffer requirement that sits in APS 220 | Jun 2025, current Aug 2026 |
| State Revenue Office Victoria, duty payable on late settlement interest | That late settlement interest is part of the consideration for the transfer, is included in the dutiable value and is dutiable, and the interim carve-out for certain concessions, exemptions and the First Home Owner Grant | Aug 2026 |
| Office of the NSW Registrar General; Land Use Victoria; Titles Queensland Land Title Practice Manual | That subsequent mortgages no longer require first mortgagee consent to register in NSW and that the first mortgage's terms remain a contractual matter; that a mortgagee normally controls the electronic certificate of title in Victoria; and what a caveat is and is not | Aug 2026 |
| Property Law Act 2023 (Qld) s 125; Property Law Act 1958 (Vic) s 94; Real Property Act 1900 (NSW) s 74J; Transfer of Land Act 1958 (Vic) s 89A; Land Title Act 1994 (Qld) s 126 | That a Queensland second mortgage does not breach the first despite any agreement to the contrary; the tacking rule on further advances; and the caveat lapsing mechanisms in NSW, Victoria and Queensland | Aug 2026 |
| Australian Consumer Law, Schedule 2 to the Competition and Consumer Act 2010, s 18 and s 236 | The prohibition on misleading or deceptive conduct in trade or commerce, the right to recover loss caused by conduct contravening Chapter 2 or 3, and the six year period within which such an action may be commenced | Aug 2026 |
| ASIC, National Credit Code guidance, credit licensing guidance, professional and banned registers, and media release 24-243MR | When the Code applies and to whom, that loans to companies are not caught, how to search who you are dealing with, and the allegations and current status of the proceedings about a lending model said to be designed to avoid the Code | Oct 2020 to Jul 2026 |
| AFCA, complaints we consider and the financial firm search | That AFCA considers complaints about member firms including from small businesses of fewer than 100 employees, that membership can be checked directly, and that membership certificates are no longer issued | Aug 2026 |
| ATO, loans and other forms of credit (Division 7A); Self Managed Superannuation Funds Ruling SMSFR 2008/1 | That a private company loan to a shareholder or associate may be a Division 7A dividend unless repaid or on a complying loan by lodgment day, with a written agreement and benchmark rate required; and that the SIS Act prohibits lending fund money or giving other financial assistance to a member or relative, including a guarantee, indemnity or charge over fund assets | Aug 2026 |
| NSW Government, Queensland Government, Landgate and Consumer Affairs Victoria on buying off the plan | The material particular and material prejudice rights and their time limits where each state publishes them, and Victoria's plan-registration right | Aug 2026 |
| Moneysmart, going guarantor on a loan | That a guarantor may have to repay the whole loan plus interest, and that the lender may repossess an asset used as security if the guarantor cannot pay | Aug 2026 |
| Queensland Building and Construction Commission, handover and practical completion | That the contractor can ask for final payment once practical completion is reached, with at least five business days' written notice and the date generally flagged two to three weeks out | Aug 2026 |
| Australian Property Institute; Australian Banking Association 2025 Banking Code of Practice | What a valuer complaints process expressly cannot do and who has standing to bring one; and when a subscribing bank will give a customer a copy of a commercial property valuation | Feb 2025 to Aug 2026 |
Some things are deliberately not stated here because no source this guide could verify publishes them: whether any particular lender will accept a valuation you commission yourself, whether a low valuation on its own engages a finance condition, exactly how any particular lender treats a family gift, loan or guarantee, and the buyer-default and termination mechanics of the Western Australian and South Australian standard forms. Regulatory and contractual positions are summarised rather than reproduced in full, and none of this is legal, tax or financial advice. Standard-form contracts are amended from time to time and special conditions routinely override them, prudential guidance changes, revenue rulings and rates differ by state, court proceedings referred to are unresolved, and your own contract sets obligations this general guide cannot see. Confirm the detail with your conveyancer or solicitor, your accountant, and on the current government and registry pages, before you act.
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