When selling a property in Cape Town, few things unsettle sellers more than hearing that the bank valuation has come in below the asking price or accepted offer. It feels like a setback — but in reality, it is a common and predictable part of the property sales process, especially in a price-sensitive market.
Understanding why this happens and what it means can save a deal from collapsing and help sellers price more strategically from the outset.
Why Valuations Often Come in Below Asking Price
A valuation is not an opinion — it is a risk assessment. Banks and lenders base valuations on recent comparable sales, not listing prices or emotional attachment.
Common reasons include:
1. Overpricing at Listing Stage
Many Cape Town properties are listed above realistic market value to “test the market.” The problem? Valuers don’t test markets — they measure them. If nearby homes sold for less, the valuation will follow suit.
2. Conservative Bank Valuations
South African banks remain cautious. Even in stable suburbs, it’s normal for valuations to be 5–10% below asking price, particularly where market conditions are flat or shifting.
3. Market Conditions and Buyer Behaviour
If properties in your suburb are sitting longer on the market or selling after price reductions, valuers take that into account. Days on market matter.
4. Property Condition or Missing Documentation
Unapproved alterations, outdated finishes, or missing building plans can drag a valuation down — regardless of how good the home looks online.
How a Low Valuation Affects the Sale
A valuation below the asking price doesn’t automatically kill the deal — but it changes the dynamics.
Reduced Bond Approval
Banks will lend based on the lower valuation, not the purchase price. This means:
The buyer must increase their deposit, or
The purchase price must be renegotiated
Renegotiation Becomes Likely
In Cape Town, renegotiations after valuations are normal. Sellers often have to choose between:
Adjusting the price, or
Losing the buyer and starting over
Risk of the Sale Falling Through
If the buyer cannot cover the shortfall and the seller won’t budge, the deal collapses — often resulting in longer time on market and lower future offers.
Is This Common in Cape Town?
Yes — but it depends on the area.
High-demand zones (Atlantic Seaboard, City Bowl): valuations often align closely with asking prices due to demand pressure.
Suburban and mid-range markets (Southern Suburbs, Northern Suburbs): valuations below asking price are far more common, especially where sellers overprice.
In most cases, a low valuation is a signal that the property was priced outside the true market range.
What Sellers Should Learn from a Low Valuation
A valuation below asking price is not personal — it is market feedback.
Properties that ignore this feedback tend to:
Sit longer on the market
Undergo multiple price reductions
Ultimately sell for less than if they were priced correctly from day one
Correct pricing attracts more buyers, stronger offers, and smoother bond approvals.
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Lake Properties Pro-Tip
A realistic asking price is your best defence against low valuations. At Lake Properties, we price homes using current comparable sales and lender expectations, not inflated optimism — because the goal isn’t just to list your property, it’s to get it sold without financing complications.
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Russell
Lake Properties
ww.lakeproperties.co.za
info@lakeproperties.co.za
083 624 7129
