A bank-loan valuation estimates the realisable value of a property as security, prepared by a valuer empanelled with that bank — not the price you would list it for. Expect the report within a week of the site inspection for a single property.

What documents does the valuer need?

  • Title deed / sale deed and the latest property-tax receipt
  • Approved building plan and occupancy or completion certificate
  • 7/12 extract, property card or equivalent land record
  • For industrial property: layout, built-up area statement and machinery list
Built-up area is measured against the sanctioned plan; deviations reduce the value a bank can lend against.
Built-up area is measured against the sanctioned plan; deviations reduce the value a bank can lend against. Photo: Adityamadhav83 · CC BY-SA 3.0 · Wikimedia Commons

What does the valuer check on site?

Boundaries against the deed, built-up area against the approved plan, construction quality and age, encroachments, access, and use compared with permitted use. Deviations from the sanctioned plan reduce value or make the property unacceptable as security.

What pulls a bank valuation below the asking price
  • Unapproved built-up areaup to 15%
  • Location and marketabilityup to 10%
  • Age and conditionup to 8%
  • Title and encumbrance issuesup to 5%

Illustrative deductions a valuer may apply. Actual figures depend on the property and the sanctioned plan.

Why is the bank value lower than the asking price?

Asking prices include negotiation room; the valuer uses transacted evidence, ready-reckoner rates and rental yields, then applies a realisable-value view. Most banks then lend against a margin (typically 60–75 per cent of realisable value).

The valuer measures the built-up area against the sanctioned plan; anything unapproved is excluded from the lendable value.
The valuer measures the built-up area against the sanctioned plan; anything unapproved is excluded from the lendable value. Photo: Nicolas Vigier · CC0 · Wikimedia Commons

How often does a bank revalue?

RBI guidelines require periodic revaluation — commonly every three years for large exposures and whenever an account is restructured or classified as NPA. See Asset & Business Valuation.