What the Bank Valuation Is Used For

The bank commissions a valuation to support its lending decision; it is not simply a confirmation of the seller’s asking price. The valuer considers the property, condition, location and available market evidence using the bank’s instructed scope. Financing is then calculated under the lender’s policy and applicable regulatory limits, which may use the lower supported value rather than the negotiated price. Compare suitable listings in the MKDXB property directory before signing, but remember that an asking price and a bank valuation serve different purposes.

• A valuation supports the lender’s risk decision
• The agreed price is not automatically the finance value
• Comparable asking prices are not completed transaction evidence

How a Lower Valuation Creates a Cash Gap

If the valuation is below the purchase price, the approved loan may be smaller than the buyer expected even when the borrower’s income remains acceptable. The difference can increase the cash contribution required at completion, in addition to transaction fees and other costs. This is why a buyer should not use every available dirham for the initial deposit. The gap should be calculated immediately and compared with the buyer’s reserves rather than covered through unplanned borrowing that could affect affordability or final approval.

• A lower valuation can reduce the available loan
• The buyer may need more cash at completion
• Unplanned debt may weaken affordability

Review the Options Before Reacting

The practical options may include negotiating the price, increasing the buyer’s cash contribution, asking whether a valuation review is permitted, applying with another lender or leaving the transaction where the contract allows. None of these outcomes is automatic. A second lender may still reach a similar value, while switching banks can add time and new costs. Review the seller, property and project context through the MKDXB developer directory where relevant, then obtain written guidance from the lender and review the contract before changing the payment plan.

• Renegotiation depends on both parties
• A valuation review is not guaranteed
• Switching lenders can add time and cost

Build a Valuation Contingency Before Signing

Before signing, ask when valuation will occur, who pays for it, how long the report supports the application and what the contract says if finance is insufficient. Keep a separate reserve for a modest valuation shortfall and transaction expenses. For help comparing the agreed price, finance timeline and property file, contact MKDXB before a non-refundable commitment. The purpose is not to predict the valuer’s number, but to ensure that one lower figure does not make the transaction impossible.

• Order valuation early where the process allows
• Keep a separate cash contingency
• Review finance clauses before signing