A SMSF intends to sell its residential rental property to its members. A LRBA is in place. The members are seeking funding from a financial institution via a broker who has obtained a CoreLogic report over the property for an assessed value. The purpose of the report states as "mortgage security (refinance)". The report states a Risk Analysis for Property Risk as 419/1000, and Market Risk as 120/1000. The disclaimer states that the report is not an accurate representation of the Market Value, as defined. Furthermore, the report specifically refers to its user as being the "mortgage insurance provider". The SMSF members want to rely on this report to enter into a "Buy" contract at the assessed value.

My issues:

1 ATO accepts Forecast Standard Deviation, FSD, of not more than 10% from RP Data report for market value. The Property Risk of this report goes beyond that level

2 the report is prepared specifically for the purpose of mortgage insurance, instead of a related party purchase

3 the members are wanting to reduce the assessment of stamp duty and reduce the borrowing as well. They are at liberty to choose the lowest possible sale value, provided it is at "arm length". How many independent valuations should they obtain so as to strike a balance

The trustees/members of the SMSF want me to give them clearance to proceed based on this report. I am aware that an independent real estate agent has provided a market appraisal, based on open market, at $1,250,000. I am uncomfortable with this proposal.

Can I have a second opinion please. I attach extracts of the disclaimer.