Understand Why the Value Came in Low
Ask for a copy of the appraisal report and review the comparable sales used. Sometimes an appraiser may have used outdated comparables or missed a recent renovation. Understanding the reasoning is the first step before deciding how to respond.
Requesting a Reconsideration
If you find factual errors or believe key comparables were missed, you can ask the lender or appraiser to reconsider the value with additional information. This does not always work, but it is worth trying if you have solid supporting evidence like recently sold similar units in the same building.
Renegotiating the Purchase Price
If you are buying and the appraisal comes in below the agreed price, you may be able to renegotiate with the seller, especially if your financing is now at risk. This depends on market conditions and how motivated the seller is, so your agent's negotiation skills matter here.
- Share the appraisal findings
- Ask seller to meet in the middle
- Consider a second appraisal if justified
Covering the Gap With More Cash
Sometimes the simplest path is bringing additional cash to the deal to cover the gap between the appraised value and the purchase price, since the lender will only finance based on the lower of the two amounts.
Ordering a Second Appraisal
In some cases, getting a second independent appraisal makes sense, particularly if the first one seems clearly out of line with recent sales. This costs extra and does not guarantee a different result, so weigh the cost against how much is riding on the outcome.
Frequently asked questions
- Can I choose a different appraiser if I disagree with the value?
- Usually the lender controls the appraisal process, but you can request a review or a second opinion in certain circumstances.
- Does a low appraisal affect my ability to refinance?
- Yes, since refinancing is based on current value, a lower appraisal means less equity available to borrow against.
- Is it common for appraisals to come in below the purchase price?
- It happens, particularly in fast moving markets where offers exceed recent comparable sales, so it is worth being financially prepared for the possibility.