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Baird & Warner

Your Appraisal Came In Lower Than The Sale Price. What Now?

An unexpectedly low appraisal can throw a wrench in the home sale process. If the appraisal on the home came in well below the sale price, here are the primary options to explore.

Request Another Look

If a strong case for a higher appraisal can be made using comparable nearby properties (ideally, properties even more comparable than those used in the first appraisal), then asking to submit those in a Reconsideration of Value (ROV) could be worthwhile. A full second appraisal may be necessary, if permitted by your lender. Remember, however, that there’s no guarantee that a second appraisal would yield a different outcome — statistically, most do not, which would be bad news for both the buyers and sellers. It may be worth saving that time and effort in favor of the next option.


Of course, the easiest way to bridge the appraisal gap is for the buyer to cover the difference in cash. Obviously, that’s not ideal for the buyer and often not feasible for their situation. However, it is worth asking if the seller will meet you halfway by lowering the sales price slightly or making other concessions to help keep the offer more manageable on your end. As the seller, the more interest you’ve seen in your home, the less leeway you need to offer in this scenario. Even in a busy market though, quickly finding a modest compromise with this buyer could still be highly beneficial for other factors, such as timing.

Move On For a Better Deal

While it’s far from ideal, having an appraisal contingency included in your original buying offer would allow you to walk away from the deal in the event of a low appraisal. This could get you a full refund of your earnest money deposit. If the negotiation hasn’t provided a mutually agreeable path forward, this is the protection to have in place which will allow you to find a better fit at minimal loss. Meanwhile, from the seller’s perspective, it often makes sense to walk away from the deal and wait for a better one, especially in a low inventory market where offers may be plentiful.