What to Do When a Home Appraisal Comes in Low

You found the perfect home. You made an offer. The seller accepted. Things are moving fast — and then it happens: the appraisal comes in lower than expected.

If you’re like most homebuyers, this moment can feel like a major setback. But don’t panic — a low appraisal doesn’t mean the deal is dead. At Rapid Home Loan, we’ve helped buyers navigate this situation successfully, and we’re here to help you do the same.

Here’s what you need to know — and how to respond — if your appraisal comes in low.

🏡 First, What Is a Home Appraisal?

A home appraisal is an unbiased estimate of a property’s fair market value, typically conducted by a licensed appraiser on behalf of your lender. The appraisal protects you and your lender by ensuring the home is worth what you’re paying for it.

When an appraisal comes in lower than the purchase price, it can cause problems for financing — especially if you’re using a mortgage.

🚩 Why a Low Appraisal Is a Problem

Lenders will only lend based on the appraised value, not the contract price. That means if the appraisal is lower, you might have a financing shortfall.

Example:

Purchase price: $350,000
Appraised value: $330,000
Loan is based on $330,000 — not $350,000
You may need to cover the $20,000 difference out of pocket

✅ What to Do if the Appraisal Comes in Low

1. Review the Appraisal Report

Ask your lender (or Rapid Home Loan) for a copy of the report. Review it for:

Missing or incorrect property details
Inappropriate or outdated comparable sales
Signs the appraiser wasn’t familiar with the local market

2. Dispute the Appraisal (Request a Reconsideration of Value)

If you find issues, your lender can submit a Reconsideration of Value (ROV). This is essentially a formal request to reassess the appraisal using better or more accurate comps.

At Rapid Home Loan, we help our clients build strong ROV cases with proper market data and a clear explanation.

3. Negotiate with the Seller

If the appraisal stands, try negotiating with the seller. They may be willing to:

Lower the price to match the appraised value
Split the difference with you
Offer seller concessions to cover closing costs, freeing up your cash

4. Bring More Cash to Closing

If you have the funds, you can make up the difference between the appraised value and the purchase price with a larger down payment. This keeps the loan-to-value ratio in line with lender requirements.

5. Walk Away (as a Last Resort)

If you included an appraisal contingency in your contract, you may be able to cancel the deal without penalty. While not ideal, walking away could be better than overpaying for a property.

💡 How to Avoid a Low Appraisal in the First Place

Work with an experienced local agent who prices offers competitively
Avoid bidding too far over list price in a competitive market
Provide a strong offer package with comps that support your price
Partner with a proactive mortgage team (like Rapid Home Loan) who can move fast if problems arise

🏁 Rapid Home Loan Can Help You Navigate the Unexpected

A low appraisal is frustrating — but it’s also fixable. At Rapid Home Loan, we work closely with appraisers, real estate agents, and underwriters to find the best solution for your situation. Whether it’s disputing the valuation, adjusting your loan structure, or negotiating with the seller, we’ve got your back.