Why it matters
Your loan amount is based on the lesser of the purchase price and the appraised value. A gap between them becomes cash you must bring, on top of your down payment.
The four responses
In practice, most low appraisals resolve with one of these.
- Renegotiate the price, in whole or in part.
- Bring the difference in cash if the home is worth it to you.
- Submit a reconsideration of value with stronger, closer, more recent comparable sales.
- Exit under the appraisal contingency if your contract includes one.
Keeping perspective
An appraisal is one professional's supported opinion, not a verdict on the home. In fast moving or unusual markets, disagreement is common. Bring data, not frustration, and the conversation usually goes better.