How to Handle Low Appraisals as a Buyer or Seller

In real estate, a home’s appraisal can make or break a deal. When the appraisal comes in lower than the agreed purchase price, both buyers and sellers are faced with tough decisions. Understanding your options—and how to respond strategically—can help keep the transaction on track.

Why Low Appraisals Happen

• Shifting market conditions – Comparable sales (“comps”) may not yet reflect rising prices.

• Unique property features – Custom upgrades or renovations may not carry the same value for appraisers.

• Limited comps available – If few recent sales exist, the appraisal may come in conservative.

  
  

  Options for Buyers

• Renegotiate the PriceUse the low appraisal as leverage to request a price reduction that aligns with the appraised value.

• Bring More Cash to ClosingIf you really want the property, you can cover the gap between the appraisal and the purchase price out-of-pocket.

• Challenge the AppraisalAsk your agent to provide stronger comps and request a reconsideration from the lender.

• Walk Away (if contingencies allow)If the contract includes an appraisal contingency, you may choose to cancel without penalty.

Options for Sellers

1. Lower the PriceThis can keep the deal alive and help avoid the risk of the home sitting longer on the market.

2. Request a Re-AppraisalIf you believe errors were made or strong comps were missed, challenge the appraisal.

3. Offer Seller ConcessionsInstead of lowering the price, you could offer to help with buyer closing costs to bridge the gap.

4. Find a New BuyerRiskier, but sometimes another buyer (or lender) may appraise the property differently.

Key Takeaway

Low appraisals don’t have to mean the end of a deal. With the right approach—whether that’s renegotiation, providing better comps, or offering concessions—buyers and sellers can find solutions that work for both sides.