What Happens If a Home Appraisal Comes In Low?
How to respond if a bank appraisal comes in below the purchase price or expected value, and when a second opinion makes sense.
A low appraisal in a financing context usually means
A low appraisal in a financing context usually means the lender will only advance a mortgage based on the appraised value, not the purchase price. The buyer may need to make up the difference, renegotiate, or walk away depending on the contract.
Ask the mortgage broker or lender what reconsideration of
Ask the mortgage broker or lender what reconsideration of value (ROV) process is available. Typically you would submit additional supporting comparable sales and any factual corrections.
In some cases a second appraisal from a different
In some cases a second appraisal from a different qualified appraiser is appropriate, particularly if the first appraisal was a desktop product, if the comparables look weak, or if the property has unusual features the first appraiser may not have weighted correctly.
A low appraisal is not always wrong
A low appraisal is not always wrong. It may reflect a softening market, recent sales evidence that the seller was not aware of, or an over-optimistic listing price. Treat it as data, not as a personal verdict.
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