Introduction: When a Low Appraisal Threatens Your Sale
You’ve found the right buyer, accepted a strong offer, and started moving forward toward closing—until you get the news every seller dreads. The home appraisal came in low. Suddenly, the buyer’s financing is at risk, negotiations shift, and the deal may feel uncertain.
While a low appraisal can be unsettling, it doesn’t have to derail the transaction. With the right strategy and a calm, informed approach, sellers can still move forward successfully. This guide breaks down seven powerful steps to take when your home appraisal comes in lower than expected, giving you a clear action plan to protect your sale and keep control of the process.
1. Understand Why the Home Appraisal Came in Low
Before taking action, take time to understand why the home appraisal did not match the contract price. Appraisers base valuations on:
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Recent comparable sales
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Property condition
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Market shifts
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Local demand trends
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Features and upgrades
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Size and layout
Occasionally, low appraisals happen because the market is cooling or because similar homes recently sold at lower prices. Other times, appraisers may miss key updates or rely on poor comps.
2. Review the Appraisal Report for Errors or Missing Information
A low home appraisal is not always a final verdict. Appraisers can make mistakes, overlook upgrades, or choose inappropriate comparable properties.
What to Check:
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Wrong square footage
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Missed renovations or improvements
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Incorrect bedroom or bathroom count
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Outdated or incomparable sales comps
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Poor adjustments to comparable homes
If you spot inaccuracies, you can challenge the appraisal or request a reconsideration.
How to Fix It:
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Gather documentation (receipts, permits, remodel photos)
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Provide a list of upgrades made
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Highlight superior features vs. chosen comps
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Suggest more accurate comparable sales nearby
This step alone can sometimes bring the value up enough to save the deal.
3. Request a Reconsideration of Value (ROV)
If you believe the home appraisal is genuinely flawed, sellers can work with the buyer and their lender to formally request a Reconsideration of Value.
What You’ll Need:
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Strong, recent comparable listings
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Proof of improvements
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Clear evidence of appraiser oversight
Lenders may send your documentation to the appraisal management company (AMC) for review. While not guaranteed, ROVs do sometimes result in revised values.
4. Renegotiate With the Buyer to Bridge the Gap
If the appraisal does not change, you still have options. A low home appraisal doesn’t automatically kill the deal—buyers and sellers can work together to close the price gap.
Common Negotiation Solutions:
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Split the difference between contract price and appraised value
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Buyer covers the difference in cash (if financially able)
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Seller reduces price to match appraisal
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Combination of price reduction + buyer cash
If the buyer truly wants your home—and inventory is low—they may be open to contributing.
5. Offer Seller Concessions to Keep the Deal Alive
Instead of reducing the price, you can offer smart concessions that help the buyer without shrinking your bottom line too much.
Examples Include:
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Covering some closing costs
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Offering repair credits
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Providing a one-year home warranty
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Paying for minor upgrades the buyer requests
These incentives help buyers feel more confident, especially when financing feels tight after a low home appraisal.
6. Consider Getting a Second Appraisal (If Allowed)
Depending on the loan type and lender, buyers may be able to order a second appraisal—especially if the first one appears inaccurate. This is more common with:
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Jumbo loans
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Conventional financing
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Certain lender programs
However, FHA and VA loans are stricter, as their appraisals typically stay with the property for months.
When a Second Appraisal Helps:
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Hot markets where values rise quickly
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Unique properties without good comps
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Homes with recent renovations
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Appraiser appears unfamiliar with the area
A fresh pair of eyes can produce a valuation closer to market reality.
7. Put the Home Back on the Market (Only If It Makes Strategic Sense)
If negotiations stall and the buyer can’t bridge the gap, relisting may be your strongest move—especially in areas where demand exceeds supply.
When This Is a Good Option:
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Other homes are selling above appraised values
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Buyer pool is strong
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Inventory is tight
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You received multiple offers initially
Before relisting, make sure your pricing, marketing, and presentation reflect true market value to avoid repeating the same issue.
Conclusion: A Low Home Appraisal Isn’t the End of the Road
Receiving a low home appraisal is stressful—but it doesn’t have to derail your sale. With the right strategy, sellers can challenge the appraisal, renegotiate terms, or reposition their home for a stronger offer.
The key is staying calm, informed, and proactive. Whether you request a reconsideration, collaborate with your buyer, or explore new opportunities, there are always solutions available.
Call to Action
Want help reviewing a low home appraisal or understanding your negotiation options?
Reach out to us at Realty Boris and we’ll guide you through the smartest next steps to keep your sale on track.
