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What happens if the appraisal comes in low

On a financed purchase, the lender lends against the appraised value, not the contract price. If the appraisal lands below the contract, the gap is real money and somebody has to cover it.

Your four options

Renegotiate. The most common outcome. A seller facing the same problem with the next buyer often meets somewhere in the middle.

Cover the difference in cash. The buyer brings the gap to closing. The loan is unaffected; your down payment simply grows by the shortfall.

Walk away. If the contract has an appraisal contingency, this is what it is for.

Challenge the appraisal. Sometimes right, frequently attempted for the wrong reasons.

How a reconsideration of value actually works

A reconsideration of value — an ROV — is a formal request through the lender asking the appraiser to consider information they did not have.

What works:

• A closed sale the appraiser missed that is genuinely more comparable than one they used
• A factual error about the subject — wrong square footage, wrong bedroom count, a permitted

addition treated as unpermitted, a missed renovation

• Documentation the appraiser did not receive: permits, a survey, an improvement list

What does not work:

• "The number needs to be $X for the deal to work"
• Listings rather than closed sales, in most cases
• Sales that are newer but less comparable
• Arguing the conclusion without offering different evidence

The distinction is simple: an ROV is not an appeal, it is new evidence. An appraiser who reviews genuinely better comparables may revise. An appraiser asked to reconsider their judgement without new facts will decline, and should.

Since 2024, lenders selling to Fannie Mae and Freddie Mac have been required to maintain a published process letting borrowers request an ROV, and to tell borrowers it exists. Ask your loan officer for it in writing.

Read the report before you argue

Get the copy you are entitled to and look at three things.

The comparables. Are they genuinely like your property — same market, similar size, similar condition, recent? Or did the appraiser reach across a boundary that matters?

The adjustments. Do they make sense in direction and rough magnitude?

The subject description. Is the square footage right? Bedroom and bathroom count? Is the garage conversion, pool, dock or addition recorded?

Factual errors are the strongest ground you have, and they are more common than people expect — often because the county record the appraiser started from was itself wrong.

In South Florida specifically

Three recurring causes of a genuinely wrong low number here:

Postal city treated as market. Large parts of Palm Beach County have mailing addresses that do not match the community. An appraiser unfamiliar with the area can pull comparables from an entirely different market a mile away.

Waterfront treated as a checkbox. Dockage capacity, water depth and bridge clearance produce large differences between properties that look equivalent on paper.

Acreage improvements missed. Barns, paddocks, workshops and outbuildings can carry meaningful value and appear in records as nothing more descriptive than "outbuilding".

If the number is right

Sometimes it is. A defensible appraisal that lands below an optimistic contract price has told you something true and slightly expensive, which is what you paid it for. An appraiser who moves under pressure is worth nothing to anybody — including, eventually, to you.

What is a home appraisal? · How appraisers choose comparables · Litigation support and review

Matt Thoren, State-Certified Residential Appraiser. We have completed 391 field reviews of other appraisers' reports. 561-853-2129 · Residential only.