What happens if the appraisal comes in low?

A quick, straight answer to a question buyers and sellers ask me often.

Direct AnswerA low appraisal means the lender values the home below your contract price, so it will only lend based on the lower figure — leaving a gap. You have several options: the buyer can pay the difference in cash, the parties can renegotiate the price down, the difference can be split, the appraisal can be challenged with new comparable sales, or, if there is an appraisal contingency, the buyer may cancel. A low appraisal is common and usually solvable; the outcome depends on negotiation and how badly each side wants the deal.

Information current as of 2026.

Your options when the appraisal is low

When an appraisal comes in low, the lender bases the loan on the appraised value, not the contract price, creating a shortfall the buyer must cover or the parties must resolve. The common paths: the buyer makes up the difference in cash; the seller agrees to lower the price to the appraised value; the two sides meet in the middle; the agent submits a rebuttal with stronger comparable sales to challenge the appraisal; or, with an appraisal contingency in place, the buyer cancels and recovers the deposit. The best move depends on the size of the gap, each party's motivation, and the strength of the comps.

We cover each path in detail in our guide on how to handle a low appraisal in the Conejo Valley.

Frequently Asked Questions

Can I challenge a low appraisal?

Yes. Your agent or lender can submit a reconsideration of value with additional or stronger comparable sales and supporting information. It does not always succeed, but it is a legitimate first step when you believe the appraisal missed the mark.

Does the seller have to lower the price after a low appraisal?

Not automatically. Price is negotiable. The seller may lower it, the buyer may cover the gap, or they may split the difference. If neither side budges and there is an appraisal contingency, the buyer may cancel.

What is an appraisal contingency?

It is a contract provision letting the buyer renegotiate or cancel — and typically recover the earnest money — if the home appraises below the contract price. Whether you have one depends on your purchase agreement.

Primary sourcesCFPB — Appraisal. General information only — verify current figures and confirm legal, tax, or financial questions with a licensed professional.