What Happens If Your Home Doesn’t Appraise?
It’s one of those moments in a real estate transaction that can catch everyone off guard—the appraisal comes in lower than the purchase price.
If you’re buying, it feels like the deal might fall apart. If you’re selling, it feels like your home just lost value overnight. But here’s the truth: a low appraisal doesn’t have to mean the end of the deal. With the right approach, it can become just another step in the process.
Let’s break down what happens when an appraisal comes in short and what your options are—whether you’re the buyer, the seller, or somewhere in between.
First, What Is a Home Appraisal?
An appraisal is an unbiased estimate of a home’s value, conducted by a licensed appraiser, usually on behalf of the lender. It protects the bank from loaning more than a property is worth—and it gives buyers peace of mind that they’re not overpaying.
Appraisers evaluate recent sales in the area (called comparables or “comps”), the condition of the property, and its features to determine value.
What If the Appraisal Comes in Low?
Let’s say you agree to buy a home for $900,000, but the appraisal comes in at $870,000. That $30,000 difference can have real consequences.
Most lenders will only finance based on the appraised value, not the contract price. That means the buyer now has to cover the gap—or the seller needs to come down on price—or both sides need to meet somewhere in the middle.
Buyer Options When Facing a Low Appraisal
1. Renegotiate with the Seller
In many cases, sellers are willing to reduce the price to keep the deal alive—especially if they’ve already gone through inspections and taken the home off the market.
2. Pay the Difference Out of Pocket
If you still want the home and have the funds, you can choose to pay the appraisal gap in cash. But it’s important to make sure this makes sense long-term.
3. Walk Away (If You Have an Appraisal Contingency)
If you’ve included an appraisal contingency in your contract, you have the right to cancel the deal without penalty if the appraisal comes in low.
4. Dispute the Appraisal
In rare cases, buyers or agents can challenge an appraisal—especially if comps were missed or incorrect information was used. It’s a long shot, but it can work with solid evidence.
Seller Options When Appraisal Falls Short
1. Lower the Price
Sometimes, the easiest way to save the deal is to adjust your expectations and work with the new value.
2. Ask the Buyer to Cover the Gap
If there’s strong demand for your home, you might ask the buyer to bridge the difference. Just know it’s not always feasible, especially for first-time buyers.
3. Re-list the Home
If the deal falls apart, some sellers decide to put the home back on the market, hoping for a better appraisal next time—but that comes with risk.
How to Avoid Surprises
If you’re selling in Ventura County and your home is unique, upgraded, or in a rapidly appreciating area, I always recommend preparing for the appraisal ahead of time.
Here’s how I help clients stay one step ahead:
- Pre-listing valuations: I’ll give you an honest look at market value before you list.
- Appraisal packages: I work with sellers to provide appraisers with comps, upgrade lists, and local insights they might miss on paper.
- Realistic pricing strategies: It’s tempting to aim high, but pricing your home appropriately reduces the chances of an appraisal hiccup.
Bottom Line
Appraisals can feel stressful—but they don’t have to derail your transaction. Whether you’re on the buying or selling side, it’s all about understanding your options, leaning on your agent for guidance, and staying focused on the big picture.
In Ventura County’s dynamic market, experience matters—and I’m here to help you navigate every step with clarity and confidence.
Thinking about buying or selling? Let’s talk about what to expect in today’s market and how to stay one step ahead.
