Part of the mortgage application process is the home appraisal. A third-party appraiser inspects the home and figures out how much the home is worth, in a process that’s part-art and part science.

In a handful of cases, the appraised value is lower than the purchase price. So what?

A low appraisal represents a problem for buyers who are depending on financing to help them purchase a home. Lenders cannot finance a property for more than the appraised value. So unless you have extra money to fill the gap, a low appraisal could ruin your ability to purchase the home.

You can do one or more of the following:


Look at the appraisal report with your real estate agent and/or your lender to see if there are mistakes, or if the “comps” (homes that are similar to the house that sold recently) are valid. If there are any mistakes, ask your lender to have the appraiser look at the report and/or the house again.


If the appraiser won’t budge, you can return to the negotiating table and offer the seller a lower figure. It might be time for a reality check. After all, if the appraisal was lower than the price you were going to pay, chances are slim that the seller will find another buyer who doesn’t require a mortgage and can avoid that low appraisal issue.

Walk Away

If you have an appraisal contingency clause in your purchase contract (which is something most buying agents and real estate attorneys recommend), you have the right to cancel the deal due to a low appraisal. It might cost you your dream home, but… this could work in your favor in the long run.

Can you get another opinion? Most lenders do not allow borrowers to shop around for appraisers, so that is not a practical solution. Even if you could, you are not guaranteed anything, but it won’t hurt to ask your lender.

Read more about it at

Questions about rates today, or about your specific situation regarding mortgage approval? Contact me today!