What Happens When the Appraisal Comes Back Low?

In this business, you have way more wins than losses, but sometimes we have some losses. A most days are good, but sometimes we have bad days in real estate. And although we love to post about wins and positive results, there are also situations where things may not go so great. 

On a listing, sometimes an appraisal can come back below the purchase price that the buyer and seller agree to. That's a big obstacle to overcome. If the appraisal comes back only $2,000-$3,000 below, usually the buyer and seller can work it out. But when it's a bigger gap, say, $10,000-$15,000, then that is a different story.

Before we begin, be sure to read up on what the appraisal process looks like in the blog post below:

So, what do we do when the appraisal comes back low?

There are two options

1. We can give up and accept the deal is going to fall through

2. Fight to make it work

To fight an appraisal, there are a number of things you can do.

1.  You can dissect it line by line to make sure the appraiser didn't make any factual errors. 

2. You can also find comparable sales to show that this house is more comparable to other homes than what the appraiser used. 

These would support the purchase price that the appraiser didn't take into consideration.

3. You can then file a rebuttal with the buyer's lender to contest that appraisal to get the value amended based on the comparables we found. 

If that doesn't work or they don't change the appraised amount enough to overcome the hole, there is a fourth option to fight.

4. Get a new lender as the home buyer, or work with the home buyer to get a new lender as the seller. This way we can get a new appraisal ordered.

This can bring a drastically different appraisal than the original to help support the agreed sales price. 

The home buyer may be very willing to do this, because  they may also agree the appraisal is too low and don't want the deal to fall apart since they've invested so much time and emotion into it.