Quick answer
A home appraisal is a lender-ordered opinion of value used to support the mortgage. If the appraisal is lower than the contract price, the buyer and seller may need to renegotiate or solve an appraisal gap.
An appraisal can become one of the most important steps between offer acceptance and closing. It helps the lender decide whether the home supports the loan amount.
Buyers and sellers should understand appraisal risk before negotiating price, credits, and contingencies.
What an appraiser reviews
The appraiser considers the property and recent comparable sales. Condition, size, location, upgrades, lot, and market activity all matter.
- Comparable sales
- Square footage
- Condition
- Location
- Lot size
- Bedroom and bathroom count
- Updates
- Market trends
Why appraisals can come in low
A low appraisal can happen when the contract price is ahead of recent sales, the comparable sales are weaker, or the property has condition issues.
- Rapid price changes
- Few comparable sales
- Overbidding
- Condition problems
- Unique property type
- Neighborhood differences
Options after a low appraisal
The available options depend on the contract, financing, cash available, and willingness of both sides to adjust.
- Renegotiate price
- Buyer brings more cash
- Seller credit or adjustment
- Challenge appraisal
- Cancel if allowed
- Change loan strategy
Prepare before the appraisal
Sellers can provide access and a clean home. Agents may provide relevant comparable sales, improvements, and property information.
- List upgrades
- Share permits if available
- Provide comparable sales
- Make access easy
- Address obvious condition issues
Frequently Asked Questions
Who orders the home appraisal?
The lender usually orders the appraisal during the mortgage process.
What happens if the appraisal is low?
The parties may renegotiate, the buyer may bring more cash, the seller may adjust, or the deal may be at risk depending on the contract.
Can sellers influence the appraisal?
Sellers cannot control the appraiser’s opinion, but they can provide clean access and useful information about upgrades and comparable sales.
Can Realty Plus help with appraisal-related professionals?
Realty Plus helps consumers find real estate agents and mortgage brokers by location.