What should I do if my house doesn’t appraise at the contract price?
- A low appraisal means the lender’s valuation came in under your agreed purchase price, which limits how much the bank will lend.
- Your main paths are renegotiating the price, paying the gap in cash, challenging the report through a reconsideration of value, or walking away if you have an appraisal contingency.
- Federal data shows roughly 8 to 9 percent of appraisals fall below contract in a normal market, and far more during price spikes.
- The right move depends on your contract terms, your cash position, and how badly you want the property.
If you are asking what should I do if my house doesn’t appraise, you are facing one of the more stressful moments in a real estate transaction. A low appraisal happens when the lender’s hired appraiser values the home below the price you and the other party agreed on.
Because most mortgages are capped at a percentage of the appraised value, the bank will only lend against the lower number, leaving a gap someone has to close. The good news: a low appraisal rarely kills a deal outright. It opens a negotiation, and you have several concrete options.
Here is the mechanics of why the gap matters. Say a lender approved you for an 80 percent loan-to-value mortgage on a $300,000 purchase. The bank planned to lend $240,000. If the appraisal lands at $285,000, the lender now caps its loan at 80 percent of that figure, or $228,000.
The $12,000 shortfall does not disappear; it shifts onto you unless the price drops. That is why the first thing to do is read the report closely, confirm the appraised value, and identify exactly how large the gap is before you react.
Why a low home appraisal happens in the first place
Appraisers value a property using recent comparable sales, condition, and local market data, so a number below your offer usually reflects something specific rather than bad luck.
In fast-moving markets, buyers bid above what recent comps support, and the appraisal simply catches up to reality. Other times the appraiser used weak comparables, missed a recent renovation, or overlooked sales that closed after the contract date.
According to Federal Housing Finance Agency data, the share of appraisals below contract price ran between 7 and 9 percent from 2013 to 2020, then spiked to 15 percent in 2021 as home prices climbed faster than valuations could follow.
Knowing the cause shapes which option makes sense for you.
5 options when your house doesn’t appraise
Once you have the report in hand, these are the realistic paths forward. Each carries a different cost and risk profile, so weigh them against your budget and timeline.
1. Renegotiate the purchase price with the seller
Asking the seller to drop the price to the appraised value is the cleanest fix when it works.
Many sellers prefer a smaller sale to restarting the listing, especially since a new buyer’s lender will likely order an appraisal that lands at the same number. Your agent can frame the report as objective evidence rather than a personal lowball.
A useful middle ground is meeting halfway: the seller trims the price by part of the gap and you cover the rest in cash, which keeps both parties moving toward closing without either side absorbing the full shortfall.
2. Cover the appraisal gap with extra cash
You can keep the original price and pay the difference out of pocket at closing.
If you agreed to $300,000 and the home appraised at $290,000, you bring the $10,000 gap on top of your down payment. This protects the deal but raises your cash outlay, so confirm the numbers leave you with healthy reserves rather than draining every account.
3. Challenge the report with a reconsideration of value
If you believe the appraisal contains errors, you can formally dispute it.
A reconsideration of value, or ROV, asks the appraiser to review the work using stronger comparable sales or corrected property details.
Five federal agencies, led by the Consumer Financial Protection Bureau, finalized guidance in 2024 requiring lenders to give borrowers a clear path to request one. Bring documented evidence; an ROV based on opinion alone rarely moves the number.
Strong support looks like three or four recent sales of similar homes within a mile, a list of upgrades the appraiser failed to credit such as a new roof or finished basement, and proof of any factual mistakes about square footage or bedroom count.
Submit it in writing and keep the tone factual, since the appraiser is correcting data rather than defending a judgment.
4. Order a second appraisal or switch lenders
A different appraiser may read the same property differently.
You can request a new appraisal, though your current lender may not accept it, or move to a lender who orders a fresh report. This costs several hundred dollars and adds time, so it makes sense mainly when you have real reason to think the first valuation was flawed.
5. Walk away using your appraisal contingency
If your purchase contract includes an appraisal contingency, a low number lets you exit without losing your earnest money.
This is the safety valve worth checking first. Backing out stings when you love the home, but overpaying for a property that will not support its own value is rarely a sound financial decision.
Review the contingency wording with your agent before the deadline passes, because most contracts give you a fixed window, often a week or two, to invoke it. Miss that date and the contingency can expire, leaving your earnest deposit at risk if you later try to leave.
How buyer and seller options compare
Both sides of the deal have leverage, but their best moves differ. The table below lines up the most common responses.
| Option | Best for | Cost | Risk |
|---|---|---|---|
| Renegotiate price | Buyers and sellers who want to save the deal | None | Seller may refuse |
| Pay the gap in cash | Cash-strong buyers | High out of pocket | Drains reserves |
| Reconsideration of value | Reports with clear errors | Low | May not change the number |
| Second appraisal | Suspected flawed valuation | Few hundred dollars | Delay, no guarantee |
| Walk away | Buyers with a contingency | Lost time | Restart the search |
Frequently asked questions about what to do if your house doesn’t appraise
Short answers to the questions buyers and sellers raise most often when a valuation comes in low.
How often do home appraisals come in below the offer?
Industry and federal figures generally put the rate under 10 percent in a balanced market, with early-2026 lender data near 8.6 percent. The share rises sharply during rapid price growth.
Can I dispute a low appraisal myself?
You can supply evidence, but the formal reconsideration of value request usually goes through your lender. Provide recent comparable sales and documentation of any improvements the appraiser missed.
Does a low appraisal affect my taxes?
Not directly, though property value influences other financial decisions. If you are sorting out your broader picture, our guide on taxable income and what counts is a useful primer, and so is our explainer on filing taxes when you don’t owe anything.
Who pays if the appraisal comes in low?
The buyer typically absorbs the gap unless the seller agrees to lower the price or the parties split the difference. The contract and negotiation decide the outcome.
Key takeaways
A low appraisal is a hurdle, not a dead end. Keep these points in front of you as you decide.
- Read your contract first; an appraisal contingency gives you the cleanest exit.
- Renegotiating the price is the most common and lowest-cost resolution.
- A reconsideration of value works only with hard evidence, not opinion.
- Match the option to your cash position and how much you want the home, not to panic.
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