Appraisal Came In Low — Here’s Exactly What Happens and How Sellers in Georgetown, ON Win

What happens if the appraisal comes in low?

What happens if the appraisal comes in low? Here’s the brutal truth sellers in Georgetown need now.

Quick answer up front

If the appraisal comes in lower than the agreed sale price, the lender will base the mortgage on the lower number. That creates a shortfall the buyer must cover or the deal risks collapse. As a seller in Georgetown, ON, you have options: renegotiate price, accept a buyer with more cash, provide comps and request a reconsideration, or relist. Move fast. Hesitation kills deals.

Why appraisals matter more than you think

An appraisal is not a home inspection. It’s a lender’s tool to protect their loan. Appraisers compare recent sold prices for similar homes (comps), adjust for differences, and deliver a value. Lenders use that value to set loan amount. If the appraised value is lower than the contract price, the lender won’t loan the difference.

For Georgetown sellers, this matters because local market activity can push sale prices above what public records show. When bidding wars or emotional buyers drive prices up, appraisals can lag behind. The result: a perfectly good contract meets a conservative number.

Common scenarios when appraisals come in low in Georgetown

• Buyer offers $850,000; appraisal is $800,000. Lender funds on $800K. Buyer must cover $50K or renegotiate.
• The buyer’s mortgage condition is strict. If they can’t cover cash, the buyer may ask for a price reduction or back out.
• The buyer finds another lender or gets a second appraisal. Sometimes second appraisals come up — sometimes not.

Georgetown’s market mix — historic cottages, mid-century builds, and new subdivisions — means comps can vary block to block. That raises the chance of appraisal variance.

Immediate steps for sellers when appraisal is low

1. Stay calm and act fast. Time kills options.
2. Ask your agent to get the appraisal report immediately. Review the comps used. Look for errors: wrong lot size, incorrect bedroom count, outdated comps.
3. Provide a Comparable Sales Package to the appraiser and lender: better comps, recent upgrades, permits, renovation receipts, and a market activity summary showing pending sales or multiple offers.
4. Negotiate with the buyer: agree to split the gap, reduce price to the appraised value, or ask the buyer to bring additional cash. Be decisive.
5. Buyer requests reconsideration of value (ROV). Your agent can supply stronger local comps and corrections. This sometimes pushes the appraisal up.
6. Consider a seller credit towards the buyer’s closing costs rather than reduce the price.
7. If all fails, prepare to relist. Price it to reflect true market value and avoid relying on a single emotional offer.

How to challenge a low appraisal — step-by-step

• Review the report: Identify factual errors (square footage, number of bedrooms, condition, lot). Errors are often the fastest wins.
• Gather stronger comps: Choose sales within 90 days, same neighbourhood, same style, similar lot size and condition. Georgetown specifics: use comps from Georgetown and nearby Halton Hills, not distant Milton or Acton unless identical.
• Submit a formal Reconsideration of Value to the lender with your evidence. Include photographs, MLS pages, permits, and invoices.
• Ask the buyer’s mortgage broker to request a second appraisal or a review from the lender’s appraisal desk.

A successful challenge depends on solid comps and facts. Emotional appeals don’t sway underwriters.

Pre-listing moves that prevent low appraisals

• Get a pre-listing appraisal or broker price opinion. Know the floor before you list.
• Fix obvious inspection issues. Appraisers adjust value for condition. Address roofing, HVAC, water damage before listing.
• Pull permits and organize renovation receipts. Legal upgrades increase confidence for appraisers.
• Stage and photograph to match the marketed features in MLS. Appraisers look at marketed facts and MLS descriptions.
• Price smart: an accurate listing price aligned with comps reduces gap risk.

Negotiation scripts that work (use them, don’t memorise)

• If buyer can bring cash: “We accept the buyer’s cash offer to bridge the appraisal gap. We need confirmation of funds within 72 hours.”
• If splitting the difference is on table: “We’ll reduce $X and the buyer brings $Y. Final contract amendment executed within 48 hours.”
• If using ROV: “We’ve provided corrected comps and invoices to the appraiser. We’ll wait 3 business days for a lender review. If no change, we pursue Plan B.”

Be firm, simple, and fast. Sellers who dither lose leverage.

When to accept a low appraisal and when to walk away

Accept the appraisal and move forward when:

• The buyer is strong, willing to make up the difference in cash, or remove financing condition.
• You value a guaranteed close over a small price premium.
• Market conditions are cooling and relisting risks losing momentum.

Walk away when:

• The buyer cannot cover the gap and demands a large price cut.
• The appraisal exposes systemic issues with how you priced the home.
• You can relist and expect to net the same or more after relisting costs.

Your agent should model net proceeds both ways. Numbers remove emotion.

Appraisal vs. inspection — why both matter to sellers

• Inspection = condition. Done for the buyer to know defects. It rarely affects loan amount directly.
• Appraisal = value. Done for the lender to secure the loan.

A squeaky-clean inspection can support value, but appraisal comparables drive the number. For Georgetown homes with recent upgrades, provide evidence that improvements were completed to code and add comparable value.

The Georgetown twist — local points sellers must know

• Small neighbourhood swings matter. A renovated Rockwood Road bungalow isn’t the same as an older property on Guelph Street. Use local comps, not regional averages.
• Pending sales in Georgetown can show momentum. Provide appraisers with pending and conditional sales when allowed.
• Renovations without permits hurt appraisers’ confidence. Get retroactive permits if possible.
• Schools, transit, and new infrastructure projects in Halton Region can affect appraisals. Create a short market brief highlighting local positives.

Quick checklist for sellers facing a low appraisal

• Request full appraisal report now.
• Verify factual data (sq ft, beds, baths, lot size).
• Provide better comps and renovation documentation.
• Ask buyer for proof of funds if they’ll bridge the gap.
• Negotiate quickly: split, reduce, credit, or relist.
• Consider pre-listing appraisal next time.

Final play: control the narrative before the number controls your sale

The appraisal is a number. You control everything that leads to that number: listing price, comps, condition, permits, and speed of response. In Georgetown, local nuance moves that number. If you want to avoid surprises, prepare before listing. If you face a low appraisal, act fast, use data, and force decisions. Hesitation transfers leverage to buyers.

Contact and local expertise

If you’re selling in Georgetown, you need a local agent who knows which comps matter and how to fight a low appraisal. For direct help, contact: tony@sousasells.ca | 416-477-2620 | https://www.sousasells.ca

FAQ — Appraisals, inspections, and low appraisals in Georgetown, ON

Q: Can I force the lender to accept a higher appraisal?

A: No. You can submit a Reconsideration of Value with better evidence. The lender may order a review or second appraisal. You cannot force acceptance; you can only provide facts that persuade.

Q: How long does an appraisal reconsideration take?

A: Typically 3–10 business days depending on lender workload. Faster when your agent and the buyer’s broker coordinate and submit a clean package.

Q: Will a low appraisal cancel my sale automatically?

A: Not automatically. If the buyer’s mortgage has a financing condition that ties to appraisal, the buyer can back out unless they waive the condition or cover the shortfall.

Q: What’s the difference between market value and appraised value?

A: Market value is what a buyer will pay in the current market. Appraised value is the lender’s professional opinion based on comps and condition. They often match, but in hot markets appraisals can lag.

Q: Can the seller pay the buyer the difference?

A: Yes. Sellers can reduce the price or provide a cash concession, but lenders usually require the final sale price reflect reality. Concessions must be documented and approved.

Q: Should I get a pre-listing appraisal?

A: Yes. A pre-listing appraisal or broker price opinion gives you a realistic floor before offers arrive. It reduces surprise gaps.

Q: Do home inspections affect appraisals?

A: Inspections report condition. Appraisers look at condition too, but they value based on comps. Major defects found in inspections can reduce appraised value if they affect marketability.

Q: How common are low appraisals in Georgetown right now?

A: Frequency rises when sale prices increase rapidly or when unique homes lack direct comps. Local market momentum and bidding wars create risk. Your agent should monitor local sold data to predict appraisal risk.

Q: What documentation helps most in a reconsideration?

A: Recent identical comps, signed permits, invoices for renovations, photos, MLS listings, and evidence of pending sales in the immediate neighbourhood.

Q: If the appraisal is low, should I relist at the appraisal value?

A: Only if market data supports that price. Sometimes relisting with better marketing and targeting cash/strong buyers nets more. Your agent should run net sheets both ways.

Contact for Georgetown sellers: tony@sousasells.ca | 416-477-2620 | https://www.sousasells.ca