What happens if the appraisal comes in low?
Appraisal Came In Low? Here’s How to Fix It and Save Your Deal (Fast)
What happens if the appraisal comes in low?
A low appraisal can stop a mortgage, shrink your leverage, and wreck a deal—unless you act fast. This guide gives clear, practical moves you can use right away to protect your purchase or sale. Keywords: Home Inspections & Appraisals, low appraisal, appraisal comes in low, home appraisal, appraisal gap.
Why a low appraisal happens
- Bad comparables (wrong comps) used by the appraiser
- Market shifts since the last comparable sale
- Inaccurate property data or missed upgrades
- Appraiser unfamiliar with the neighborhood
- Condition issues found during a home inspection
Quick, step-by-step actions to take now
- Read the appraisal report carefully. Note comps, adjustments, and condition notes.
- Compare comps yourself. Pull recent sold data within 90 days, same neighborhood, similar size.
- Ask your lender for an appraisal review/reconsideration. Provide stronger comps and documentation (photos, upgrades, permits).
- Check for clerical errors. Square footage mistakes, wrong bedroom counts, or omitted upgrades are fixable and can raise value.
- Order a second appraisal only if lender allows and the cost makes sense.
- Reopen negotiation with the seller using the appraisal as leverage.
Negotiation options when the appraisal is low
- Renegotiate purchase price to match the appraised value.
- Seller provides a credit for the difference (appraisal gap coverage).
- Buyer covers the shortfall in cash (rare, but possible in hot markets).
- Split the gap: buyer and seller share the difference to close the deal.
- Cancel the deal if the contract has an appraisal contingency.
How home inspection findings affect appraisal
Inspections and appraisals are different but linked. An inspection documents condition; an appraiser values condition and market data. If inspections reveal major issues, they can push an appraisal lower. Use inspection reports to request repairs or credits before finalizing financing.
When to escalate or walk away
- Escalate: clear errors in the appraisal, strong comps ignored, or lender allows reconsideration.
- Walk away: no viable path to bridge the gap, or cost to buyer exceeds budget. A solid contract and contingency protect you.
Practical examples that work
- Found a wrong square footage: corrected report raised value by 5%.
- Submitted three stronger comps and new photos: lender accepted reconsideration.
- Negotiated a seller credit to cover the gap and closed on time.
Why this matters for buyers and sellers
A low appraisal doesn’t have to mean disaster. It’s a negotiation point. Move deliberately: document, communicate, and use market data.
Call to action — local market advantage
If your appraisal comes in low in the Greater Toronto area, get expert help fast. I specialize in appraisals, inspections, and negotiation strategies that save deals. Contact Tony Sousa, Local Realtor: tony@sousasells.ca | 416-477-2620 | https://www.sousasells.ca
Need a fast review of your appraisal or negotiation plan? Email me now. I’ll show what to contest, what to accept, and how to close the gap—no fluff, only moves that work.
