Back To Blog

The Appraisal Came in Low - Is it the end of the deal?

We're ready to buy. What happens if the Appraisal Comes in Low?

Morale can really take a dive when the appraisal comes in low. Unfortunately, this happens more often that youd expect because buyers will bid higher than the property value to secure the house of their dreams. Saving while securing the deal can require some creative thinking, says Pete Green, Sr. Mortgage Banker at Atlantic Bay Mortgage in Rehoboth Beach.

Here are three options that can help.

Renegotiate the purchase price Depending on the details of the transaction, this can be tricky. Have the forethought to include an appraisal contingency in the purchase contract. The seller will usually work with the buyer. If not, your may have to put down extra money or take a higher interest rate on the loan.

Modify the financing terms While changing the terms is an option, you will benefit by keeping the loan to value rate at 80 percent. This will require you to come up with more money for the down payment. As an alternative, you could ask for an increase in the amount of the loan and retain a 20 percent down payment.

Get a second appraisal Asking the lender for a second opinion is always an option when a house is appraised lower than the purchase price. We use only local appraisers so low values are very rare in our case. Also note that not all lenders allow a 2nd appraisal... we do, says Green. The risk is that the second appraisal can come in even lower. Since each appraisal costs you money, its wise to limit the number of appraisals.

Bottom Line:

A low appraisal isn't the end of the deal. Got questions? Call 302-424-1890 or email us, were here to help. To contact Pete Green at Atlantic Bay Mortgage, call 302-227-4747, email or visit