What Happens If My Home Doesn’t Appraise for the Sale Price?

When selling your home, one of the biggest curveballs can come during the appraisal. If your buyer is financing the purchase, their lender will order an appraisal to confirm the home’s value. But what happens if the appraised value comes in lower than the agreed-upon sale price? Let’s break it down.

Overview: Why Appraisals Matter in a Home Sale

Key Points:

What an Appraisal Is and Why It’s Required
What Happens When the Appraisal Comes In Low
Your Options as a Seller
How to Avoid Appraisal Issues
The Importance of Pricing Strategically

1. What an Appraisal Is and Why It’s Required

An appraisal is an independent assessment of your home’s value by a licensed professional. Most lenders won’t approve a mortgage without verifying that the home is worth at least what the buyer has agreed to pay.

2. What Happens When the Appraisal Comes In Low

If the appraisal is lower than the contract price, the lender will not finance the full amount. This creates an appraisal gap, and someone—either the buyer or the seller—will need to make up the difference for the deal to move forward.

3. Your Options as a Seller

When faced with a low appraisal, you generally have four options:

Renegotiate the price with the buyer
Ask the buyer to cover the gap out of pocket
Cancel the deal if neither party agrees
Challenge the appraisal (rare, but possible)

4. How to Avoid Appraisal Issues

Avoiding surprises means pricing your home correctly from the start and making sure your agent provides the appraiser with relevant comparable sales and a list of upgrades.

5. The Importance of Pricing Strategically

Overpricing leads to more than just longer days on market—it can also lead to failed appraisals and broken deals. A competitive price attracts serious buyers and ensures smoother financing.

Conclusion

If your home doesn’t appraise for the sale price, don’t panic. Understanding your options and working with an experienced agent can help you navigate the situation and keep the deal on track.

What Happens If My Home Doesn’t Appraise for the Sale Price?