Seller Guide · Philadelphia Suburbs

    What Are My Options When the Appraisal Comes in Low?

    A low appraisal feels like a setback, but it is really a negotiation point. The buyer's lender will only lend against the appraised value, so the gap has to come from somewhere. This guide explains each option, when each makes sense, and how to protect yourself in the next contract if the first one falls apart.

    Talk through your optionsGet a Custom Plan
    Typical timeline: 14 days

    Step-by-Step

    1. 1

      Understand what the appraisal actually says

      Read the appraisal with your agent before reacting. Check which comparable sales were used and whether they truly match your home's size, condition, and location. Appraisers sometimes miss a recent strong sale or use a comp from a different neighborhood. If there are factual errors, like wrong square footage, your agent can submit a reconsideration request with better evidence through the buyer's lender.

    2. 2

      Weigh the four main paths

      Path one: reduce the price to the appraised value and keep the deal. Path two: the buyer brings extra cash to cover the gap. Path three: split the difference. Path four: if the contract has an appraisal contingency and no agreement is reached, the buyer may walk away with their deposit. Each path has a cost, so compare them against the realistic alternative of relisting.

    3. 3

      Consider your market position honestly

      If your home had multiple offers, a second buyer may pay the same price and hit the same appraisal wall. If showings were slow, the appraisal may be telling you something about the price. Ask your agent what the next thirty days look like if you relist at the same number. Sometimes taking a small reduction now beats months of carrying costs and a stale listing.

    4. 4

      Protect yourself in the next round

      If this deal ends, adjust before relisting. That may mean a price change, stronger buyer vetting on cash reserves, or preferring offers with appraisal gap coverage. If you keep this deal, get every change in a written addendum with clear numbers and dates. Verbal agreements about price changes create disputes at the closing table.

    A Worked Example

    Hypothetical example: A Paoli home is under contract at $550,000 but appraises at $535,000. The seller drops to $542,500, the buyer brings $7,500 extra cash, and both sign an addendum the same week. The deal closes on the original date.

    Your Checklist

    • Read the appraisal and check its comps
    • Ask about a reconsideration if facts are wrong
    • Price out all four paths
    • Compare against the cost of relisting
    • Put any agreement in a written addendum
    • Adjust strategy if you relist

    Common Pitfalls to Avoid

    • Refusing any change out of principle and losing a good buyer
    • Agreeing to terms without a written addendum
    • Relisting at the same price without a new plan

    Common Questions

    You can ask the buyer's lender for a reconsideration of value with better comparable sales or corrections of factual errors. It works sometimes, but the buyer's agent usually submits it, so cooperation matters.

    Not always. Appraisals look backward at closed sales, and one appraiser's opinion can differ from another's. But if showings were thin, treat it as useful information about where the market sees value.

    It depends on the contract contingencies. With an appraisal contingency, the buyer usually gets the deposit back. Your agent and, if needed, an attorney can explain what your signed contract says.

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