A low number is a starting point for a conversation, not the end of the deal.
A low appraisal leaves a gap between the contract price and what the lender will finance. You can renegotiate, cover the gap, challenge the value or walk away if your contract allows. Here is how I think it through.
You have a signed contract, a home you love and a calendar that is finally starting to make sense. Then the lender calls with a number that is lower than the price you agreed on. It is a stomach-dropping moment, and it happens more often than people expect.
The good news is that a low appraisal is a problem with options, not a dead end. If you are relocating to Central Ohio, selling a longtime home or buying something smaller, here is how I would walk through it.
What Does a Low Appraisal Actually Mean?
It means the appraiser's opinion of value came in below the contract price. According to Rocket Mortgage, lenders base the loan on the appraised value, not the contract price, because "lenders won't loan you more than the home is worth." The article gives a simple example: a $400,000 offer with a $390,000 appraisal leaves a $10,000 gap. It also notes that roughly 10 percent of appraisals come back below the purchase price.
That gap does not mean the home is worth less to you. It means the lender will finance against the lower number, so the difference has to be solved somehow.
What Are Your Options When the Number Comes in Low?
You generally have a handful of paths, and which ones are open depends on your contract and your lender. Rocket Mortgage lists these:
Renegotiate the price. Ask the seller to come down to the appraised value or meet you partway. With an appraisal contingency, you may be able to walk away without penalty if the seller will not budge.
Pay the gap in cash. You cover the difference out of pocket, if you are determined to buy and your finances allow.
Challenge the appraisal. Provide evidence of errors, which I cover below.
Walk away. Without an appraisal contingency, you may forfeit your earnest money, so it is important to know what your contract says before you make an offer.
I am not an attorney or a lender, so please ask your agent, your lender and, if needed, a real estate attorney how these options apply to your contract.
How Do You Challenge an Appraisal the Right Way?
Start by reading the report. A Motley Fool article suggests checking for errors such as a miscalculated square footage or an omitted renovation. Then ask your agent to look at the comparable sales the appraiser used. If they are inadequate, you may have grounds to dispute the value.
The formal route is a reconsideration of value. You send your lender evidence of errors or missing information, and the lender reviews it and may pass it to the appraiser. Some lenders may order a second appraisal, which costs money. Rocket Mortgage notes that neither the lender, the buyer nor the seller can ask the appraiser to reach a specific value, so the request has to be about facts, not a target number.
If you believe bias played a role in a valuation, the Fool article notes that you can file a complaint with the CFPB or contact a fair housing specialist. Ask your lender about their reconsideration process before you decide.
How Does the Columbus Pace Affect Your Timeline?
The appraisal happens inside a short window. According to Resideline, Columbus's median was 23 days from contract to closing, and its Westerville page shows 23 as well. Resideline's Dublin and Hilliard pages show 25 and 32 days. That means you want to know early when the appraisal is ordered and how long your lender expects it to take.
Pricing context matters too. The Columbus Team's latest report showed homes selling at 96.9 percent of their original list price, with a median of 30 days on market. List price is a starting point, and closed sales are what an appraiser leans on, so the more your price reflects recent comparable sales, the less likely a surprise becomes.
How Can Sellers and Relocating Buyers Prepare?
If you are selling, price with recent closed sales in mind, and keep a list of improvements and dates, since an appraiser may not see everything on a walk-through. If you are buying, especially from out of town, talk with your lender about how a low appraisal would affect your financing and how much cushion you have. Ask your agent for comparable sales before you make an offer, not after.
Relocating buyers often cannot visit as often as they would like, which makes a trusted agent's comparison even more useful. I am glad to pull recent sales for any home you are considering.
Frequently Asked Questions
What happens if my appraisal comes in low?
The lender bases the loan on the appraised value, so a gap appears between the contract price and the financing. You can ask the seller to renegotiate, pay the gap in cash, challenge the appraisal with evidence or, if your contract has an appraisal contingency, walk away. Ask your agent and lender how your contract applies.
Can I ask for a reconsideration of value?
Yes. You send your lender evidence of errors or missing information, such as a wrong square footage or an omitted renovation, and the lender reviews it and may pass it to the appraiser. No one can ask the appraiser to reach a specific value, and the lender decides whether to move forward.
Do I have to pay the difference if the appraisal is low?
Not necessarily. Paying the gap in cash is one option, but you may also renegotiate the price, challenge the appraisal or, with an appraisal contingency, walk away. Without that contingency, you may forfeit your earnest money. Review your contract with your agent and, if needed, a real estate attorney before you decide.
How often do appraisals come in below the purchase price?
Rocket Mortgage's guide says roughly 10 percent of appraisals come back below the purchase price. That is a general figure, not a Columbus-specific one. Pricing close to recent comparable sales and asking your agent for comps early can reduce the odds of an unwelcome surprise.
If you are facing a low appraisal, or just want to avoid one, I would be glad to look at the comparable sales with you and talk through your options. Happy to talk it through, no pressure.
This content is provided for informational purposes only and does not constitute legal or financial advice. All real estate services are provided in compliance with Fair Housing laws, RESPA, TCPA, the REALTOR® Code of Ethics, and Ohio Real Estate Commission advertising regulations. Equal Housing Opportunity. Chrisi Hagan, Collins Lassiter Group, Red 1 Realty.
