The call usually comes from your loan officer. The appraisal came in low, and the number on the report is now less than the price you agreed to pay. It can feel like the deal just hit a wall. Usually it hasn’t. You still have real options, and the first one costs nothing. Read the report closely before you decide anything.
- How a low appraisal changes your loan and what the gap really costs you
- How to tell a mistake in the report from a number that is simply right
- When a reconsideration of value is worth filing, and what to put in it
The Appraisal Came In Low. Now What?
Start with why the number matters so much. On a purchase, your lender sizes the loan from the lower of two figures, the contract price or the appraised value. Fannie Mae spells this out in its rules for calculating loan-to-value ratios. So a low appraisal shrinks the loan. It doesn’t shrink the price.
Consider a hypothetical. You agree to pay $400,000, and the home appraises at $380,000. Your lender now works from $380,000. Unless the price changes, you would bring the $20,000 difference to closing in cash, on top of your down payment.
That difference is often called the appraisal gap, and it is the whole problem. Every option below is a different way to close it, or a decision not to.
Read the Report Before You React
Ask your lender for a full copy if you don’t have one yet. Then check the basic facts about your home. Is the square footage right? What about the bedroom and bathroom count? Did the appraiser note the new roof or the finished basement? Simple factual errors do happen, and they are the easiest thing to get corrected.
Next, look hard at the comparable sales. Good comps are recent, close by, and similar in size, age, and condition. The NCUA’s consumer guide to home appraisals walks through the same checks. If the appraiser used a sale across a busy boundary while a closer, better match sold last month, that is worth raising.
Be honest with yourself, though. Sometimes the report is sound and the contract price simply ran ahead of the market, which can happen after a bidding war. In that case, pushing back won’t change much. If the layout of the report is new to you, our guide to the new appraisal report shows where each section sits on the page.
How a Reconsideration of Value Works
When you find a real problem, the formal fix is a reconsideration of value, or ROV. It is a written request asking the appraiser to look again at specific issues. You send it through your lender, not straight to the appraiser.
For conventional loans sold to Fannie Mae, lenders must have a borrower ROV process and explain it when they give you the report. Under Fannie Mae’s Selling Guide, you get one borrower-initiated ROV per appraisal, and you can’t file one after the loan closes. Your request has to describe what is unsupported or wrong. It can include up to five other comparable sales with their sources, such as MLS numbers. It also has to explain why that new information supports a different value.
FHA loans work differently. In March 2025, HUD rescinded the borrower-initiated ROV rules it had added the year before. Under the restored policy, the underwriter may request a reconsideration when the appraiser missed relevant information. So with an FHA loan, start with your loan officer.
One more rule shapes every request. Fannie Mae’s guide says a value change can’t be requested just because the appraisal doesn’t support the loan amount. Your ROV has to rest on evidence.
What Makes an ROV Worth Filing
Since you may get only one shot, make it count. The strongest requests are short and specific. They name the error, show the better comparable sales, and explain in a few sentences why those sales fit your home.
Weak requests lean on the wrong things. Active listings aren’t sales. Online value estimates aren’t appraisals. Neither is the price you hoped to get. And a heartfelt letter about how much you love the house won’t change the math, even though we understand the urge to write one.
Your agent can usually pull recent closed sales from the MLS. If you’d rather have an appraiser’s read before you file, an independent appraisal review can tell you whether the weak spots in the report are real.
Your Options When the Number Holds
Sometimes the ROV comes back with no change, or there is simply nothing to file. Then it becomes a negotiation, and most deals land on one of these paths.
- Renegotiate the price down to the appraised value, or partway there.
- Cover the gap in cash, if you have it and still want the home.
- Split the difference with the seller.
- Switch lenders, knowing a new lender may order its own appraisal, which costs money and could come in the same or lower.
- Walk away, if your contract has an appraisal contingency and you are still inside its deadline.
That last path depends entirely on your contract language. Whether you can cancel, and how quickly you must act, is a question for your real estate attorney. Ask early, because contract deadlines don’t pause while an ROV is under review.
If You’re the Seller
A low appraisal lands on sellers too, yet you usually never see the report. As the NCUA notes, sellers typically don’t receive a copy, although the buyer can choose to share it. So ask, through your agent.
Then get to work on three things. First, have your agent pull the closed sales you think the appraiser missed and send them to the buyer’s side, so they can go into the buyer’s ROV. Second, put together a dated list of the work you’ve done, since a new furnace or roof the appraiser didn’t know about is fair to raise. Third, decide the lowest price you will accept before the renegotiation call, not during it.
Next time, you can get ahead of it. A pre-listing appraisal gives you a documented value before you set the asking price, so the buyer’s appraisal is less likely to surprise anyone.
Treat the Low Number as Your Starting Point
A low appraisal is frustrating, but it also hands you facts to work with. Read the report, check the details and the comps, and file an ROV only when you have real evidence. If the number holds, negotiate with a clear head and an eye on your deadlines. And if you want a second set of eyes on the report before you decide, that is work our appraisers do all the time.
Not Sure the Low Number Is Right?
A PahRoo appraiser can review the report and tell you whether its comps and adjustments hold up, so you know if a reconsideration request is worth filing.
Frequently Asked Questions
What should I do first if my appraisal came in low?
Get a full copy of the report from your lender and read it. Check the facts about your home and the comparable sales before you decide whether to request a reconsideration of value, renegotiate the price, or cover the gap.
How many reconsideration of value requests can I make?
For conventional loans sold to Fannie Mae, you get one borrower-initiated ROV per appraisal, and it must be filed before the loan closes. FHA loans follow a different process in which the underwriter may request the reconsideration, so ask your loan officer how your lender handles it.
Can I call the appraiser and ask for a higher value?
No. A reconsideration request goes through your lender, which reviews it before anything reaches the appraiser. Lenders have to keep that process in line with appraiser independence requirements, so a direct call asking for a number won’t help your case.
Does the seller have to lower the price after a low appraisal?
No. A seller isn’t required to drop the price, but the buyer may not be able to close at the original number without more cash. What happens next depends on the contract, so both sides should talk with their real estate attorneys.
Can I order my own appraisal to replace the lender’s?
Lenders set their own rules about which appraisals they will accept, so ask yours before you order anything. An independent appraisal review can still help you judge whether the lender’s report holds up, and an independent appraisal is the right tool for pricing a sale, settling an estate, or dividing a home in a divorce.
About PahRoo
For more than two decades, PahRoo Appraisal & Consultancy has valued homes across Chicago and Cook County, with teams also serving Dallas, Philadelphia, Phoenix, and Naples. Homeowners come to us when they need a number they can stand behind, for a divorce, a date-of-death appraisal, a pre-listing value, or a second opinion. New to the process? Start with our guide to how a home appraisal works.