The appraisal came in low: your options, step by step

What a low value does

Lenders base the loan on the lower of the purchase price and the appraised value. If your loan program allows 95 percent loan-to-value and the home appraises $15,000 below the price, the maximum loan drops by about $14,250. Your down payment rises by the same amount if you still pay the full price.

The loan is not dead. You need one of four outcomes: a lower price, more cash from you, a revised value, or an exit.

Step 1: check the clock

If your contract has an appraisal contingency, find its deadline and notice rules now. Everything else has to happen before it expires. If you need more time, ask the seller for a written extension.

Step 2: read the report

The CFPB encourages buyers to review appraisals and make sure they understand them. Federal rules entitle you to a free copy for a first-lien mortgage. Look for:

• Factual errors. Wrong square footage, bedroom or bathroom count, lot size, or features such as a finished basement or garage.
• Weak comparables. Sales from a different neighborhood, very different homes, or old sales when recent ones exist.
• Adjustments that do not make sense. Large or unexplained adjustments for differences between your home and the comparables.

Make a list with specifics: the error, the correct fact and proof. For comparables, give the address, sale date, price and why it fits better.

Step 3: ask for a reconsideration of value

A reconsideration of value, or ROV, is a request from the lender to the appraiser to reassess the report based on deficiencies or information that may affect the value. In 2024, the CFPB, FDIC, Federal Reserve, NCUA and OCC issued guidance on how financial institutions may handle these requests. The guidance notes that a consumer may provide specific, verifiable information that was not available or not considered when the appraisal was done. It also describes ways lenders may resolve deficiencies: working with the original appraiser, ordering a review by another qualified appraiser, or getting a second appraisal or evaluation.

The guidance describes what lenders may do. It does not require every lender to follow one process. Ask your loan officer how its process works and how long it takes. For FHA loans, HUD rescinded its 2024 borrower-initiated ROV requirements in March 2025, so ask your lender how it handles FHA requests now.

Step 4: negotiate

Renegotiating is common, because the seller's next buyer may run into the same value. Typical outcomes are a lower price, splitting the difference, a seller credit toward closing costs, or a mix. Keep in mind that a seller credit does not raise the value, so it helps with cash to close but not with the loan-to-value limit.

Step 5: cover the gap or cancel

If you want the house and can afford it, you can pay the difference in cash. Do not use your entire reserve. You still need money after closing. If the numbers do not work and your contingency is still open, cancel in writing before the deadline to protect your earnest money.

The bottom line

Check the deadline, read the report and send specific evidence through your lender. Then negotiate, or walk away under your contingency. A low appraisal is a pricing problem with known solutions, as long as you act within the contract's timelines.