When Your Appraisal Comes in Low….

Transaction One: VA Loan and a Successful Change of Value

In the first case, the buyer was using a VA loan, and the appraisal came in well below the agreed-upon sales price. This can be especially challenging, as VA appraisals tend to be more conservative and are governed by strict guidelines designed to protect veterans from overpaying.

After carefully reviewing the appraisal, all parties—the buyer, seller, and real estate professionals involved—agreed that:

• The contract price was within current market range

• The comparable sales used in the appraisal were not the most accurate or relevant

• Stronger, more appropriate comps better reflected true market value

We worked closely with the lender to request a Reconsideration of Value (ROV), submitting additional comparable sales and market data that more accurately supported the contract price.

The result was a successful outcome:

The appraiser reviewed the new information and revised the value to the full sales price. This allowed the buyer to proceed without bringing additional funds to closing and gave the seller confidence that the agreed-upon price was justified. Most importantly, it kept the transaction intact and on track to close successfully.

Transaction Two: Significant Appraisal Gap and a Collaborative Solution

In the second transaction, the appraisal presented an even greater challenge. The appraised value came in $105,000 below the contract price, creating a substantial gap between value and sale price.

Once again, we pursued a Reconsideration of Value, providing additional data and context to support the agreed-upon price. While the appraiser did adjust the value upward, the revision was limited to a $15,000 increase, leaving a significant remaining gap.

In this case, a different solution was required. Through open communication and collaboration:

• The seller agreed to come down on price

• The buyers contributed additional cash to closing

By working together and remaining flexible, all parties were able to bridge the gap and successfully close the transaction.

Why Low Appraisals Happen

Low appraisals can occur for a variety of reasons, including:

• Limited or outdated comparable sales

• Rapidly changing or appreciating markets

• Appraisers unfamiliar with neighborhood nuances

• Unique property features that are difficult to quantify

It’s important to remember that an appraisal is an opinion of value, not an absolute determination of what a home is worth.

Understanding the Reconsideration of Value (ROV)

A Reconsideration of Value is a formal process that allows a lender to request that an appraiser review additional information when a value appears unsupported or inaccurate. This may include:

• More recent or more appropriate comparable sales

• Corrections to factual errors

• Additional context regarding condition, upgrades, or market trends

Final Thoughts

Low appraisals don’t automatically mean a deal is dead. As these two transactions demonstrate, outcomes can vary—from a full value adjustment, to partial revisions, to creative negotiations between buyers and sellers.

The key is experience, preparation, and communication. Knowing how to respond, when to push for a reconsideration, and how to navigate solutions when gaps remain can be the difference between a deal falling apart and a successful closing.

If you’re buying or selling a home, having a knowledgeable professional on your side can help ensure that appraisal challenges are handled strategically and effectively—so you can move forward with confidence.