What to Do If Your Home Appraisal Comes in Low

What to Do If Your Home Appraisal Comes in Low

In today’s shifting housing market, more buyers and sellers are facing an increasingly common challenge: low home appraisals. This happens when the appraiser values the home for less than the agreed-upon purchase price. It can throw a wrench into your financing plans and create a lot of uncertainty—but it doesn’t have to derail your home purchase.

Here are some smart ways to navigate a low appraisal and keep your homebuying plans on track.

1. Understand Why the Appraisal Came in Low
Appraisals are based on comparable sales, market trends, property condition, and upgrades. In markets where home prices are cooling or there are few recent sales to compare, appraisals may not keep pace with asking prices. Your lender relies on the appraisal to determine how much they’re willing to lend, so if it comes in low, they’ll base their loan amount on that lower number.

2. Review the Appraisal for Errors
Ask for a copy of the appraisal report and go over it with your realtor. Look for mistakes like incorrect square footage, missed upgrades, or inappropriate comparables. If you find factual errors, you may be able to challenge the appraisal or request a second opinion.

3. Renegotiate with the Seller
If the appraisal is lower than the agreed purchase price, consider renegotiating. The seller may agree to lower the price, especially if they want to keep the deal moving. It never hurts to ask—and it could save you thousands.

4. Increase Your Down Payment
If renegotiation isn’t an option, you might choose to cover the difference out of pocket. This means increasing your down payment to make up the shortfall between the appraised value and the purchase price. Make sure you talk to your mortgage agent first to understand how this affects your budget and loan structure.

5. Explore Alternative Financing Solutions
A knowledgeable mortgage broker can help you explore other financing strategies. Depending on your situation, options like a second mortgage, private lending, or alternative lenders may bridge the gap and allow the deal to proceed.

6. Walk Away If Needed
Sometimes, the best financial decision is to walk away. If the numbers no longer work or you can’t reach an agreement with the seller, your financing condition gives you the flexibility to exit the deal without penalty.

Bottom Line:
A low appraisal doesn’t have to mean the end of your homebuying journey. At Hoam Loans, we help clients navigate these challenges with creative financing solutions and expert advice. If you’re facing an appraisal issue or want help preparing for one, reach out today—we’ll make sure you have options.

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