What If My Appraisal Comes in Low?

A low appraisal — when the appraised value comes in below the agreed-upon purchase price — is one of the most stressful situations in a real estate transaction. But it happens regularly in Orlando's competitive market, and it doesn't have to mean the end of your deal. Here's what you need to know.

Why Appraisals Come in Low

In fast-moving Orlando neighborhoods like Winter Park, Lake Nona, and Windermere, bidding wars can push contract prices above what recent comparable sales support. Appraisers are required to base their valuation on data — not emotion or market hype. If the last three comparable homes in your Oviedo neighborhood sold for $400,000 but you're under contract at $435,000, the appraisal may not support that higher number.

Other reasons include outdated comparable sales during rapidly shifting markets, unique property features that don't have good comps, or an appraiser unfamiliar with the specific micro-market. This is why choosing a local expert like Fred Collins — who has appraised properties in Central Florida for over 25 years — makes such a difference.

Your Options After a Low Appraisal

1. Renegotiate the Purchase Price

The most common solution is renegotiating with the seller. If the appraisal shows the home is worth $400,000 but you're under contract for $420,000, you can ask the seller to reduce the price to match the appraised value. Many sellers will negotiate rather than risk losing the deal and starting over.

2. Cover the Gap in Cash

If you believe the home is worth the contract price despite the appraisal, you can bring additional cash to closing to cover the difference between the appraised value and the purchase price. The lender will only lend based on the appraised value, so the gap becomes the buyer's responsibility.

3. Request a Reconsideration of Value

If you believe the appraiser missed relevant comparable sales or made errors, you can submit a reconsideration of value (ROV) request through your lender. This should include specific comparable sales data that supports a higher value. Fred Collins, as a State Certified appraiser, understands this process thoroughly and can advise you on whether an ROV is warranted.

4. Order a Second Appraisal

In some cases, lenders will allow a second appraisal. This is more common with portfolio lenders or when the first appraisal has clear deficiencies. A second opinion from an experienced local appraiser who deeply understands Orlando's neighborhoods can sometimes yield a different result.

5. Walk Away

If your contract includes an appraisal contingency — standard in most Orlando real estate contracts — you have the right to walk away from the deal if the appraisal comes in low and you can't reach an agreement with the seller. Your earnest money deposit is typically protected in this scenario.

How to Prevent Low Appraisals

While you can't control the appraisal outcome, sellers can prepare by documenting recent improvements, providing a list of upgrades with costs, and ensuring the property shows well. Buyers should work with agents who understand Orlando's appraisal landscape and price offers realistically based on comparable sales data.

Related Questions

• → What Factors Affect My Orlando Home's Appraised Value?
• → What If I Disagree With My Appraisal?
• → How Do Orlando's Market Trends Affect My Appraisal?