I speak at real estate offices on a regular basis, and one of the most common questions is: What can I do when the appraisal comes in below the contract price?

As an appraiser that often networks with Realtors®, I can understand your pain, while also recognizing the appraiser’s position.  So here are a three things that you can do.

  • Review the appraisal for any errors or inconsistencies.

Make sure that the floor plan and room count are correct.  Read the report carefully to check for any mistakes.  Keep in mind that an appraiser utilizes public record information combined with an observation of the property for most of the subject property characteristics.  If you find any discrepancies, point these out to the lender


  • Confirm that the best comparables were utilized in the report

It may be possible that you know the neighborhood as well or better than the appraiser.  If the appraiser missed a good comparable, you can submit a reconsideration of value to the lender, along with comparables for the appraiser to consider.  Your comps should be chosen from recent (within six months) sales within proximity (1 mile), similar in room count and gross living area, age, and amenities.  It is wise to provide the appraiser with this information during the appraisal appointment, which could eliminate any reconsideration requests.


  • Request a second appraisal

If you are confident that the value can be supported, you may be able to ask for a second appraisal,  If the reconsideration process fails, a second opinion may result in a different value conclusion.  Not all lenders will grant this request. Worst case scenario: offer to pay the fee for the second appraisal.


Realtors® need to understand that an appraiser’s duty is to report to the lender what they observe at the property and utilize the most similar, recent and proximate sales comparables to arrive at a value conclusion.  Also, please understand that appraisers need to submit a report that conforms to the lender’s requirements.  The appraiser is aware of the contract price, but if there is no support in the market for the contract price, the value may come in low.  Realtors® can help themselves and the appraiser by providing as much data as possible to the appraiser at the time of the property appraisal appointment.  Feel free to contact me if you need any help or suggestions on an appraisal that comes in below the contract price.


Mark Buhler has been providing Orange County real estate appraisals since 1987


Contact Mark at CMP Appraisals via email or phone

mark@cmpappraisal.irvineappraisals.com  (949) 388-4943  https://cmpappraisal.irvineappraisals.com