What happens if my appraisal is lower than the sale price?
Short answer
If the appraisal is lower than the sale price, the appraiser's opinion of value is below what you agreed to pay. The CFPB says buying above that value is very risky. Source-identified options include reviewing the appraisal, asking the seller to reduce the price, or looking at what the purchase contract allows if the parties do not agree.
Full explanation
A lower appraisal means a professional opinion of the home's value came in below the sale price. The CFPB describes that as a sign the price may be above market value, and says it is very risky to buy for more than the .
The CFPB identifies several options. One is to review the appraisal so you understand the opinion of value. Appraisers follow rules when arriving at value, and lenders are not allowed to interfere with the appraiser's judgment. Another option is to ask the seller to reduce the price, using the appraisal as evidence.
If the seller will not reduce the price, the purchase contract determines whether you may cancel and what costs or consequences, if any, would apply. The CFPB notes that some buyers discuss those contract questions with an attorney. This explanation does not recommend a particular outcome. Review the appraisal, the purchase agreement, and the lender's next steps before deciding.
Sources reviewed
My appraisal is less than the sale price. What does that mean for me?
Open My appraisal is less than the sale price. What does that mean for me? ↗