“What to Do When Your Dream Home Appraises for Less Than the Offer”

You’ve found the perfect home, made a strong offer, and gotten it accepted — only to receive an appraisal that’s lower than the agreed purchase price. It’s a stressful situation, but it’s not uncommon.

A low appraisal doesn’t necessarily mean the deal is dead. It just means you’ll need a strategy to bridge the gap between what the lender thinks the home is worth and what you’ve agreed to pay. Here’s how to handle it calmly and smartly.

1. Understand Why It Happened

Appraisals are based on recent comparable sales (comps), the property’s condition, and local market trends.A low appraisal can happen because:

• Recent comparable homes sold for less.

• The market is moving faster than recorded data.

• The appraiser missed certain upgrades or unique features.

Start by reviewing the appraisal report closely — sometimes, the issue is simply that the appraiser didn’t have the full picture.

2. Request a Reconsideration of Value

If you or your agent believe the appraisal is inaccurate, you can challenge it.Here’s how:

• Provide better comparable sales that support the higher price.

• Highlight recent improvements or upgrades that add value.

• Write a clear, factual explanation to submit through your lender.

While not guaranteed, some appraisers do revise values when presented with stronger evidence.

3. Negotiate With the Seller

A low appraisal can be an opportunity to renegotiate the price. Many sellers are willing to meet you halfway or lower the price to match the appraised value, especially if they want to keep the sale moving.

If you’re in a competitive market, they may hold firm — but it never hurts to open the conversation.

4. Increase Your Down Payment

If renegotiation doesn’t work, you can make up the difference between the appraised value and the sale price with extra cash.

For example:If the home appraises at ₱9,000,000 but your offer is ₱9,500,000, you can pay the ₱500,000 gap out of pocket.

This keeps the deal alive without changing the loan amount or terms — though it’s only wise if you’re financially comfortable doing so.

5. Split the Difference

Sometimes, the fairest solution is to meet in the middle. You add some cash to cover part of the gap, and the seller agrees to lower the price slightly. It’s a balanced approach that shows both sides are committed to closing.

6. Consider Walking Away

If the appraisal comes in far below the offer and the seller won’t budge, it may be smarter to walk away. Most purchase agreements have an appraisal contingency, which protects your deposit if you can’t reach a fair resolution.

Remember, paying significantly more than a home’s appraised value can leave you “upside down” — owing more than the home is worth.

🧠 Pro Tip:

Before making an offer, your realtor can help you analyze comparable sales and market trends to reduce the risk of overpaying. A strong agent will also guide you through appraisal negotiations if this issue arises.

✅ Final Thoughts

A low appraisal is disappointing, but it’s not the end of your homeownership journey. With expert guidance, clear communication, and a little flexibility, you can often find a solution that keeps your dream home within reach — or helps you move on to one that’s an even better fit.