Price and appraised value are different questions
The contract price reflects what the buyer and seller agreed to. The appraisal is the lender's independent opinion of value for collateral purposes. In neighborhoods with varied architecture, condition and renovation quality, comparable selection and adjustments can be especially important.
Review the report before reacting
Check factual details first: living area, bedroom and bathroom count, property type, condition, renovations and the location of comparable sales. Then review whether more relevant closed sales were available as of the appraisal's effective date.
A reconsideration of value should be evidence-based. Disagreeing with the number alone is not enough.
Possible paths forward
The contract terms and loan program control the parties' rights. Common negotiated outcomes may include:
- Seller reduces the price
- Buyer contributes additional cash
- Buyer and seller meet somewhere between the values
- Other concessions are revised to improve the seller's net
- A supported reconsideration of value is submitted
- The transaction ends when the contract permits and no agreement is reached
Preparation begins before the appraiser arrives
Accurate MLS information, a list of documented improvements and relevant comparable context can help the appraiser understand the property. This is not about pressuring the appraiser; it is about making accurate information easy to verify.