Low appraisal
When the appraised value comes in below the contract price. The buyer may need to bring more cash, renegotiate, challenge the value, or use an appraisal contingency to exit.
Also called: appraisal came in low, under appraisal, appraisal shortfall
Related terms
A contract term that lets the buyer renegotiate or cancel if the home appraises below the purchase price. It matters most when a lender bases the loan amount on the appraised value.
A promise by the buyer to pay some or all of the difference in cash if the appraisal comes in below the price. It makes an offer stronger but means bringing more money to closing.
A formal request, made through the lender, asking the appraiser to review the value using better comps or corrected facts. It does not guarantee a change.
The loan amount divided by the property's value or price, whichever is lower, as a percentage. Lower LTV means less risk for the lender and often better pricing; above 80% usually triggers mortgage insurance on conventional loans.
The value the appraiser puts on the home in the report. Lenders base the loan on the lower of this number and the purchase price.