In today’s market, it’s not uncommon for a home to sell above its appraised value. Competitive offers, limited inventory, unique property features, and rapidly changing market conditions can all contribute to a gap between the contract price and the appraised value.

The good news? A low appraisal doesn’t automatically mean the transaction is over. There are several paths forward that can help buyers and sellers reach the finish line.

One option that is often overlooked is a Reconsideration of Value (ROV). If there is factual information that may have been missed, such as recent comparable sales, property improvements, or inaccuracies in the appraisal report, the lender can request the appraiser review the additional information. While an ROV doesn’t guarantee the value will change, it provides an opportunity to ensure the appraisal reflects the most complete and accurate picture of the property.

Depending on the situation, buyers and sellers may also choose to:

• Renegotiate the purchase price.

• Split the difference between the appraised value and contract price.

• Have the buyer contribute additional funds to cover the gap.

• Explore financing solutions that may better fit the transaction.

The key is communication. Bringing your lender into the conversation early allows the entire team to evaluate the available options and determine the best path forward. Every transaction is unique, and with the right strategy, many appraisal gaps can be successfully resolved.

Do you have questions about an appraisal or want to discuss your options before an issue arises? A Key Mortgage loan officer is here to help navigate the process and keep your transaction moving forward.