Last updated: November 2025
Quick Answer
If your home appraisal came in low, you still have options. Tactics such as negotiating seller concessions, requesting a value reconsideration, or exploring a second appraisal can help save your purchase, especially in competitive VA loan markets.
1. Why low appraisals threaten home deals
When you’re under contract to buy a home, a low appraisal can stall the process. Lenders won’t approve a mortgage that exceeds the home’s appraised value, which can lead to an appraisal gap. The appraisal gap is the difference between the appraised value and the agreed purchase price.
For buyers using VA loans, this issue can be especially complex. While VA loans protect buyers from overpaying, they also enforce strict limits on what buyers can cover out of pocket.
Understanding how to respond when the home appraisal comes in low can make the difference between closing the deal and watching it fall apart.
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Request a reconsideration of value (ROV) for VA loans
If you’re using a VA loan and believe the appraisal missed key comparable sales, you can file a Reconsideration of Value (ROV) request. This is a formal process through the VA that allows your lender or agent to submit:
- Additional or more relevant comparable properties
- Evidence of upgrades or renovations not accounted for
- Market data that supports the contract price
VA appraisers are required to consider the ROV request and may revise the appraisal if the new data is compelling. This is often the first and most effective tactic for VA buyers facing a low appraisal.
2. Negotiate seller concessions
In many cases, sellers are motivated to keep the deal alive and may agree to reduce the purchase price to match the appraised value. Even if they won’t lower the price fully, they might offer seller concessions such as:
- Covering part of your closing costs
- Offering a repair credit
- Providing a partial price reduction
Seller concessions are especially helpful when the deal fell through after appraisal due to an appraisal gap that neither party initially expected.
3. Bring cash to cover the appraisal gap
If you’re financially able, you can cover the appraisal gap by paying the difference out of pocket. For example:
- Purchase price: $350,000
- Appraised value: $335,000
- Appraisal gap: $15,000
By contributing $15,000 in cash at closing, you satisfy your lender’s loan-to-value (LTV) ratio and move forward with the purchase.
This option is often used in competitive markets where buyers want to strengthen their offer. But it may not be viable for VA buyers, who are limited in what they can pay out of pocket.
4. Explore a second appraisal (if allowed)
Second appraisals are rare but possible in certain cases. If your first appraisal had errors, such as using poor comparable sales or failing to inspect key areas, your lender may allow a new appraisal under one of these conditions:
- The appraiser failed to access the property
- The report contained factual mistakes
- The appraiser used outdated or irrelevant comps
For VA loans, second appraisals are only allowed under special circumstances. Your loan officer must request one through the VA’s regional office, and it typically requires documented issues with the original report.
5. Add an appraisal gap clause next time
This won’t save your current deal, but it’s a smart move for buyers in hot markets. An appraisal gap clause in your purchase offer commits you to cover a specific gap amount if the appraisal falls short.
For example: “Buyer agrees to cover up to $10,000 of any appraisal shortfall.”
While this increases the buyer’s risk, it can make your offer more competitive and reassure sellers in tight inventory markets.
6. Terminate the contract using your appraisal contingency
If none of the above options work, and you included an appraisal contingency in your purchase agreement, you can walk away without penalty.
Appraisal contingencies are standard in most contracts and allow you to back out if the appraised value doesn’t meet or exceed the purchase price.
This option may be your best route if:
- The seller won’t negotiate
- You can’t bring cash to cover the difference
- Your loan type doesn’t allow for flexibility
While walking away is never ideal, it can save you from overpaying for a property that doesn’t align with its market value.
7. Switch loan types (if appropriate)
If you’re using a loan with strict appraisal standards, like VA or FHA, and the seller refuses to make changes, switching to a conventional loan may offer more flexibility.
Conventional loans:
- Allow more discretion in handling appraisal gaps
- May not require certain condition-based repairs
- Permit waivers or streamlined appraisal processes in some cases
Keep in mind that this option depends on your qualifications. You’ll need to meet credit score, debt-to-income ratio, and down payment thresholds.
Why low appraisals happen—especially in tight markets
Appraisers use recent comparable sales (comps) to determine your home’s market value. In fast-moving markets, prices often rise faster than comps reflect. This leads to appraisals that lag behind actual purchase prices.
Other common reasons for low appraisals include:
- Incomplete or incorrect property data
- Appraisers unfamiliar with the neighborhood
- Renovations not reflected in public records
- Overzealous buyer offers in bidding wars
Buyers should stay aware of current sales trends and ask their agent to support the appraisal with strong comps whenever possible.
How VA buyers can act fast after a low appraisal
Because VA loans require strict property conditions and do not allow buyers to pay over appraised value, speed and strategy are key.
VA buyers should:
- Work closely with a VA-savvy loan officer to request an ROV immediately
- Ask their agent to prepare updated comps and justification
- Stay within VA rules for fees and concessions
- Keep documentation of all correspondence for the VA lender
Fast action helps you meet contractual timelines and improves your chances of approval.
Talk to a VA-savvy loan officer today
A low appraisal doesn’t have to end your home purchase. Whether you’re disputing the value, negotiating concessions, or requesting a second look, the right approach can save your deal.
Talk to a VA-savvy loan officer to explore your options fast.
FAQ: Home appraisal came in low
A: Yes. You can file a Reconsideration of Value (ROV) by submitting updated comps and supporting evidence. Your VA loan officer handles the request.
A: In many cases, yes—especially if they want to keep the deal alive. Sellers may also offer to cover closing costs or provide a credit.
A: An appraisal gap is the difference between the home’s appraised value and the purchase price. Buyers may need to cover this difference to close.
A: Sometimes. For VA loans, a second appraisal is allowed under specific conditions like appraiser error or access issues. It must be approved by the VA.
A: If you have an appraisal contingency, you can walk away without penalty. Without it, you may lose your earnest money deposit.
