The lender bases the loan on the lower appraised value, not the contract price. Your options are to renegotiate the price, pay the difference in cash, ask for a reconsideration of value with evidence, or cancel if your contract allows. The CFPB says it is very risky to pay more than the appraised value.
The appraisal is a professional opinion of value. The CFPB notes that lenders are not allowed to interfere with the appraiser's judgment, and that the lender must send you a copy of the appraisal. Get it and read it.
The CFPB suggests asking the seller to reduce the price, using the lower appraisal as evidence the price was above market. If the seller will not, you may want to cancel the sale, and it suggests talking to an attorney about the costs under your contract.
If you believe the appraisal has errors, ask your lender whether it has a process for a reconsideration of value. Federal agencies issued interagency guidance on these requests. A request needs facts: errors in the report or better comparable sales, not a hope for a higher number.
Example: $400,000 contract, $380,000 appraisal, 90% loan planned
| Item | Planned | After the low appraisal |
|---|---|---|
| Value used for the loan | $400,000 | $380,000 |
| Loan at 90% of value | $360,000 | $342,000 |
| Cash needed for the purchase price | $40,000 | $58,000 |
Made up figures. Closing costs not included.
What to do
- Get a copy of the appraisal and read it.
- Ask your lender whether it accepts a reconsideration of value and what evidence it needs.
- Ask the seller to lower the price or share the gap.
- Check your contract for an appraisal contingency before you decide.
- Decide whether the home is worth the price to you.
Sources
- CFPB, My appraisal is less than the sale price. What does that mean for me?. Get the appraisal; negotiate the price; risk of paying more than appraised value. Source type: Official. Checked October 17, 2026.
- FDIC, Understanding appraisals and why they matter. Reconsideration of value and how to request it. Source type: Official. Checked October 17, 2026.
- CFPB, Agencies finalize interagency guidance on reconsiderations of value. Interagency guidance on ROV policies. Source type: Official. Checked October 17, 2026.