An appraisal is a valuation performed by a licensed appraiser assigned by the lender. You don't choose the appraiser and you can't influence the result.

Value is determined largely by comparing recent sales of similar nearby homes. Condition, size, layout, and renovations enter as adjustments. That's why properties in areas with few recent sales, or homes without close comparables, can come back differently than expected.

You generally pay for the appraisal, and it's billed early in the process. The lender is required to provide you a copy of the report, so you can see exactly what the valuation was based on.

If the appraised value comes in below the contract price, several options open up. Renegotiate with the seller. Increase your down payment to cover the gap. Submit supporting data and request a reconsideration of value. Or exit under the terms of your contract. Which is realistic depends on your contract language, market conditions, and your available cash.

Timing is what matters most here. Starting to respond only after the report arrives is often too late — contract deadlines apply, and your rate lock expiration is approaching at the same time. We help you decide your scenarios before the number comes back.