You have five options. Pay the gap in cash or split it with the seller. File a reconsideration of value with better comparable sales. Ask your lender whether a second appraisal is possible. Walk away under the contingency in your contract and recover the deposit. Reconsiderations succeed only 10% to 15% of the time, so keep expectations low.
Read the Appraisal Before You React
Every response starts with a careful read of what the appraiser actually did, and that review takes real work. On the Discover South Florida Podcast, Larry Mastropieri walked through a deal he was handling that week.
"I am dealing with this right now, and my seller will not lower the price after the appraisal came in low."
His first step is diagnostic instead of emotional.
"Did they make a mistake on this document? Did they record the square footage wrong? Did they choose poor comps? Did they not make good adjustments? Let's go through it and understand it."
Those four questions separate a defensible challenge from a complaint. A report containing a factual error gives you something to work with, while one you simply dislike gives you nothing. Buyers across Delray Beach and Boca Raton learn that distinction the hard way.
The Five Ways This Resolves
- The seller reduces the price to the appraised value.
- The buyer covers the difference in cash above the loan amount.
- Both sides split the gap and meet somewhere in the middle.
- Someone files a reconsideration of value asking the appraiser to revisit the number.
- The buyer cancels under the appraisal contingency and recovers the escrow deposit.
A sixth path exists when the loan program permits it, which involves ordering an entirely new appraisal. Every option carries a cost in money, time, or leverage.
Asking the Seller to Meet the Number
The conversation almost always opens here, and Larry described exactly how it arrived.
"The buyer's agent says, hey, we want to buy the property at 600. That's what it appraised for. We're under contract at 625."
His answer reflected a conversation he had already had with his client.
"I don't think he's going to go for it. I'd love him to just accept it and we could all move on, but that's not the case."
A seller who refuses is not necessarily being unreasonable, since their own numbers may make the reduction genuinely painful. Their reason for holding firm shapes what you should propose next.
Paying the Gap or Splitting the Difference
Cash solves the problem instantly, though few buyers have it sitting idle. The lender finances against the appraised value alone. A $25,000 shortfall therefore means that much more due at closing, on top of your down payment.
Larry raised the middle ground as the obvious compromise.
"Can you come up to 615? He'll come down to 615. We'll meet at 615."
The result in his deal is what makes this topic worth a page.
"No, no one wants to do it."
Split proposals fail when both parties believe they are already giving up too much. Buyers across Palm Beach County should still open with one, since it costs nothing and occasionally lands.
Did your appraisal come in under contract price? Talk to a real estate agent near Boca Raton who reads these reports line by line and knows which challenges are worth filing. Reach out to The Mastropieri Group or call (561) 544-7000.
How Does a Reconsideration of Value Work?
The formal challenge process carries a name and a procedure now, which surprises people expecting an informal phone call. Fannie Mae, Freddie Mac, HUD, and the VA adopted a uniform reconsideration of value framework in May 2024. Lenders must maintain a borrower-initiated process under it.
The request routes through your lender back to the original appraiser. You submit specific comparable sales the report overlooked, misapplied, or weighted incorrectly, typically three to five of them. Timelines vary by lender, running anywhere from a few business days to several weeks.
What Actually Wins a Challenge
- Verifiable factual errors such as wrong square footage or an incorrect bedroom count.
- Permitted additions or renovations the appraisal never accounted for.
- Closed sales genuinely comparable in size, condition, and location that went unused.
- Adjustments applied inconsistently across the selected comparables.
- Property features the report described inaccurately, including view or waterfront position.
Opinions accomplish nothing here. A successful challenge corrects facts and supplies better data, while a letter arguing the number feels too low goes straight into a file.
The Odds and What Trying Costs You
Larry is blunt about the success rate, and industry data lands close to his assessment.
"We all know that challenging appraisals 99.9% of the time is a waste of time. But we can do it if your buyer is willing, because the buyer has to be willing and the seller has to be willing."
Published success rates land near one in eight, so his exaggeration points in the right direction. The hidden cost is the calendar.
"We were supposed to close next week, and now we're not closing next week."
Delays cascade through the entire transaction.
"Now we're talking about extending the loan commitment period, extending the closing date. The buyer has a locked rate and has to pay additional fees if it extends beyond a certain date."
Everyone must agree before anything moves. A challenge needs cooperation from a buyer facing rate lock extension fees and a seller watching the closing date slip. Many parties simply decline for that reason.
Can You Order a Second Appraisal?
Certain transactions allow a fresh appraisal from a different appraiser, though loan program rules govern whether it is available. Lenders cannot simply shop for a better number, and the option typically requires genuine deficiencies in the first report.
Larry described how the cost question plays out in practice.
"We can order another appraisal. It's 800 bucks. Who wants to pay for that? Will the seller pay for that? Because I'm not paying for it."
The risk deserves equal attention, since the new number binds everyone.
"Maybe it comes back at 590, and then we've got to abide by that one. Or maybe it comes back at 625 and we do a deal."
He still favors the approach for a specific reason that has nothing to do with winning.
"That is what I am going to push my seller to do, because he needs to have conviction that the price is either 600 or not."
A second opinion either confirms the market or reveals that something got missed the first time. Either answer beats a seller holding out on a hunch. Sellers in Palm Beach Gardens often find the confirmation itself worth the fee.
Walking Away With Your Deposit
The appraisal contingency remains your strongest position, and buyers underuse it. A financed contract with that contingency intact lets you cancel and recover your escrow when the value falls short.
The protection disappears when you waive it, which a meaningful share of buyers did during recent competitive stretches. Roughly a quarter of buyers waived appraisal contingencies at the peak of the last seller's market, and many discovered afterward what that concession actually meant.
Check your contract language before you negotiate anything. Your leverage in every conversation above depends entirely on whether walking away remains available. Buyers in Broward County negotiating against a firm seller should confirm that deadline early.
Why Sellers Refuse to Come Down
Sellers rarely dig in out of stubbornness alone, and Larry's client had arithmetic behind the position.
"He paid 515 for this thing, and he invested like 150,000 bucks into it. So he's deep into this thing already."
The loss was already substantial before anyone mentioned a further reduction.
"He's going to lose like 75, 80 grand just at the price that we went under contract at. So for him to drop again is just unreasonable in his opinion."
Larry disagrees with his own client's conclusion, which is worth noting. Sunk costs do not change what a property is worth, though they powerfully shape how an owner feels about accepting less.
An Expensive Lesson in Waiting
The history behind this listing is the most instructive part of the story. The property had been through this before.
"We have another appraisal from like six months ago that appraised at 625. We were under contract at 647, and he refused to do 647."
That refusal set up everything that followed.
"Now we're under contract at 625, at the previous appraised number, and now it appraises 600."
The seller has watched roughly $47,000 evaporate across two rounds of holding out. Larry states the lesson without softening it.
"These are the consequences of screwing around with this. The next appraisal doesn't necessarily need to go your way. In this case, it didn't go our way whatsoever."
He also names the market reality underneath it.
"Values have kind of softened, and unfortunately not every property is appreciating."
The Case for Cutting Losses
Larry's investing philosophy shapes the advice he gives sellers in this position, and he applies it to his own deals first.
"We do a lot of foreclosure purchasing. Some work and you do well, others don't. And the ones that don't, we don't sit there and say hold it for a year, two, three, four, and then continue to screw around."
His alternative redirects the capital instead of defending the decision.
"We just cut our losses, take that money and reinvest it, and go try to make more money with it. How did we miss on that? Why did that happen? Never doing that again. Keep it moving."
The fallback of renting the property rarely rescues anyone either.
"The ROI on that is complete trash. He's barely breaking even."
His summary of the pattern should give every holdout seller pause. He told this client to sell a year ago at the last low appraisal. He expects the same conversation again next year at a lower number. Owners in West Palm Beach facing a softening segment should weigh that trajectory honestly.
An Appraisal Is One Opinion, Not a Verdict
A clear view of what these reports represent helps both sides negotiate rationally.
"An appraisal is an opinion of value at the end of the day, done in a structured format with rules. Everyone's opinion can be different, and as long as you abide by the rules within this structured format, that appraisal is valid."
Two qualified professionals can review identical properties and reach different conclusions, both defensibly. That reality explains why a second appraisal sometimes changes everything and why a challenge occasionally succeeds. It also explains why no single number deserves treatment as absolute truth.
Checklist When the Appraisal Comes In Low
- Request the full report and read the comparable sales section carefully.
- Verify square footage, bedroom count, and lot size against public records.
- Identify any recent closed sales the appraiser overlooked.
- Confirm your appraisal contingency deadline before opening negotiations.
- Ask your lender about their reconsideration of value procedure and timeline.
- Calculate what a rate lock extension would cost before agreeing to delays.
Loan programs and lender policies vary, and this page covers general practice. Your lender and agent should confirm what applies to your specific transaction.
Get a Straight Read on Whether the Number Is Wrong
A low appraisal splits into two very different situations, and telling them apart takes someone who reads these reports regularly. We pull the comps ourselves, identify genuine errors worth challenging, and tell you plainly when the appraiser simply got it right. A clear read on which one you face saves weeks of negotiation that was never going to work. Reach out to The Mastropieri Group, Realtors® at (561) 544-7000 and send us the report and your contract, and we will map your options.