A low appraisal can hinder a home sale, creating challenges for buyers, sellers, and lenders alike. The good news is that a low valuation doesn’t necessarily mean a deal won’t go through. If you know how to dispute a low appraisal, you may be able to present additional evidence, correct the mistake, and secure a revised appraisal.
This Redfin guide will walk you through the steps to challenge or dispute a low rating, from reviewing your rating report to requesting a review of value (ROV). Whether you’re selling a home in Hawthorne, California or buying a home in Wellington, Florida, understanding your options will help you move forward with confidence.
In this article:
What happens if my rating is low?
Pre-evaluation: How to strengthen your case from the beginning
Step 1: Check the assessment report for errors or missing information
Step 2: Gather stronger comparable sales and supporting documentation
Step 3: Request a review of value (ROV)
What happens if the valuation remains unchanged?
How to dispute a low rating: Key points
Frequently asked questions about challenging low ratings
What happens if my rating is low?
A negative appraisal occurs when the appraised value of the home is less than the agreed upon purchase price. Lenders typically base their loan amount on appraised value rather than contract price, so a low appraised value can create a gap that must be addressed before proceeding with the deal.
A low appraisal can delay a deal, but it doesn’t automatically mean the sale will fail. Understanding your options and acting quickly can help buyers and sellers find a path forward.
When appraisals are low, buyers and sellers usually have several options.
Request for Review of Value (ROV): Borrowers can work with their lender to dispute the appraisal if there are errors in the report or if stronger comparable sales are available. Renegotiate the purchase price: The seller may agree to lower the sales price to match or move closer to the appraised value. Closing the appraisal gap: Buyers can bring in additional cash before closing to cover the difference between the loan amount and the purchase price. Meet in the middle: Buyers and sellers may agree to split the difference through a negotiated price adjustment. Walk away from the deal: If the contract includes an appraisal or financing contingency, the buyer may be able to walk away from the deal without penalty.
>> Discover: Home Appraisal Tips for Sellers: What Can Harm (and Help) Home Appraisals?
Pre-evaluation: How to strengthen your case from the beginning
Although homeowners cannot control the outcome of the appraisal, they can take steps to ensure that the appraiser has accurate and complete information about the property. By being proactive, you can highlight upgrades, recent market activity, and comparable sales that support your home’s value.
“We always encourage franchisees who sell retail or remodeled properties to be proactive about the evaluation process,” encourages Kyle Amerson, franchise owner and development agent at WeBuyUglyHouses. “Leave a packet at the door for the appraiser. Include comparable sales (preferably 3-5) used to support the listing/contract price, a list of all features and updates/modifications completed by the seller, and a summary of showings, feedback, and offers (preferably multiple). Keep the packet simple. If it looks like you’re trying too hard to justify your value, that could be a red flag.”
>> Read more: How to prepare for a home appraisal (and what you need to know)
Step 1: Check the assessment report for errors or missing information
Before filing a dispute, carefully review the appraisal report for any errors or missing details that could have affected the home’s appraisal. This is an important first step in the process, as even small inaccuracies can affect the appraiser’s perception of value.
Please pay close attention to the following points:
Square footage measurement is incorrect. There are no bedrooms, bathrooms or other living spaces. Overlooking renovations, upgrades, or major repairs. There is an error in the condition or characteristics of the property. Similar sales that are outdated, too far away, or don’t look anything like your home. Inaccurate information about neighborhoods and local markets.
As you review your report, note any discrepancies and collect documentation to support your findings. This may include floor plans, permits, receipts for improvements, recent comparable sales, or photos of upgrades.
If you identify errors or believe the appraiser overlooked important information, those details can form the basis of a review of value (ROV) request. A fact-based approach supported by evidence is usually more effective than simply asserting that the home should be worth more.
Step 2: Gather stronger comparable sales and supporting documentation
If you believe the appraised value understates the value of your home, the next step is to build a strong case with related comparable sales and supporting evidence to increase the appraised value. The goal is to use objective market data rather than personal opinion to demonstrate why a property’s value is higher than the appraiser’s conclusion.
When collecting documents, keep the following in mind:
Recent comparative sales as close to the property as possible. Homes with similar square footage, lot size, age, and condition. Evidence of value-enhancing renovations, upgrades, or unique features. A document that highlights the differences between your home and comparable homes selected by the appraiser. Photos, permits, receipts, or contractor records to support your claim.
“To prevent low appraisals, listing agents should always meet with the appraiser with a carefully selected pack of local comparable sales to justify the purchase price,” says JD Songstad, real estate agent with Mr.Westside Real Estate. “If the appraisal is still low, the next action is to file a formal appraisal review through the management company. This appeal should include a clear itemized note detailing how the property’s size, condition, and features compare, ideally within a 1-mile radius, and provide relevant compensation. Low appraisals are difficult to fight, but accurate, data-driven arguments are your best chance of saving the deal.”
Step 3: Request a review of value (ROV)
Once you have reviewed the appraisal report and gathered supporting evidence, the next step is to formally challenge the appraisal through a Review of Value (ROV). The ROV requires the appraiser to review additional information that may have been overlooked or to review comparable sales that may support a different valuation.
“Don’t panic if your home appraisal is lower than expected. You have the right to request a review of value (ROV) through your mortgage broker or lender,” says Colin Wellman of Silicon Beach Homes. “Work with your real estate agent to identify the strongest comparables for sale that best support your home’s value, and provide evidence of any overlooked features or upgrades. If the appraiser’s selected comparables do not best represent your property, clearly explain why and submit better-supported alternatives as part of your value reconsideration request.”
This process typically involves working with your lender or mortgage broker to submit the following:
Recent comparable sales that better reflect the value of the property. Documentation of upgrades, renovations, or unique features. Evidence of factual errors in the evaluation report. An explanation of why certain comparable sales may be more appropriate than the sales selected by the evaluator.
What happens if the valuation remains unchanged?
Even after a review of value (ROV), there is no guarantee that the appraiser will adjust the appraised value of your home. Even if the appraisal remains the same, buyers and sellers have several options to proceed with the transaction.
“If the value doesn’t change, the seller still has options. The borrower can cover the difference in value with cash and move forward with the purchase at the originally agreed upon price,” says Kyle Amerson of WeBuyUglyHouses. “Sellers can agree to a price reduction, buyers can meet financing conditions and exit the contract, and sellers can return to the market or accept any of the other offers they receive.”
Depending on the circumstances, the parties may choose to:
Cover the appraisal gap: The buyer brings additional cash to closing to cover the difference between the appraised value and the purchase price. Renegotiate the sales price: The seller agrees to lower the price to more closely match the appraised value. Meet in the middle: Buyer and seller split the difference through a negotiated price adjustment. Avoid contingencies: If the contract allows it, the buyer may be able to walk away without penalty. Relist the property: Sellers can put their home back on the market and pursue other interested buyers.
>> Check it out: What’s wrong with home appraisals? 7 things you can do to fix them
How to dispute a low rating: Key points
A low appraisal can be a hindrance in selling your home, but it doesn’t necessarily mean it’s a deal-breaker. Start by reviewing the appraisal report for errors, overlooked upgrades, or comparable sales that may not accurately reflect the property’s value. Then, work with your real estate agent and lender to gather stronger evidence and submit a review of value (ROV).
There’s no guarantee that your appraisal will change, but a well-supported, data-driven appeal can improve your chances. Even if the appraisal remains the same, buyers and sellers may be able to move forward by renegotiating the price, closing the appraisal gap, or exploring other solutions.
Frequently asked questions about challenging low ratings
Why is the appraised value lower than the purchase price?
The appraised value may be lower than the purchase price if the appraiser determines that recent comparable sales do not support the agreed upon price. Other factors can also affect the final valuation, such as changes in market conditions, limited availability of comparable homes in the neighborhood, and differences in property condition and features.
Can a seller dispute a negative review?
Yes, sellers can dispute low appraisals by working with buyers, lenders, and real estate agents to provide additional information to support the home’s value. Formal value reconsideration requests are typically made through a lender, but sellers can provide comparable sales, upgrade details, and other documentation to strengthen their appeal.
>> Discover: How to dispute a real estate appraisal
Does home appraisal affect how much a buyer can borrow?
yes. Lenders typically use the appraised value rather than the purchase price to determine the maximum loan amount. If the appraisal is lower than expected, the buyer may need to come up with additional funds or renegotiate the terms of sale before closing.
If the first appraisal was low, can you do a second appraisal?
In some cases, a second review may be possible, but it depends on the lender, the type of loan, and the circumstances of the original review. Buyers should discuss their options with their lender before requesting another appraisal.
Do I have to waive the appraisal contingency in my home offer?
Waiving appraisal requirements can make offers more competitive, but it also means buyers may be responsible for making up a larger appraisal gap if the home’s value is lower than expected. Purchasers should consider their financial situation and risk tolerance before waiving this protection.
>> Have more questions? Should we abandon the evaluation contingency?
