Appraisal Gap: How Home Buyers Can Deal With a Low Appraisal
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Sometimes when you're trying to buy a home, your mortgage lender's appraiser says the house is worth less than you agreed to pay. This is known as an appraisal gap or a low appraisal. You may have to pay the difference in cash or renegotiate with the seller to keep the deal alive.
An appraisal gap resulting from a low appraisal can happen under any market conditions. It's more likely to occur while home prices are rising rapidly, but it can happen even when home values are falling.
» MORE: How a home appraisal works
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