Purchase · 5 min read
What happens if the appraisal comes in lower than the purchase price?
August 16, 2026 · Written by Bill Egan, NMLS 7342
Short answer
The loan is based on the lower of the contract price or the appraised value. If the appraisal is short, you need a lower price, more cash from you, a different loan structure, or you use the appraisal contingency in the contract to walk away. Egan Financial Group LLC cannot lend on a number the appraiser did not support.
01
Why this comes up
You won the house in a tight offer. Then the appraisal — an independent opinion of value — landed below the price. You still like the house. You do not have an extra twenty thousand sitting around, and you do not know who is supposed to blink first.
02
Where this goes wrong
There is no appraisal contingency in the contract, or it already expired because you waived it to win. The seller will not drop the price. You cannot bring cash. The loan amount has to shrink. Either the deal dies, or you scramble for a gift or a different program while the rate hold runs out. A listing agent who has been through this will remember who could close and who could not.
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What we do about it
We order the appraisal early and walk you through the gap in dollars, not slogans. A reconsideration of value is possible when there are better comparable sales — similar homes that actually closed — not because someone is unhappy. Egan Financial Group LLC underwrites and funds here, so the next step is a conversation, not a ticket in a national appraisal queue.
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How to get ready
Know whether your contract has an appraisal contingency and the date it expires. Ask us, before you waive it, how much extra cash you could actually cover. Do not waive it to win if you cannot write a check for a gap. Save the similar sales your agent trusts in case we need to ask the appraiser to look again.