The lender lends against the lower of the two numbers. That is the entire mechanic, and everything else follows from it. If you agreed to pay $450,000 and the appraisal comes back at $435,000, your loan is calculated on $435,000, and the $15,000 gap becomes a cash question rather than a price question. It does not change what you owe the seller unless somebody renegotiates.
Do home appraisals usually come in low?
Most do not. The majority of appraisals support the contract price, and the rate at which they fall short moves with market conditions rather than staying fixed, so any national percentage you find is a snapshot of a moment that has already passed.
The fear is disproportionate for a specific reason. Appraisals that come in at value are invisible. Nobody tells that story at dinner. The one that came in $20,000 short gets retold for years, which is how a minority outcome acquires the emotional weight of a common one.
Where it does become more likely: rapidly rising markets, unusual properties with thin comparable sales, new construction in a subdivision with few closed resales, and any house where the winning offer sat well above the others.
What to do if the appraisal is lower than the offer
You have five moves, and they are not mutually exclusive. Most resolved appraisal gaps end up as some combination of the first three.
| Option | How it works | What it costs you |
|---|---|---|
| Renegotiate the price | Seller agrees to lower the contract price to the appraised value | Nothing, if the seller agrees. Leverage depends on their alternatives |
| Bring the difference in cash | You pay the gap on top of your down payment | Cash you were not planning to spend, and it is not financeable |
| Split the difference | Seller reduces partway, you cover the rest | A smaller version of both of the above |
| Request a reconsideration of value | Your lender submits additional comparable sales for review | Time, and it does not often move the number |
| Terminate under the contingency | Only available if your contract includes an appraisal contingency | Your time and inspection costs, but typically not your earnest money |
Note the word “if” in the last row. In Georgia, an appraisal contingency is an exhibit that has to be part of your contract. It is not automatic and it is not implied. Whether you have one was decided when you wrote the offer, possibly weeks before anyone thought about the appraisal.
Can the buyer back out if the appraisal is lower than the offer?
Only if the contract gives you that right. An appraisal contingency, a financing contingency, or a due diligence period still running are the three doors, and which ones are open depends entirely on what you signed and on the calendar.
This is the part where buyers who waived contingencies to win a competitive offer discover what they actually traded away. Waiving an appraisal contingency is a legitimate strategy. It is a bet that either the appraisal comes in or you can cover the gap, and it should be made with that framed clearly, not in the last twenty minutes before an offer deadline.
If financing falls apart entirely because of the gap, that is a separate question with its own rules.
Can the seller back out if the appraisal is low?
Generally no. A low appraisal is the buyer’s problem in contractual terms, not the seller’s, and it does not give a seller a right to terminate simply because they dislike the number.
What a seller can do is refuse to renegotiate. That is not backing out. That is declining to lower the price and waiting to see whether you will cover the gap or walk. In a market with other interested buyers, that refusal has teeth. In a house that has been sitting, it usually does not.
Can you appeal a low home appraisal?
Yes, through a reconsideration of value submitted by your lender. You cannot contact the appraiser directly, and neither can your agent, because appraiser independence rules exist specifically to prevent that conversation.
What actually works, when anything does, is new information rather than argument. A recent comparable sale the appraiser did not have. A factual error in square footage, bedroom count, or lot size. A permit for an addition that was not reflected. Disagreement about judgment rarely moves a value. Missing facts sometimes do.
One thing almost no buyer knows: you are entitled to a free copy of the appraisal report before closing, and federal rules require the lender to provide it. Read it. Errors are more common than people expect, and you cannot find one in a document you never asked for.
The appraisal is the only opinion in the transaction that nobody in it is allowed to influence. That is inconvenient exactly when you need it to be, which is more or less the point of having one.