If a home appraises below the purchase price, you can ask your lender to review the valuation through a reconsideration of value, or ROV.
A strong ROV request identifies specific problems in the appraisal, such as incorrect property details, omitted renovations or inappropriate comparable sales. You submit the request and supporting records to the lender, which manages the review process with the appraiser.
The 21st Century ROAD to Housing Act strengthens this process by requiring federal housing agencies to maintain requirements for reviewing and resolving consumer-initiated requests involving a reconsideration of value or a possible second appraisal.
A low appraisal can affect how much you can borrow, how much cash you need at closing and whether the purchase moves forward under the original contract terms. The law creates a clearer procedural expectation, but it does not require the appraiser to reach a particular value or guarantee that a disputed appraisal will change.
Low Appraisal Dispute Basics
| Topic |
What Buyers Should Know |
| Reconsideration of value |
A request for the appraiser to reassess the report based on possible deficiencies or relevant additional information. |
| Who starts the request |
The borrower raises the concern with the lender. The lender manages communication with the appraiser. |
| Useful evidence |
Correct property records, permits, photographs, renovation documentation and relevant comparable sales. |
| Possible result |
The appraised value may remain unchanged or be revised. A second appraisal may be considered where permitted. |
| What is not guaranteed |
A higher value, a second appraisal, acceptance of borrower-selected comparables or an extension of the closing deadline. |
What Is a Reconsideration of Value?
A reconsideration of value is a request for an appraiser to reassess an appraisal because the report may contain deficiencies, rely on inappropriate comparable properties or omit relevant information.
The FHFA defines an ROV as a request for the appraiser to reconsider the value because of potential reporting deficiencies, inappropriate comparable sales or additional information that should be considered.
The borrower does not normally contact the appraiser directly. Appraiser-independence rules limit communications that could pressure or influence the appraiser. The borrower provides the concern and supporting information to the lender, which determines whether the request meets applicable requirements and sends it through the proper process.
An ROV asks for a review. It is not an instruction to match the purchase price, accept a specific comparable property or increase the appraised value by a requested amount.
How Can a Low Appraisal Affect a Home Purchase?
An appraisal provides an independent opinion of the property’s market value for the mortgage transaction. The lender uses that value to assess whether the home provides sufficient collateral for the loan.
Mortgage lenders generally base the loan-to-value ratio on the lower of the purchase price or appraised value. If the appraised value is below the purchase price, the difference can affect several parts of the transaction.
The Loan Amount
A lender may reduce the maximum loan amount because the mortgage is being calculated using a lower property value.
The Down Payment
The borrower may need to contribute more cash to maintain the required loan-to-value ratio while still paying the original purchase price.
Mortgage Insurance and Pricing
A changed loan-to-value ratio can affect mortgage insurance, loan pricing or program eligibility. The exact effect depends on the loan type and transaction.
Contract Negotiations
The buyer may ask the seller to reduce the price, split the difference or make another concession. The seller is not necessarily required to agree.
A purchase price above the appraised value does not by itself prove that the appraisal is inaccurate. The contract reflects what the buyer and seller agreed to pay, while the appraisal is an independent valuation prepared for the lender.
How Does the ROAD Act Strengthen the Appraisal Dispute Process?
Section 704 of the ROAD to Housing Act requires the secretary of Agriculture, the secretary of Veterans Affairs, the FHA commissioner and the FHFA director to implement and maintain appraisal review requirements.
Those requirements must direct creditors of federally backed mortgages to have a review-and-resolution procedure for consumer-initiated requests involving a reconsideration of value or a second appraisal.
The provision applies to a consumer credit transaction secured by the borrower’s principal dwelling. Through the FHFA, the requirements can affect mortgages purchased or guaranteed by Fannie Mae and Freddie Mac, the two government-sponsored enterprises.
The law does not prescribe every procedural detail. The responsible agencies must determine how lenders receive, document, review and resolve requests within their programs.
The Law Builds on Existing Appraisal Review Policies
ROV procedures existed before passage of the ROAD Act. The FHA, the FHFA and other agencies had already issued or maintained policies addressing appraisal disputes and borrower requests.
The new law formalizes the requirement at the statutory level for covered federal mortgage channels. Agencies must implement and maintain requirements rather than treating consumer-initiated appraisal reviews solely as a temporary or discretionary policy initiative.
The Law Also Addresses Second Appraisals
The required framework covers both reconsideration-of-value requests and requests involving an additional appraisal. A second appraisal may be considered when permitted under the applicable agency and lender rules.
The law does not require a second appraisal whenever a borrower disputes a value. The lender must follow the standards established for the mortgage program and determine whether the circumstances support further appraisal work.
When Should You Consider Disputing an Appraisal?
A borrower may have grounds to request a review when the concern involves a specific factual error, omitted property feature or questionable valuation method.
Incorrect Bedroom or Bathroom Count
The report may list fewer bedrooms or bathrooms than the legally permitted property contains. The borrower should distinguish between a room’s current use and whether it legally qualifies as a bedroom or bathroom.
Incorrect Square Footage
The appraisal may rely on inaccurate gross living area or fail to account for a permitted addition. Different measurement standards or treatment of below-grade space can also explain discrepancies, so supporting documentation is useful.
Missing Renovations or Improvements
The report may omit a recent roof replacement, kitchen renovation, finished addition or other improvement that could affect condition or marketability.
The cost of an improvement does not necessarily increase the home’s value by the same amount. Documentation can still help the appraiser determine whether relevant work was overlooked.
Inappropriate Comparable Sales
The appraisal may rely on homes that differ materially in location, size, condition, design or property type when more relevant recent sales were available.
A comparable is not necessarily inappropriate because it sold for less than the subject property. The issue is whether the sale is a credible market comparison and whether the appraiser made supportable adjustments.
An Omitted ADU or Other Permitted Feature
The report may fail to recognize a legally permitted accessory dwelling unit, additional structure, garage, finished area or other feature that contributes to the property.
The effect on value depends on the feature’s legality, condition, market acceptance and treatment under the appraisal and mortgage program.
Statements That Conflict With Public Records
The appraisal may contain factual statements about the parcel, property type, zoning, sale history or physical features that conflict with reliable public records.
What Evidence Can Support an Appraisal Dispute?
A strong request is specific, organized and focused on information relevant to the appraisal. A general statement that the value feels too low is unlikely to provide enough information for a meaningful review.
Property Records and Permits
County property records, building permits, certificates of occupancy and approved plans may help document legal square footage, additions, bedrooms or other property characteristics.
Renovation Documentation
Contractor invoices, permits, receipts and dated photographs can show that renovations or repairs were completed before the appraisal.
Recent Comparable Sales
Comparable sales should generally be recent, geographically relevant and similar to the property in size, age, condition, design and use. The lender or appraiser will decide whether a proposed sale is appropriate.
Listing Information and Photographs
Current or prior listings may document improvements, condition and features that the report appears to omit or describe incorrectly.
A Concise Explanation of the Concern
The borrower should identify each alleged error separately and explain why the supporting information matters. A short factual submission is generally easier to evaluate than a broad argument about the overall result.
How to Dispute a Low Appraisal
1. Review the Appraisal
Read the report carefully and compare its factual statements with the property, contract, public records and available documentation.
2. Identify Specific Issues
List the errors, omissions or questionable comparable sales. Focus on facts and valuation evidence rather than the amount needed to make the transaction work.
3. Contact the Lender
Tell the loan officer or lender that you want to submit a reconsideration-of-value request. Ask what form, documentation and deadline apply.
4. Submit Supporting Information
Provide the records, permits, photographs or comparable sales that support the request. Follow the lender’s instructions and keep a copy of the submission.
5. Monitor Contract Deadlines
An ROV does not automatically extend an appraisal contingency, financing contingency or closing date. Buyers should review deadlines with their real estate agent or attorney.
What Happens After You Dispute the Appraisal?
The exact process depends on the mortgage program and lender, but the review will generally involve several steps.
| Step |
What May Happen |
| Borrower submission |
The borrower sends the concern and supporting evidence to the lender. |
| Lender review |
The lender determines whether the request meets program requirements and contains relevant information. |
| Appraiser response |
The appraiser may review the disputed information, explain the original analysis or revise the report. |
| Resolution |
The value may remain unchanged or be revised based on the review. |
| Second appraisal |
An additional appraisal may be considered when agency and lender rules allow it. |
The appraiser remains responsible for the appraisal opinion. A lender, borrower, seller or real estate agent cannot direct the appraiser to reach a predetermined result.
What If the Appraised Value Does Not Change?
If the appraisal remains below the purchase price, the buyer may still have several options. Availability depends on the mortgage program, the purchase contract and whether the seller agrees to change the transaction.
Renegotiate the Purchase Price
The buyer can ask the seller to reduce the price to the appraised value or another agreed amount.
Increase the Down Payment
The buyer may contribute additional cash to cover some or all of the difference between the price and the value used by the lender.
Split the Appraisal Gap
The buyer and seller may agree to divide the difference through a lower price and a larger buyer contribution.
Change the Loan Structure
Another mortgage product, down payment amount or loan structure may be available. A different loan program does not guarantee that a new appraisal will be ordered or produce a different value.
Use an Appraisal Contingency
An appraisal contingency may allow the buyer to renegotiate or cancel the purchase if the property does not appraise at the required amount.
Contract language and deadlines vary. Buyers should consult their real estate agent or attorney about their rights and obligations.
Walk Away if the Contract Permits
The buyer may be able to terminate the transaction and recover the earnest money when the contract includes an applicable appraisal or financing contingency and the buyer follows its requirements.
What Does the ROAD Act Not Guarantee?
- A higher appraised value
- A second appraisal in every case
- Acceptance of every comparable sale submitted by the borrower
- A value equal to the purchase price
- Approval of the mortgage after the appraisal review
- An automatic extension of the financing, appraisal or closing deadline
- Protection from contractual consequences when a deadline is missed
The law requires a process for reviewing and resolving covered requests. The outcome still depends on the evidence, appraisal standards, agency rules and lender procedures.
The Bottom Line
To dispute a low appraisal, review the report for specific errors or omissions, gather reliable supporting evidence and submit a reconsideration-of-value request through your lender.
The ROAD to Housing Act requires the USDA, the VA, the FHA and the FHFA to maintain review-and-resolution procedures covering consumer-initiated ROV requests and possible second appraisals on federally backed mortgages secured by a principal residence.
The law strengthens access to a formal review process, but it does not guarantee a higher value. Buyers should prepare for both the appraisal review and the contract decisions that may follow if the original value remains unchanged.
Frequently Asked Questions
Can a Buyer Dispute a Low Appraisal?
Yes. A buyer can ask the lender to initiate a reconsideration of value when the appraisal may contain factual errors, inappropriate comparable sales or omitted relevant information. The lender will determine how the request must be submitted.
Who Submits the Reconsideration Request?
The borrower raises the concern with the lender and provides supporting evidence. The lender manages the formal request and any communication with the appraiser.
Does an ROV Guarantee a New Appraisal?
No. An ROV generally asks the original appraiser to review the report and additional information. A second appraisal may be considered where agency and lender rules permit it, but the ROAD Act does not require one in every case.
Can I Choose the Comparable Sales?
You can submit sales you believe are relevant, but the appraiser determines whether they are appropriate comparables. The sales should be recent and similar to the property in location, size, design, condition and other market characteristics.
What Happens if the Home Appraises Below the Purchase Price?
You may be able to renegotiate the price, increase the down payment, change the loan structure or cancel under an appraisal or financing contingency. Your options depend on the purchase contract, mortgage program and seller’s willingness to negotiate.
Does a Low Appraisal Mean the Appraiser Made an Error?
No. The purchase price and appraised value can differ without an error. An ROV is most appropriate when the borrower can identify specific factual inaccuracies, omitted information or concerns about the comparable sales and analysis.
Will an ROV Delay Closing?
It can. The review takes time, and the request does not automatically extend contract or loan deadlines. Buyers should discuss timing with the lender, real estate agent and attorney as soon as a concern arises.
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