If you’re selling a home in Jasper or one of the surrounding communities, your buyer’s lender will most likely send an appraiser to your home. But what happens when your appraisal comes back low?

What Happens When Your Home Appraisal Comes Back Low?

Lenders typically send home appraisers to determine the value of a home before agreeing to let a buyer borrow the money. They do this because they don’t want to give a buyer more money than a home is worth; statistically, homeowners are more likely to default on their payments when their home isn’t worth what they paid for it. Appraisals help save lenders money and hassle.

With that said, it’s not uncommon for an appraiser to say that a home is worth less than what a buyer is asking to borrow to purchase it. When that happens, the lender may still offer to allow the buyer to borrow an amount equal to the home’s appraised value.

In situations like these, the buyer has three options. First, they can negotiate with you to lower the sales price. Second, they can come up with the difference in money on their own. Third, they can walk away from the transaction (and if their real estate agent built a home appraisal contingency into their purchase contract, they get their earnest money deposit back).

What Options Do You Have if Your Appraisal Comes Back Low?

If the appraisal on your home comes back lower than you expect, you may have a couple of options yourself. First, you can talk to your real estate agent about asking the appraiser – through the lender, of course – to take a second look. You and your real estate agent may wish to provide additional data that the appraiser may have overlooked the first time, such as other comparable properties, proof of improvements or upgrades, or other information.

You also have the option of asking the lender for a second appraisal. However, if you want a second appraisal, you’ll most likely have to pay for it yourself. Appraisals generally cost between $300 and $500, depending on several factors. You must also work with an appraiser that the bank chooses; you don’t get to pick your own appraiser. That’s because lenders have lists of trusted appraisers they routinely work with.

$575,000

3 Bedrooms
3 Bathrooms
1,776 Sq Ft
6.260 Acres

1928 South A Street Jasper, Indiana

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Listing courtesy of Arlet Jackle from RE/MAX Local.

$399,000

3 Bedrooms
4 Bathrooms
4,326 Sq Ft
0.675 Acres

3237 Dogwood Dr. Jasper, Indiana

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Listing courtesy of Larry Carpenter III from Carpenter Realty LLC.

$399,000

3 Bedrooms
3 Bathrooms
2,940 Sq Ft
2.530 Acres

634 E Wright Road Jasper, Indiana

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Listing courtesy of Stacey Hurst from RE/MAX REVOLUTION.

$379,000

5 Bedrooms
3 Bathrooms
4,014 Sq Ft
1.300 Acres

1091 W 36th Street Jasper, Indiana

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Listing courtesy of Steve Wigand from ERA FIRST ADVANTAGE REALTY, INC.

$360,000

4 Bedrooms
2 Bathrooms
3,490 Sq Ft
0.371 Acres

307 Newton Street Jasper, Indiana

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Listing courtesy of Tama Stemle from RE/MAX Local.

$336,000

3 Bedrooms
2 Bathrooms
1,502 Sq Ft
0.344 Acres

900 Juniper Court Jasper, Indiana

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Listing courtesy of Dara O'Neil from F.C. TUCKER EMGE.

$334,900

3 Bedrooms
3 Bathrooms
2,734 Sq Ft
0.580 Acres

980 S Crestwood Dr. Jasper, Indiana

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Listing courtesy of Larry Carpenter III from Carpenter Realty LLC.

$334,900

3 Bedrooms
4 Bathrooms
1,568 Sq Ft
1.100 Acres

4667 W Ireland Church Avenue Jasper, Indiana

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Listing courtesy of Marissa Goodness from Carpenter Realty LLC.

$270,000

3 Bedrooms
3 Bathrooms
2,548 Sq Ft
0.259 Acres

920 Brandon Avenue Jasper, Indiana

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Listing courtesy of Sandra Cave from RE/MAX Local.

$229,900

4 Bedrooms
3 Bathrooms
2,549 Sq Ft
0.124 Acres

612 W 8th Street Jasper, Indiana

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Listing courtesy of Dara O'Neil from F.C. TUCKER EMGE.

$208,000

2 Bedrooms
2 Bathrooms
1,800 Sq Ft
0.208 Acres

891 Giesler Road Jasper, Indiana

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Listing courtesy of Kevin Bayer from RE/MAX Local.

$198,500

3 Bedrooms
1 Bathrooms
1,086 Sq Ft
0.360 Acres

4862 N US 231 Highway Jasper, Indiana

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Listing courtesy of Kevin Bayer from RE/MAX Local.

$175,000

3 Bedrooms
2 Bathrooms
1,560 Sq Ft
1 Acres

5362 W Division Rd. Jasper, Indiana

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Listing courtesy of Larry Carpenter III from Carpenter Realty LLC.

$599,700

5 Bedrooms
5 Bathrooms
4,353 Sq Ft
1.115 Acres

470 Charlene Drive Jasper, Indiana

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Listing courtesy of Brenda Welsh from SELL4FREE-WELSH REALTY CORPORATION.

$599,000

1 Bedrooms
2 Bathrooms
662 Sq Ft
27 Acres

6272 N Kellerville Road Jasper, Indiana

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Listing courtesy of Gary Schnell from SELL4FREE-WELSH REALTY CORPORATION.

Do You Have to Give Your Buyer Their Earnest Money Back if Your Appraisal Comes Back Low?

If your appraisal comes back low and your buyer decides to cancel the transaction, you may have to give their earnest money deposit back. Usually, real estate agents write appraisal contingencies into their clients’ contracts, and those contingencies help prospective buyers hang on to their earnest money deposits in situations like these.

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