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.

$829,000

5 Bedrooms
6 Bathrooms
5,748 Sq Ft
8.870 Acres

1700 N Newton Street Jasper, Indiana

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Listing courtesy of Kara Hinshaw from Key Associates Signature Realty.

$714,900

3 Bedrooms
2 Bathrooms
2,940 Sq Ft
14.820 Acres

1089 N 400W Jasper, Indiana

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Listing courtesy of Zach Holt from Whitetail Properties Real Estate.

$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.

$459,900

4 Bedrooms
3 Bathrooms
2,048 Sq Ft
0.503 Acres

1485 Endress Lane Jasper, Indiana

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Listing courtesy of Steve Lukemeyer from F.C. TUCKER EMGE.

$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.

$359,900

3 Bedrooms
4 Bathrooms
4,624 Sq Ft
1.265 Acres

401 E 400 N Jasper, Indiana

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Listing courtesy of Steve Lukemeyer from F.C. TUCKER EMGE.

$349,700

4 Bedrooms
3 Bathrooms
2,648 Sq Ft
0.330 Acres

1517 Gregory Lane Jasper, Indiana

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Listing courtesy of Joseph Wootan from List With Freedom.com LLC.

$345,000

3 Bedrooms
2 Bathrooms
2,150 Sq Ft
2.960 Acres

875 S Rustic Lane Jasper, Indiana

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Listing courtesy of Daniel Hoffman from HOFFMAN & MULLEN REALTY INC.

$299,900

4 Bedrooms
2 Bathrooms
3,243 Sq Ft
0.241 Acres

215 E 9th Street Jasper, Indiana

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Listing courtesy of Jackie Hasenour from RE/MAX Local.

$290,000

5 Bedrooms
3 Bathrooms
2,730 Sq Ft
0.680 Acres

580 Riverside Drive Jasper, Indiana

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Listing courtesy of Jud Collett from Key Associates Signature Realty.

$280,000

3 Bedrooms
4 Bathrooms
1,568 Sq Ft
0.533 Acres

4667 W Ireland Church Avenue Jasper, Indiana

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Listing courtesy of Marissa Goodness from Carpenter Realty LLC.

$279,900

4 Bedrooms
2 Bathrooms
3,071 Sq Ft
0.520 Acres

1696 E Gun Club Road Jasper, Indiana

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Listing courtesy of Linda Schroering from CENTURY 21 SCHROERING REALTY.

$279,000

4 Bedrooms
3 Bathrooms
3,108 Sq Ft

6 Circle Pine Drive 6 Jasper, Indiana

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Listing courtesy of Jesse Peters from eXp Realty, LLC.

$269,000

4 Bedrooms
3 Bathrooms
1,972 Sq Ft
0.590 Acres

1477 Worrell Drive Jasper, Indiana

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Listing courtesy of Constance Nord from RE/MAX REVOLUTION.

$260,000

3 Bedrooms
2 Bathrooms
1,894 Sq Ft
0.290 Acres

608 Genevieve Avenue Jasper, Indiana

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Listing courtesy of Joetta Jones from F.C. TUCKER EMGE.

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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