How to Counter a Low Appraisal

There’s a reason so many people experience sleepless nights over the appraisal process; whether you’re buying, selling, or refinancing, this specific decision can feel very much out of your control. Yet, so much depends on it. 

If the appraisal comes in lower than expected, it can impact everything from the price and financing involved to the success of the whole deal itself. Despite the fact that it can feel like the deck is stacked against you, there are plenty of steps you can take should this happen to you. Let’s look at them sequentially:

Stay Calm

We’re starting with what might be the most challenging, despite its simplicity. But remember, while a low appraisal can be disheartening, there are ways to address it. Engage your brain into solution-finding mode and the outcome is often going to be much better.

Obtain a Copy of the Appraisal

To fight this, you’ll need to understand it, so ask your broker or loan officer to access a copy for your review. You want to know the specifics before you commit to any of the other steps. 

Review the Comparables (Comps)

So much of real estate strategy is tied to comps. What are similar homes in your area valued at? These are key factors to consider:

  1. Square footage
  2. Lot size
  3. Location on the block
  4. Condition of the homes
  5. Age of the homes
  6. Amenities of the homes
  7. Custom vs. tract homes (less of a factor in NYC)

Do Some Local Research

In NYC, the difference of a few blocks can mean thousands of dollars difference in the bottom line, so think hyper-local and consider some of the factors that may not have been taken into account. For instance, a property near an upcoming development or a proposed transportation change could make the home’s location more attractive (and often, more valuable). 

Investigate the School District

Again, this might not be as significant a factor in a city where kids don’t always attend the closest school to their home but nevertheless, this can sometimes exert influence over the appraisal. 

Contest the Homes Used

Let’s look at what you can do with all that research you’re doing. If you find significant discrepancies among the homes used as comps, work with both the seller’s and buyer’s agents to compile a list of more accurate comps that justify your desired price.

Investigate Permit Issues

Check whether the appraiser has deducted value for room additions or upgrades that lack proper permits. If there are missing permits, consider researching and obtaining them to prove the added value.

Highlight Your Property’s Features

Compile a list of amenities and improvements that set your property apart from others. You know your home better than anyone. What are the tangible positives they missed in their assessment? Does your building feature unusual perks? Did you upgrade kitchen countertops? Did they not facto in central air?

Scrutinize the Appraiser

Question the qualifications and practices of the appraiser. Obviously, you’ll want to tread carefully here but not everyone gets as granular in their research as we might hope. Your appraiser may have even just driven by the property! Make sure this is someone who is experienced and familiar with the neighborhood — this is especially critical in NYC.

Ask the Appraiser to Reconsider

Present all your findings and supporting documentation to the appraiser and request a reconsideration of their determination. This can typically be done through the bank or mortgage company that ordered the appraisal.

Demand a Second Appraiser

If the appraiser refuses to reconsider and you believe there’s substantial evidence supporting a higher value, send a demand letter to the bank or mortgage company requesting a second appraisal.

Order a Brand-New Appraisal

As a last resort, you can order your own appraisal. While this comes at a cost, it might be worth it if you’re confident that the property’s value is higher than the initial appraisal. Consider sharing the expense with the seller or buyer if it benefits both parties.


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