June 3, 2026
Appraisals: What Happens If Yours Comes In Low
Your options when the lender values the home below your offer price.
An appraisal is the lender's independent valuation of the home you've agreed to buy. Lenders fund the lower of purchase price or appraised value. If the appraisal comes in below your offer, the lender lends less, and you have to cover the gap — or restructure the deal. Here's how to handle it.
Why low appraisals happen. The most common reason in Ottawa right now: rapid price changes between recent sales (comparable sales lag the live market by 60–90 days), unusual properties without strong comparables (a renovated heritage home on a street of unrenovated ones, a custom build), or genuine overpayment in a multiple-offer scenario where bidders pushed the price beyond defensible comparables.
Your options if it comes in low. First, request the appraisal report through your broker and review the comparables used. Appraisers sometimes use sales that aren't truly comparable; if you can supply better recent comps, the appraiser may revise. This works maybe 20% of the time.
Second, top up the difference yourself. If you offered $700,000 and the home appraises at $680,000 with 20% down planned, the lender funds 80% of $680,000 = $544,000, leaving you to cover the extra $20,000 from cash. This requires real liquidity beyond your planned down payment and closing costs.
Third, renegotiate with the seller. In a multiple-offer aftermath the seller often won't budge; in a single-offer or slow-market situation, sellers will frequently meet halfway because their next offer will also have to survive an appraisal.
Fourth, switch lenders. Different lenders use different appraisers, and a different appraiser may value the home differently. Your broker can submit to a second lender if there's time in your financing condition.
Fifth, walk away — if and only if your financing condition is still live. Once you've waived financing, a low appraisal is your problem alone. This is exactly why writing firm without a fully underwritten file is dangerous.
The simplest protection: include a 4–7 business day financing condition that explicitly references appraisal, and don't waive it until the lender confirms in writing that they'll fund the deal at your price.
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