What Sellers Need to Know About Home Appraisals (And What to Do if One Comes in Low)

When selling your home in the Hampton Roads real estate market, most sellers focus on showings, offers, and negotiations. But one of the most important steps happens after you accept an offer: the home appraisal.

A home appraisal can determine whether your buyer’s financing moves forward. If the appraisal comes in at or above the contract price, everything continues smoothly. But if the appraisal comes in below the agreed price, it can create challenges that sellers need to navigate quickly.

Understanding how appraisals work and how to respond if one falls short can help you keep your sale on track.

What Is a Home Appraisal?

A home appraisal is a professional opinion of a property’s value performed by a licensed appraiser on behalf of the buyer’s lender. Lenders require this step to make sure the home is worth the amount they are financing.

During the appraisal, the appraiser evaluates several factors including:

• Recent comparable home sales (comps) in the neighborhood

• The size, layout, and condition of the home

• Any upgrades or renovations

• Location and neighborhood demand

• Overall market trends

In areas like Virginia Beach, Norfolk, Portsmouth, Chesapeake, and Hampton, appraisers typically use recent sales from the last 3–6 months to determine a home’s fair market value.

Why Appraisals Sometimes Come in Low

Even in a strong real estate market, appraisals can come in below the contract price.

Some common reasons include:

Rapidly Rising Prices

In competitive markets, buyers may offer more than recent comparable sales support.

Limited Comparable Sales

If there are few similar homes recently sold in your area, it can be difficult for appraisers to justify higher values.

Unique Property Features

Homes with uncommon layouts, additions, or upgrades sometimes don’t align well with typical comparable properties.

Condition or Maintenance Issues

Items like older roofs, outdated systems, or visible maintenance concerns can affect the appraiser’s valuation.

What Happens if the Appraisal Comes in Below the Contract Price?

When an appraisal comes in low, lenders will only finance up to the appraised value, not the contract price.

For example:

• Accepted offer: $350,000

• Appraised value: $335,000

The lender will base the loan on $335,000, leaving a $15,000 gap between the loan amount and the purchase price.

At that point, buyers and sellers must work together to find a solution.

Options Sellers Have When an Appraisal Comes in Low

Renegotiate the Price

The most common solution is adjusting the purchase price to match the appraised value. While this may feel frustrating, it often keeps the transaction moving forward and prevents starting over with a new buyer.

Split the Difference

Sometimes buyers and sellers meet in the middle. The seller lowers the price slightly while the buyer brings some additional cash to closing.

Buyer Covers the Appraisal Gap

If the buyer strongly wants the home, they may choose to pay the difference between the appraised value and the purchase price out of pocket.

This is more common when inventory is low and buyers are competing for homes.

Challenge the Appraisal

If the valuation appears inaccurate, your real estate agent can request a Reconsideration of Value (ROV). This involves submitting:

• Additional comparable sales

• Evidence of upgrades or renovations

• Market data the appraiser may not have considered

While appraisers do not always change their valuation, this process can occasionally result in an adjustment.

Relist the Property

If no agreement can be reached, the contract may terminate depending on the buyer’s appraisal contingency. The home can then be returned to the market.

However, sellers should be aware that a future buyer’s appraisal could come in at the same value, so pricing strategy becomes especially important at that stage.

How Sellers Can Prepare for the Appraisal

The best way to avoid surprises is to prepare before the appraisal even happens.

Price Your Home Strategically

A competitive pricing strategy based on recent comparable sales reduces the risk of appraisal issues.

Provide a List of Improvements

Create a list of upgrades such as:

• Roof replacements

• HVAC upgrades

• Kitchen or bathroom renovations

• Flooring updates

• Energy-efficient improvements

This helps ensure the appraiser recognizes the full value of the home.

Make the Home Presentable

While appraisers are focused on value rather than staging, a clean and well-maintained home can still make a positive impression.

Why Pricing Strategy Matters More Than Ever

One of the biggest reasons homes experience appraisal challenges is pricing too aggressively at the start. While strong offers can be exciting, the final value must still be supported by comparable sales.

Working with an experienced real estate agent ensures your home is priced to attract buyers while still appraising properly, protecting your deal from falling apart late in the transaction.

Final Thoughts for Hampton Roads Sellers

A low appraisal can feel stressful, but it’s a common hurdle in many real estate transactions. With the right negotiation strategy and guidance, many deals can still successfully close.

The key is understanding your options and having a knowledgeable real estate professional who knows how to navigate appraisal challenges.

If you're thinking about selling your home in Hampton Roads, preparation and pricing strategy can make all the difference in ensuring your sale moves smoothly from listing to closing.