What Happens When Your South Florida Home Does Not Appraise.
And What You Can Do About It.
The call nobody wants to get.
You are under contract. The inspection went well. The lender is moving forward. And then your agent calls: the appraisal came in below the purchase price.
I have been in this situation dozens of times — on both sides of the transaction. Here is what I want you to know: a low appraisal does not automatically kill a deal. It changes the negotiation. And how you handle it determines whether you close or whether you start over.
First — What Does a Low Appraisal Actually Mean?
When a buyer is financing their purchase, their lender requires an independent appraisal to confirm the property is worth at least the purchase price. The appraiser is hired by the lender — not the buyer, not the seller, not the agents.
If the appraisal comes in BELOW the purchase price — the lender will only loan against the appraised value.
Example: Under contract at $650,000. Appraisal comes in at $620,000. The $30,000 gap between the contract price and the appraised value is called the appraisal gap — and someone has to address it for the deal to close.
The Four Options When an Appraisal Comes in Low
Option 1 — The Seller Reduces the Price
The most common resolution. The seller agrees to reduce the purchase price to the appraised value — eliminating the gap entirely. Whether the seller will agree depends on how motivated they are and whether they have other offers.
💙 Sandra's Take: When I represent a seller and an appraisal comes in low — my first question is always: did the appraiser use the right comparables? Appraisers sometimes miss recent sales or use comps that are not truly comparable. Before agreeing to a price reduction I always review the appraisal report carefully and consider whether a rebuttal is warranted.
Option 2 — The Buyer Pays the Difference
The buyer agrees to cover the appraisal gap out of pocket — bringing additional cash to closing to make up the difference. Example: Contract at $650,000. Appraisal at $620,000. Buyer brings an additional $30,000 cash to closing on top of their down payment.
Option 3 — Split the Difference
Seller and buyer meet in the middle. The seller reduces the price partially and the buyer covers the remaining gap. This is often the most practical resolution in South Florida — particularly when both parties genuinely want the deal to close.
Option 4 — The Deal Dies
If the seller will not reduce the price and the buyer will not cover the gap — and the contract includes an appraisal contingency — the buyer can cancel and receive their deposit back.
⚠️ Warning: Not all contracts include an appraisal contingency. In competitive markets buyers sometimes waive it to make their offer more attractive. If you waived the appraisal contingency and the home does not appraise — you may be obligated to close at the contract price or lose your deposit. Always understand what contingencies your contract includes before signing.
Can You Challenge a Low Appraisal?
Yes — and in South Florida this is sometimes worth doing. The formal process is called a Reconsideration of Value (ROV). Your agent submits a request to the lender — along with comparable sales that the appraiser may have missed — asking the appraiser to reconsider their value conclusion.
🔑 Insider Tip: The most common reason appraisals come in low in South Florida is that the appraiser used comps from a wider geographic area rather than the specific micro-market. A home in Cutler Cay should be compared to Cutler Cay sales — not generic Cutler Bay sales. Your agent should review every comp the appraiser used and challenge any that are not genuinely comparable.
A Real South Florida Story
I recently had a transaction where the appraisal came in $30,000 below the contract price on a Coral Gables home. The appraiser had used comps from a slightly different part of Coral Gables with lower sales prices.
I reviewed the appraisal report carefully and identified two recent sales within two blocks of the subject property that the appraiser had not included — both of which supported the contract price. I submitted a formal Reconsideration of Value.
The appraiser revised the value upward by $22,000. The remaining $8,000 gap was split between the buyer and seller. The deal closed.
✅ Bottom Line: A low appraisal is not a death sentence. It is a negotiation. And the outcome depends entirely on how prepared and how persistent your agent is.
305-613-3376. 💙
About the Author
Sandra K. Alonso, PA | REALTOR® · Brown Harris Stevens
Sandra Alonso is a South Florida native and ten-year real estate veteran specializing in Coral Gables, Palmetto Bay, Cutler Bay, Pinecrest, and South Miami. As a 21-year original owner at Cutler Cay and a bilingual English/Spanish agent with Brown Harris Stevens, Sandra brings authentic hyperlocal knowledge to every buyer and seller she represents.
📞 305-613-3376 ✉️ salonso@bhsusa.com 🌐 www.homesbysandraalonso.com
