By John Rea, Broker Associate | Berkshire Hathaway HomeServices Gateway Real Estate | Sept 28, 2026

What Do You Do When Your Home Appraisal Comes In Low?

Your offer was accepted. You're three weeks from closing. Then the appraisal report lands in your lender's inbox — and it's $15,000 below what you agreed to pay. Welcome to an appraisal gap, one of the most stressful moments in a home purchase. Here's how to handle it.

An appraisal gap happens when the appraiser's valuation comes in lower than your purchase price. In 2026, this happens on roughly 8.6% of all appraisals nationwide — which means it's a real problem that affects hundreds of Jackson Metro buyers every year. The good news: you have four concrete options. Pick the right one, and you'll close. Pick wrong, and you could lose your earnest money or your home.

Why Appraisals Come In Low

Appraisers aren't guessing. They're comparing your home to recent sales of similar properties — the comps. If the market has shifted downward, or if the comparable sales nearby sold for less than you negotiated, the appraisal reflects that reality. It's not personal. It's data.

In Madison County right now, the median home is selling for around $352,500 after an average of 57.5 days on the market (September 2026 data). Over in Rankin County, the median sits at $273,000 with an average DOM of 60.8 days. Both markets are balanced — neither strongly favoring buyer nor seller — which means appraisals usually track close to list price. But if you negotiated aggressively, or if the property needed work, an appraisal gap is more likely.

Here's Why This Matters (And Why Lenders Won't Budge)

Your lender sizes your loan against the lower of the contract price or the appraised value. That's non-negotiable. From the bank's perspective, the appraised value is what secures their loan if you default. If they lend you more than the house is worth, they're taking the risk.

So if you agreed to pay $320,000 but it appraised at $305,000, the lender will only finance based on $305,000. You have to cover that $15,000 gap yourself — or renegotiate it away.

Your Four Options (In Order of Likelihood)

1. Renegotiate the Price With the Seller

This is the most common resolution. The appraisal gap is technically the seller's problem — they listed the home at a price that didn't appraise. Depending on your market position and your inspection results, you can ask for a price reduction to match the appraisal.

In a balanced market like Madison and Rankin counties right now, sellers are usually willing to negotiate. It beats having you walk away and waiting for another buyer. Present it simply: "The appraisal came in at $305,000. I can close at that number if you'll adjust the price. Otherwise, I'll have to walk away per my appraisal contingency."

Most transactions close this way.

2. Cover the Gap in Cash

If you have savings and the gap is small ($5,000–$10,000), you can pay the difference out of pocket. This is straightforward: you pay the full negotiated price, your lender finances the appraised value, and you make up the gap at closing.

This works if: (a) you have the cash, (b) the gap is manageable, and (c) you still want the home badly enough.

3. Dispute the Appraisal (Reconsideration of Value)

If you think the appraisal is wrong, you can file a Reconsideration of Value (ROV) with the appraiser's firm. This is formal but inexpensive — usually free or $150–$300.

The ROV works if:

• The appraiser made a factual error (wrong comparable sale, wrong square footage, ignored recent major upgrades)
• New comps have surfaced that support a higher value
• The appraiser didn't account for your home's unique features

What the ROV doesn't work for: you don't like the number. The appraiser isn't basing their value on your feelings; they're basing it on data. If the comps genuinely don't support a higher value, a reappraisal won't change the outcome.

Filing an ROV takes 2–5 business days. If it's approved, great — you move forward at the higher value. If it's denied, you're back to options 1, 2, or 4.

4. Walk Away (If Your Appraisal Contingency Protects You)

Here's the protection built into your contract: an appraisal contingency. This clause lets you cancel the purchase if the appraisal comes in below the purchase price — and you get your earnest money back.

This only works if your contract includes this contingency. Most do. A few don't. Check your purchase agreement before you panic.

If you have an appraisal contingency and you can't reach a deal on renegotiation or come up with the cash, you can walk away cleanly. It's painful, but you keep your earnest money and you're not obligated to buy a home at a price higher than its appraised value.

What NOT to Do

• Don't disappear. Some buyers go silent after a low appraisal hoping the seller will panic and come down. That rarely works. Communicate directly.
• Don't pay the gap if you can't afford it. If you're stretching to cover the gap, you're borrowing more than you should. Walk.
• Don't file an ROV unless you have evidence the appraisal is wrong. ROVs are for correcting errors, not for appealing low values.

The Timeline

An appraisal typically takes 7–14 days to complete in Mississippi. The cost runs $350–$600 depending on the property type and location. Once you have the report, most contracts give you 3–5 days to respond — either accept it, renegotiate, dispute it, or invoke your appraisal contingency.

Move fast. Delays can kill a closing.

Frequently Asked Questions

Does the seller have to accept a lower price?

No. But if they don't, you can invoke your appraisal contingency and walk away. Most sellers will negotiate when that's the alternative.

Can I get the appraisal redone?

Not directly. You can file a Reconsideration of Value, but that's a review, not a full reappraisal. If the ROV is denied, your lender won't order a new appraisal unless there's evidence of appraiser error.

What if I don't have the cash to cover the gap?

Renegotiate the price, or walk away. Don't stretch yourself to cover an appraisal gap. If you're already stretched, buying this home puts you in financial danger.

How long does an appraisal dispute take?

An ROV typically takes 2–5 business days. If it's approved, you move forward. If it's denied, you have to pick one of the other three options.

Is an appraisal gap more common in Madison County or Rankin County?

Appraisal gaps aren't tied to county — they're tied to how aggressively you negotiated versus the actual market value. A gap is more likely if you offered significantly above recent comp sales or if the home needs substantial work.

Your Next Step

An appraisal gap is stressful, but it's solvable. The key is moving fast and staying rational. Most gaps get resolved through renegotiation within 3–5 days.

If you're facing an appraisal gap — or you want to talk through your appraisal strategy before you make an offer — let's connect. I've walked dozens of Jackson Metro families through this exact moment. Schedule a consultation here and we'll go through your options.

About John Rea

John Rea is a REALTOR® and Broker Associate with Berkshire Hathaway HomeServices Gateway Real Estate, serving Madison and Rankin Counties in Central Mississippi. Since 2016, he has closed more than $15 million in residential, land, and new construction sales, working with first-time buyers, downsizers, luxury homeowners, and move-up sellers across the Jackson Metro area.

Berkshire Hathaway HomeServices Gateway Real Estate · (601) 565-4764

Equal Housing Opportunity. John Rea is licensed as a Broker in Mississippi, regulated by the Mississippi Real Estate Commission. This article is general information only — not legal, tax, or financial advice. Confirm your actual costs and obligations with your attorney, tax advisor, lender, or closing officer.