The Mortgage Appraisal — What Happens, When, and Why It Comes In Low
A walkthrough of the appraisal process from order to delivery, plus the three reasons appraisals come in low and how to dispute one when it happens.
The appraisal is one of the most stressful 7-10 days of any home purchase. Here's exactly what happens, in order.
Step-by-step
1. Lender orders the appraisal — usually 5-7 days after acceptance. You pay ($650-$850 in CA), but the lender controls the order via an AMC (Appraisal Management Company). You don't pick the appraiser, by law. 2. Appraiser inspects the property — 30-60 minutes on site, takes photos, measures. Schedules through the listing agent or seller. 3. Appraiser pulls comps — 3-6 recent sales within a tight geographic area (preferably 0.5-mile radius, sold within 90 days, similar sq ft / beds / baths) 4. Appraisal delivered to lender — 3-7 days after inspection. Lender shares with borrower per ECOA.
Three reasons appraisals come in LOW
1. No good recent comps — Market moved fast, last 3 closed sales are 90+ days old at lower values. Common in declining markets. 2. Unique property — Custom build, unusual lot, ADU not in tax records, unpermitted additions. Appraiser has to discount what can't be verified. 3. Bad appraiser-comp matching — Appraiser used comps from across a major boundary (school district, freeway, neighborhood line) that buyers don't really compete with.
What to do if it comes in low
Option A — Renegotiate. Show seller the appraisal; ask for a price reduction to match.
Option B — Cover the gap. Bring more cash to close to make the lender whole. Common in competitive markets where you waived the appraisal contingency.
Option C — Dispute (ROV). Request for Value, formal process. Your LO submits 3-5 BETTER comps that the appraiser didn't use, with a written reason for each (closer, more recent, better matched). About 15-25% of disputes result in upward revisions.
Option D — Cancel. If you have an appraisal contingency, you can walk and recover earnest money.
Pro tips to prevent a low appraisal
- Get a list of recent comparable sales to your listing agent BEFORE you write the offer
- For unique properties, ask the LO if a second appraisal is worth ordering preemptively
- For refinances, prep the property (clean, tidy, paint touch-ups) — first impression matters
Worried about your appraisal? Our broker network can usually warm up an experienced appraiser for the area. Book a 15-min consult before you write your offer.