- Before anything else, figure out where you stand contractually.
- Get the appraisal report itself, not just the headline number, from your lender or mortgage broker.
- If you have funds available beyond your planned down payment, increasing it to cover the shortfall is often the fastest fix, particularly under time pressure.
The call or email lands, and it's not the number you needed: your lender's appraisal has come back below your agreed purchase price. Whatever comes next depends heavily on one thing most buyers don't stop to check in the moment — exactly what stage your deal is at when the news arrives.
This article walks through what to actually do, in order, once you've learned your appraisal is low, rather than the general concept of why appraisals happen.
Start With What Stage Your Deal Is At
Before anything else, figure out where you stand contractually. This single fact shapes almost everything else you can do.
| Your deal is... | What that means for you |
|---|---|
| Still conditional, financing condition not yet satisfied or waived | You likely still have a structured, contractual way to renegotiate or walk away without breaching the agreement — this is your strongest position |
| Firm, all conditions satisfied or waived | You no longer have that built-in exit; a low appraisal on its own generally doesn't give you a right to walk away, and your deposit can be at risk if you can't close |
If you're not certain which situation applies to you, that's the first question for your lawyer — not a detail to guess at.
Immediate Steps in the First 24–48 Hours
- Get the appraisal report itself, not just the headline number, from your lender or mortgage broker.
- Call your lawyer the same day, especially if your financing condition is still open and has a deadline approaching.
- Ask your mortgage broker whether the shortfall affects your loan amount, your insurability, or both — a lower appraised value can mean the lender simply won't advance as much, regardless of your own qualifications.
- Calculate the real gap in dollars — the difference between your agreed price and the appraised value — so you know exactly what needs to be solved, whether through cash, renegotiation, or another route.
- Don't sign a waiver or make a firm commitment under pressure before you understand your options.
Ways to Close the Gap
- Bring additional cash to the deal. If you have funds available beyond your planned down payment, increasing it to cover the shortfall is often the fastest fix, particularly under time pressure.
- Ask the seller to reduce the price. Sellers have no obligation to agree, but some will, especially if they're motivated to avoid relisting or if the appraisal reveals a genuine issue with how the property was priced.
- Request a second opinion. Some lenders will consider a review of the original appraisal, or a second appraisal, if you have a specific, documented reason to believe the first one is flawed — this takes time you may not have, so weigh it against your closing timeline.
- Shop the file to another lender, through your mortgage broker, if your current lender's appraisal or lending terms are unusually conservative — results can genuinely vary between institutions.
If the Seller Won't Budge
A seller who won't renegotiate leaves you with a narrower set of choices, and which one makes sense depends on your deal's stage:
- If your financing condition is still open and hasn't expired, you may be able to rely on it to renegotiate more firmly or, if necessary, decline to proceed without breaching the agreement.
- If your deal is already firm, your realistic choices are generally to find the additional funds, or to accept the risk of not closing — which can put your deposit and more at stake. Speak with your lawyer before assuming either path is your only option; the specific wording of your agreement matters.
When It's Time to Get Your Lawyer Involved
Ideally, the moment you learn the appraisal is low — not after you've already tried to solve it informally with the seller's agent. A lawyer can tell you, based on your actual agreement, exactly what leverage you do or don't have, and whether any deadline is about to close a door you didn't realize was still open.
Frequently asked questions
How fast do I need to act once I learn the appraisal is low?
As fast as possible, especially if you still have an open financing condition with a deadline. Conditions typically have a defined window, and losing track of that window can turn a solvable problem into a firm-deal breach.
Can I ask for a copy of the appraisal report to check it myself?
You can request it through your lender or mortgage broker, and reviewing it can help you understand which comparable properties were used — useful information if you're going to ask for a renegotiation or a second opinion.
Is a low appraisal more likely on certain types of properties?
Unique properties, extensively renovated homes without permits on file, and properties in fast-moving markets can be harder to value precisely, which can widen the gap between an offer price and an appraised value. This isn't a guarantee either way for any specific property.
What if I've already waived my financing condition?
This significantly narrows your options, since the contractual protection that exists specifically for this situation is no longer available to you. Talk to your lawyer immediately about your realistic choices given your specific agreement.
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