You're under contract on a home in Hampton Roads, the inspection went well, and then the appraisal report lands — and the number is lower than what you agreed to pay. It's one of the most stressful moments in a real estate transaction. Here's what a low appraisal actually means, and what your options are as a buyer.
What a Low Appraisal Means
When the appraised value comes in below the contract price, your lender has a problem: they agreed to lend based on the assumption that the home was worth the purchase price. A $400,000 purchase with 5% down means the lender is advancing $380,000. But if the appraisal says the home is worth $380,000, the lender will only advance 95% of $380,000 — which is $361,000. Now you have a $19,000 gap.
This gap doesn't automatically kill the deal. It creates a negotiation point. Here's how buyers typically respond:
Option 1: Request the Seller to Reduce the Price
The most common response: go back to the seller and ask them to accept the appraised value as the new purchase price. The seller may agree — especially if the market is cooling or their home has been on the market for a while. In a tight Hampton Roads market with multiple offers, sellers have more leverage and may decline.
Option 2: Pay the Gap Out of Pocket
You can choose to pay the difference between the appraised value and the purchase price in cash, on top of your down payment. If the appraisal gap is $10,000, you bring an extra $10,000 to closing. This requires having the funds — and the confidence that the home is actually worth what you're paying. In a rising market, paying slightly above appraised value isn't always irrational: if values are moving up 4%/year, today's 'overpay' may look prescient in 12 months.
Option 3: Split the Difference
Seller and buyer each give a little. You pay part of the gap; the seller reduces the price by the rest. This is often the path of least resistance when both parties genuinely want the deal to close and the gap is manageable (under $10,000).
Option 4: Challenge the Appraisal
If you or your agent believes the appraisal missed strong comps or made a factual error, you can request a reconsideration of value (ROV). Your agent submits alternative comparable sales, photographs, or data the appraiser may not have considered. The appraiser reviews and either revises the value or maintains it. ROVs are worth pursuing when you have genuinely compelling comps — not just wishful thinking.
Option 5: Walk Away
If your purchase contract included a financing contingency (which most do), a low appraisal that can't be resolved typically allows you to exit the contract and get your earnest money back. Virginia purchase contracts generally allow buyers to walk if the property doesn't appraise at the agreed purchase price and the parties can't resolve it.
How to Protect Yourself Before This Happens
A few things your agent should do before the appraisal is ordered:
Review the comps used to justify the offer price. If you paid above recent comps, understand why — and have documentation ready.
Include an appraisal gap clause in your offer if you're in a competitive bidding situation. This language commits you to paying a specified amount above the appraised value — it signals strength and helps sellers accept your offer with confidence.
Know the market trend. In Hampton Roads, values have risen 4.17% in 2025. Fast-rising markets mean comps can lag true value. An appraiser using 6-month-old comps might undervalue a home in a neighborhood that's moved significantly.
The Bottom Line
A low appraisal is an obstacle, not a dead end. In most cases, buyers and sellers find a way through. What matters is having an experienced agent who knows how to respond quickly, negotiate effectively, and protect your interests — whether that means fighting the appraisal or walking away with your deposit intact.
Ready to Make Your Move?
Whether you're buying, selling, or just getting your bearings in this market — I'd love to help. I'm Barry Jenkins, REALTOR® serving Virginia Beach and the greater Hampton Roads area. Let me show you what this market can do for you.
📞 Call or text: 757-919-8874 | 🌐 legacyhometeamlpt.com