What happens if the appraisal comes in below my Bay Area purchase price?

by Alessandra Imanabadi

Whether your offer is on an East Bay home, a Peninsula property or a home in San Jose or San Francisco, discuss a possible appraisal shortage before committing to the price.

Our first move is to ask the seller to reduce the price by the appraisal shortage. A seasoned agent may also negotiate other terms that help the purchase make sense. You should not assume the first answer is to bring more cash.

But the best time to discuss this is before writing the offer

There are properties where we tell our clients: “Keep the appraisal contingency. We are not comfortable enough with the value to recommend removing it.” There are others where the comparable sales give us stronger confidence, and we discuss whether removing that contingency could make the offer more competitive—and whether the buyer can cover a shortfall. That decision should come from understanding the property and your financial position, not pressure to win. If you keep the contingency and the appraisal falls short, your contract may give you options to renegotiate or cancel. Without it, you may still ask for a reduction, but you have given up an important protection. A good agent should prepare you for this conversation before the offer—not leave you discovering the choices after the appraisal arrives.

Know what the lender will fund

Ask your lender to calculate how the lower appraisal affects the loan and cash needed to close. A credit toward allowable costs is not automatically the same as reducing the purchase price. Understand the actual shortfall before agreeing to a solution.

Speak with Alessandra about your situation. We will help you identify what matters, what deserves a closer look and the next step that fits your plans.

What happens if the appraisal comes in below my Bay Area purchase price?

by Alessandra Imanabadi

But the best time to discuss this is before writing the offer

Know what the lender will fund

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