All articles 6 min read

Home Appraisals: Low Values, Different Estimates, and Your Documents

A home's asking price, tax assessment, and mortgage appraisal answer different questions. A gap between them can change how much a lender is willing to finance. Ask for the valuation documents, understand why the lender requested them, and examine the assumptions before deciding whether to renegotiate, contribute more cash, or reconsider the purchase.

The questions below use selected Consumer Financial Protection Bureau guidance, adapted and organized by Fynoptic. Source links and the dates displayed by those sources are provided at the end.

What are appraisals and why do I need to look at them?

An appraisal is a written document that shows an opinion of how much a property is worth.

The appraisal gives you useful information about the property. It describes what makes it valuable and may show how it compares to other properties in the neighborhood. An appraisal is an independent assessment of the value of the property.

When you borrow money to buy or refinance a home, your lender may need to get a new appraisal and may require you to pay for it. Your lender may also use other ways to check the value of the home. For a typical home loan (that is, a loan secured by a first mortgage on your residential real estate), you are entitled to receive a copy of appraisals and opinions of value your lender gets. You should receive them soon after they are delivered to the lender in complete form—no later than three days before closing.

You can’t be charged a fee for copies of an appraisal or other valuation. But you can be charged a reasonable fee for the lender’s cost of preparing the appraisal or other valuation.

My appraisal is less than the sale price. What does that mean for me?

It is very risky to purchase a home for more than the appraised value.

First, get a copy of the appraisal

The appraisal is a professional opinion as to the value of the home you want to purchase. Appraisers have to follow rules in arriving at the value of a property, and lenders are not allowed to interfere with the appraiser's judgment. The lender is required to send you a copy of the appraisal. If you haven't received a copy, ask your lender for it.

A good next step is to ask the seller to reduce the price on the home

You can often use the lower appraised value to negotiate a reduction in the sales price of the home. The appraisal is strong evidence that the price was above the market value of the home.

If the seller won't reduce the price on the home, you may want to cancel the sale

Consider consulting an attorney about your options. Depending on the terms of your purchase contract, there may be costs associated with cancelling the sale. However, these costs are likely small compared to buying a home that isn't worth what you paid for it.

Why did I receive different valuations during the mortgage loan application process?

In general, any valuation compares the home you are trying to buy or refinance with sales information on similar homes from the same area.

A valuation is an estimate of the amount of money a home may be worth, based on tax assessments and sales information for the housing market in your area.

The valuation will also be based on information about the home including square footage, the number of bedrooms, and bathrooms, and the year it was built.

When you buy or refinance a home, your lender will get at least one valuation. No matter where the values came from, your lender is required to give you copies of each valuation that they have. Those valuations could include:

Tip

You may also get your own independent appraisal, but you might have to pay an additional fee. If the appraisal is well below the price you offered to pay, you may want to consider renegotiating the home purchase price or reviewing the appraiser’s work carefully to understand how the appraiser arrived at the estimated value.

  • An appraisal by a licensed real estate appraiser who does a full inspection of the property. This is the most common type of valuation. Appraisal values are generally determined by making adjustments between the features of your home and comparable local property sales (which are called “comps” for short).
  • A Broker Price Opinion (BPO), which is an estimate of value provided by a real estate sales professional. A BPO is most commonly used to justify a home’s listing price.
  • An Automated Valuation Model (AVM), which is a computer-generated value that uses mathematical models that compare information about the house you want to buy—number of bedrooms, bathrooms, square feet, etc. —with recent sales figures and other information about the housing market in your area.

Your lender may get an AVM when you first submit your loan application, just to make sure that the property value is reasonable. Later, the lender may require a full appraisal by a licensed real estate appraiser. Each of these valuations may be different because they are estimates and may be based on different comps or may have been completed at different times or for different purposes. If there is a big difference between the different valuations, your lender will have to decide which value is most reliable.

Do I have the right to receive a copy of my home appraisal?

Yes. You have the right to receive a free copy of your home appraisal for a first-lien mortgage.

For first lien and certain higher-priced mortgage loan applications, mortgage lenders are required to provide you with a free copy of all appraisals and other written valuations that provide an estimate of the value of your home. For first lien applications, lenders are required to send you a copy:

  • Promptly after the appraisal report is completed, and no later than
  • Three days before your loan closes

If you have a problem with your mortgage closing process, you should discuss the issue or matter with your lender. If you’re having issues with your mortgage, you can also submit a complaint to the CFPB online or by calling (855) 411-CFPB (2372). We’ll forward your complaint to the company and work to get you a response. You may also wish to get your own attorney to take a look at your issue or matter.

I was told I'm buying a home that was flipped and that I have to get a second appraisal. How does that work?

If the home you’re buying is considered a “flip" and you’re getting a higher-priced mortgage loan covered under new mortgage rules, you will have to get a second appraisal.

A “flip” is when:

  • You buy a home from a seller who bought the home less than six months ago and;
  • You pay a certain amount more than the seller paid for the home:
    • 10 percent more if the seller bought the home within the past 90 days.
    • 20 percent more if the seller bought the home in the past 91 to 180 days.

When you buy a “flipped” home, your lender must pay for a second appraisal of the home that includes an inside inspection. The lender cannot charge you for this second appraisal.

Keep in mind that not all flips are subject to this requirement. For example, flips in rural areas are exempt because those areas might have fewer appraisers available. Also, properties acquired from a government agency are exempt.

If you have a problem with your mortgage, you can submit a complaint with the CFPB online or by calling (855) 411-CFPB (2372).

Sources and further reading

The CFPB source passages are U.S. government work in the public domain. Fynoptic has selected, organized, and adapted the material for this guide, including corrections identified through the additional sources listed above. Sources accessed October 27, 2026. This use does not imply agency endorsement or affiliation.

Back to all articles