You found the house. You signed the contract. You picked the lot. You chose the finishes. Then the appraisal comes back lower than the price you agreed to pay. Now what? First, don't panic. A low appraisal doesn't automatically mean you can't buy the home. It means the appraised value and the purchase price don't match, and that can create a financing problem that needs to be addressed. With new construction, this can happen for a few different reasons. Understanding what happens next can help you make a better decision before you put more money into the transaction.
Start With the Numbers
Let's say your new construction home has a contract price of:
- $525,000
The appraisal comes back at:
- $500,000
You have a:
- $25,000 appraisal gap
That doesn't necessarily mean the builder has to reduce the price. And it doesn't necessarily mean you have to bring $25,000 to closing. It means you now need to understand:
How much will the lender finance, and what does your contract allow you to do? That's where the real decision begins.
Go deeper