When the appraisal was done on the home you are purchasing, it came back below value. This means the amount you offered on the home was more than what the home appraised for.

Some people get upset, some people get excited.

To the upset buyers: This doesn't mean it is the end, and things can be done to challenge the appraisal if you would like that done. As your agent, I would hope you would want the seller to drop the price before you ask me to aide in the fight to make the value go up. If the seller agrees to drop the price, that solves it. Sometimes the option is there for you as the buyer to offer to cover some/all of the difference. Believe us in that it's not the end, and if your Realtor has their act together an appraisal will rarely if ever kill a deal.

To the excited buyers: This doesn't mean you get the home at a cheaper price automatically. Sorry, but it only happens if the seller agrees to drop the price to the appraised value. The listing agent does have the opportunity to challenge the appraisal. Sometimes it's a matter of misunderstanding, missed comps, or not having all of the necessary information to properly be able to do the appraisal.

It's important to remember that appraisers are people, just like you and me. They have a job to do and there is no reason to think they aren't going to do the best job possible. Mistakes do happen, but they can be corrected and/or addressed. It's important that the appraiser be given plenty of information on the home, and so many times when an appraisal comes in too low it's because someone did not get them the information necessary.

You can Challenge a Low Appraisal often with success if you know how to do it.