What to Do If Your Home Appraisal Comes in Low: Tips for Canadian Homeowners
Register Now04.09.25
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Homeowners
Whether you’re finalizing a home purchase or refinancing your mortgage, a property appraisal is a crucial step in the process. But if the appraised value comes in lower than expected, don’t panic—there are still several ways to move forward.
At the Zadegan Group, we understand how stressful this moment can be. This guide breaks down what causes low appraisals and the practical steps you can take to overcome them.
What’s a Home Appraisal, and Why Does It Matter?
A home appraisal is a professional assessment of your property’s market value, completed by a licensed appraiser—typically a member of the Appraisal Institute of Canada (AIC). Lenders rely on these evaluations to confirm the home is worth the mortgage amount being requested.
Common Situations That Require an Appraisal:
- Applying for a mortgage
- Buying or selling a property
- Refinancing or borrowing against home equity
- Property tax disputes
- Settlements during a divorce or estate division
Why Do Appraisals Sometimes Come in Low?
There are a few common reasons:
- Changing market conditions — Recent home sales in your area may have been below market value.
- Property-related issues — Deferred maintenance, outdated features, or unapproved renovations can negatively impact value.
- Unfavorable comparables — If the appraiser uses older or less relevant local sales, it may skew the valuation.
- Errors in the report — Mistakes like incorrect square footage or missed upgrades do happen.
Your Options If the Appraisal Comes in Low
1. Check the Report for Accuracy
Start by requesting a copy of the appraisal from your lender. Go through it carefully:
- Were comparable properties recent and truly similar?
- Did the appraiser overlook any improvements or renovations?
- Are there factual mistakes (e.g., wrong number of bathrooms or lot size)?
If you notice anything off, document your findings. Your agent can help you gather photos, receipts, and better comparables.
2. Request a Reconsideration of Value (ROV)
You can formally ask the lender to review the appraisal through an ROV. This request should include your supporting documents and a clear explanation of why the appraised value is inaccurate. While not guaranteed, this step can sometimes lead to a revision.
3. Order Another Appraisal
If you believe the first appraisal was flawed, you can request a second opinion from another certified appraiser—with your lender’s approval. Just note: not all lenders will accept a second report, especially if it contradicts the original one.
4. Negotiate the Purchase Price
If you’re in a purchase situation and the lender won’t budge, it’s time to negotiate:
- Buyers: Ask the seller to reduce the price or offer to split the shortfall.
- Sellers: Consider lowering the asking price or offering to cover some buyer costs to keep the sale on track.
Experienced agents are invaluable here—they’ll help both parties find a fair compromise.
5. Cover the Gap with a Bigger Downpayment
When the lender only finances up to the appraised value, you may need to fill the gap yourself. Options include:
- Increasing your downpayment
- Using personal savings, a financial gift, or bridge financing
- Exploring secondary or private financing (if you’re working with a mortgage broker)
6. Explore Alternative Lenders
Some non-traditional lenders, especially those outside the major banks, might be more flexible with appraisals. A mortgage broker can help you compare your options. Be mindful though—alternative lending usually comes with higher interest rates and stricter terms.
Don’t Let a Low Appraisal Derail Your Plans
It’s disappointing when an appraisal doesn’t match expectations, but it doesn’t mean your deal is off the table. With expert support, a cool head, and the right strategy, you can still move ahead.
At the Zadegan Group, we’re here to guide you through every stage—from reviewing appraisal reports to negotiating offers and exploring financing options. We’ve seen it all—and we know how to help you move forward with confidence.
Need help handling a low appraisal? Contact us today—we’ve got your back.
