Before anything else, find the date you received written notice of the appraised value and pull out your signed contract. That date and the appraisal contingency language decide whether you can walk away, and every other move, from renegotiating to bringing cash, runs on that clock.
Appraisal Comes in Low on a Scottsdale Home? Your Options
What happens if the appraisal comes in low on a Scottsdale home?
When an appraisal comes in low on a Scottsdale home, the deal isn’t automatically over. Your lender will only base the loan on the appraised value, so you generally have four paths: negotiate a lower price with the seller, bring extra cash to cover the gap, ask the lender for a reconsideration of value backed by better comparable sales, or cancel if your contract’s appraisal contingency still applies.
Key Takeaways
- Scottsdale homes sold over roughly the last 90 days had a median sale price of $972,610, so even a small percentage gap between contract price and appraised value can be a large dollar shortfall.
- Recently sold Scottsdale homes took a median of 27 days from listing to going under contract, which is the pace appraisers’ comparable sales are trying to keep up with.
- A low appraisal is a financing and contract problem first, and it does not automatically cancel your purchase.
- The Arizona REALTORS® resale contract language gives a buyer five days after notice of the appraised value to cancel and recover earnest money, but only if the appraisal contingency applies and was not waived.
- A seller is never required to lower the price because of an appraisal, so any reduction, credit, or split of the gap has to be agreed to and signed.
Most buyers hear “the appraisal came in low” and assume the deal is dead. It usually isn’t. We understand this is such a stressful situation, especially when you’ve already paid for an inspection and started planning the move. The good news is that you have more room to work than the first phone call from your lender suggests.
What are your options when an appraisal comes in low on a Scottsdale home?
You have four realistic options: renegotiate the price, cover the gap with additional cash, challenge the appraisal with better evidence, or cancel under your contract. Which ones are open depends on your signed contract and what your lender will approve.
Renegotiate the price or terms
The seller is not automatically required to reduce the price because the appraisal is below the contract price. But many sellers would rather adjust than start over with a new buyer, a new inspection cycle, and another round of showings. A negotiation can involve a straight price reduction, a credit where your loan program and lender allow it, a change in how agreed costs are allocated, or a mix of these. Any change has to be documented in writing, and the lender needs to approve it if it touches the loan or the settlement statement.
Bring additional cash
If your lender won’t lend against the contract price, you can sometimes cover the shortfall with your own funds, subject to the lender’s approval and your contract’s appraisal provisions. Here’s what catches buyers off guard: the cash needed can be larger than just the amount of the shortfall. Extra funds can change your down payment, your loan-to-value ratio, your reserves, and your closing funds. So be sure to get a revised cash-to-close and underwriting requirements from your lender in writing before you agree to anything.
Challenge the appraisal
You can ask your lender whether a reconsideration of value is available. These requests are evidence-driven. Strong ones include relevant comparable sales the appraiser didn’t use, factual corrections (square footage, lot size, bedroom count), or improvements that were missed. A request doesn’t guarantee a new number, and the lender, not you or the seller, controls whether the appraisal is accepted or replaced.
Cancel under the appraisal contingency
If your contingency is intact, you may be able to cancel and receive your earnest money back. We’ll cover the contract mechanics below, because this is where deadlines matter most.
| Option | Who has to agree | What to confirm first |
|---|---|---|
| Renegotiate price or terms | Buyer and seller, plus lender if the loan changes |
Whether your loan program allows the credit or concession |
| Bring additional cash | Buyer and lender | Revised cash-to-close, reserves, and qualification |
| Challenge the appraisal | Lender controls the outcome | Whether a reconsideration of value is available and how to submit it |
|
Cancel under the |
Buyer gives notice within the contract window |
Notice date, deadline, and whether the contingency was waived |
How does your signed contract change the answer?
Your signed contract controls your rights after a low appraisal. Start there before you respond to anyone.
In the Arizona REALTORS® residential resale contract language, the buyer’s obligation is contingent on an appraisal acceptable to the lender for at least the purchase price. If the property doesn’t appraise at the purchase price, the buyer has five days after notice of the appraised value to cancel and receive the earnest money, unless the appraisal contingency has been waived or federal law prevents that result. Arizona REALTORS® also publishes an Appraisal Contingency Notice form used with the contract, which gives a buyer the chance to continue or not continue when the home fails to appraise for at least the purchase price. You can find both on the Arizona REALTORS® standard forms page.
That window is a deadline. Find the date you received written notice of the appraised value, count out the time to the deadline, and get guidance from your lender and your licensed real estate professional (or Arizona real estate counsel for a contract dispute) before it passes. Missing the deadline can change the remedies available to you.
What if you waived the appraisal contingency?
You may still be able to negotiate with the seller or ask the lender for a reconsideration. But the automatic contractual exit described above may not be available. The effect depends on the exact waiver language, your other contingencies, your financing terms, and the default provisions in your contract. If you waived it and the number comes in low, talk to us and we will explore your options.
Who closes the deal if you amend it?
Your title company handles closing and the handling of funds, and it needs the fully executed amendment and lender-approved instructions. If you want a refresher on how the pieces fit together, see our post on what happens next once you’re under contract in Scottsdale.
Why do Scottsdale comparable sales decide the outcome?
Comparable sales decide the outcome because an appraiser values your home against recent nearby closed sales, and a challenge only works if you can show better ones. In Scottsdale, “nearby” can mean very different price points a few miles apart.
Here’s the expectation versus the reality. You’d expect a market this active to make appraisals easy to support. Recent local market data shows 1,421 homes sold in Scottsdale over roughly the last 90 days, with a median sale price of $972,610, and sold homes took a median of 27 days from listing to going under contract. But there are also 2,271 homes for sale now and 758 new listings in the last 30 days. That means there is plenty of sales activity to cite, but an individual home’s value still comes down to condition, street, build year, and timing.
The medians below show how much the comparable set shifts from one part of town to the next.
| Area | Median Sale Price |
|---|---|
| North Scottsdale | $1,372,000 |
| DC Ranch | $2,648,000 |
| Desert Highlands | $3,925,500 |
| Grayhawk | $875,000 |
| Troon North | $1,200,000 |
These are area-level medians, not a prediction for any one house. They do show why a generic “find some comps” approach fails. A golf community home with a view lot, a remodeled interior, or a pool that was missed in the appraiser’s adjustments needs comparable sales that match those features. That’s where our local knowledge of individual communities, from Grayhawk to Desert Highlands, can assist if an appraisal comes in low.
The seller’s side matters too. A home priced above what comparable sales support is the usual reason a low appraisal happens, which is why we advise sellers that pricing right matters in Scottsdale’s market. If you’re a buyer, the flip side applies. Your offer is only as safe as the comparable sales behind it.
What should you do in the first few days after a low appraisal?
Here’s the sequence we walk our clients through:
- Get the lender’s written appraisal result and note the exact date you received notice of the appraised value.
- Read your signed contract and any addenda to confirm whether the appraisal contingency applies, whether it was waived, and when your deadline falls.
- Ask the lender whether a reconsideration of value is available and what they need to review it.
- Assemble stronger comparable sales and factual corrections, such as missed improvements or incorrect square footage.
- Decide your maximum additional cash and get the lender’s revised cash-to-close before you commit to anything.
- Negotiate with the seller once you know your own limits, and put every agreed change in a signed amendment.
- Send the executed amendment to the title company along with any lender-approved instructions.
Your budget matters here more than the gap itself. If you haven’t stress-tested what extra cash would do to your reserves, our post on how much house you can afford in Scottsdale is a useful place to start. Every situation is different, and the right move depends on your loan, your contract, and how much you love this particular home. From there, you will know if you need to fight, pay, or walk.
One more thing, and it applies to buyers and sellers alike. A low appraisal feels personal, but it’s an opinion of value on one date, supported by a handful of sales. It can be wrong, but it can also be accurate.
You can read what our clients say on Google, Zillow, and Realtor.com.
FAQ
Can I cancel an Arizona home purchase after a low appraisal and get my earnest money back?
Possibly, if your appraisal contingency applies and wasn’t waived. The Arizona REALTORS® contract language gives the buyer five days after notice of the appraised value to cancel and receive the earnest money. Your signed contract, addenda, and notice date will determine the outcome, so confirm them before you act.
Who pays the appraisal gap, the buyer or the seller?
Neither automatically. The gap is whatever the parties agree to handle, and options include the buyer bringing cash, the seller reducing the price, a split, or a permissible credit. Your lender has to approve anything that changes the loan or the settlement statement.
Can the seller lower the price after a low appraisal?
Yes, but the seller isn’t required to. A reduction only happens if both sides agree and sign a written amendment. Many sellers consider it because the alternative is starting over from scratch.
How do I challenge a low appraisal, and can better Scottsdale comps help?
Ask your lender whether a reconsideration of value is available, then submit relevant comparable sales and factual corrections the appraiser didn’t consider. This research is something that we can help you with. Better comps for your specific community and home features can help, but the lender decides whether the appraisal is accepted or replaced, and a request doesn’t guarantee a new valuation.
What if I waived the appraisal contingency?
You can still negotiate with the seller and ask for a lender reconsideration, but the contractual right to cancel and recover your earnest money for a low appraisal may not apply. The exact waiver wording and your default provisions matter, so review them with your agent right away.
A low appraisal changes the financing, and it rarely has to end the purchase. If you’re staring at one right now, or you want a plan before you write an offer, let’s connect, and we’ll review your contract and the comparable sales together.
Equal Housing Opportunity. Joyce Tawes and Heather Tawes Nelson, Associate Brokers, eXp Realty, licensed in Arizona and regulated by the Arizona Department of Real Estate. This article is general information, not legal, tax, or financial advice. Confirm your own numbers and contract terms with your title company, tax advisor, or lender.
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