· By Juan Murray
Appraisal Came In Low? A Boston Home Seller's Guide
When the buyer's lender appraises your home below the agreed price, you and the buyer generally have four paths forward: the buyer brings extra cash to closing to cover the gap, you reduce the price to the appraised value, the two of you meet somewhere in the middle, or the deal falls apart. Which of those is actually available to you depends almost entirely on the appraisal language in your Massachusetts Purchase and Sale Agreement.
What happens when the appraisal comes in low on a Boston home sale?
The buyer's lender will finance only up to the appraised value, so you and the buyer decide how to handle the gap under your Purchase and Sale Agreement. You accepted a strong offer, maybe even one over your asking price, after a couple of buyers competed for the house. Then the buyer's lender sends an appraiser, and the appraised value comes back below the price you agreed to. That is an appraisal gap. For the full contract context that governs what happens next, see the Massachusetts Purchase and Sale Agreement. For what happens if the buyer's financing falls apart at the same time, see when buyer financing falls through in Boston.
It can happen in Jamaica Plain, Roslindale, and Hyde Park, where many homes sell above list: from September 2025 through August 2026, 43% of Jamaica Plain sales, 51% of Roslindale sales, and 48% of Hyde Park sales closed above list price (MLS PIN via Repliers). When homes receive multiple offers, the contract price is pushed up by competition. The appraiser, on the other hand, is looking backward at recent comparable sales. When prices are rising, or buyers are stretching to win, the appraised value can lag behind what a motivated buyer would agree to pay. So if it happens to you, take a breath. A low appraisal is a problem to solve, not the end of your sale.
Key Takeaways
- You generally have four paths: the buyer brings extra cash, you reduce the price, you split the difference, or the deal falls apart.
- The appraisal language in your Purchase and Sale Agreement decides which of those paths is actually open to you.
- From September 2025 through August 2026, 43% of Jamaica Plain sales, 51% of Roslindale sales and 48% of Hyde Park sales closed above list price (MLS PIN via Repliers).
- An appraisal gap clause, such as covering up to $25,000, lets the deal proceed without a price change if the appraisal lands within that band.
- A reconsideration of value goes through the buyer's lender, and your agent can supply supporting comparable sales for it.
What are your options when the appraisal comes in low?
You have four. 1. The buyer brings additional cash to closing. The lender will finance only up to the appraised value, so the buyer covers the difference out of pocket. A buyer who is committed to your home and has the reserves may do this.
2. You reduce the price to the appraised value. This is the option sellers fear, but it is not automatic, and it is not your only move. Whether you should consider it depends on how strong your position is and what your alternatives look like.
3. You split the difference. A common, practical compromise. The buyer covers part of the gap in cash, you come down partway on price, and the deal holds together.
4. The deal falls apart. If neither side moves and the buyer has the contractual right to exit, the agreement can terminate. The question of who keeps the deposit then comes down to your contract.
How does your Purchase and Sale Agreement affect a low appraisal?
Its appraisal language controls what you can do. In Massachusetts, the Purchase and Sale Agreement is the binding contract typically signed within a couple of weeks of your accepted offer, and it is often negotiated by each side's attorney. The appraisal language in that document controls what you can do.
If the buyer kept a full appraisal contingency, their offer is conditioned on the home appraising at or above the purchase price. If it does not, they generally have the right to renegotiate, bring cash, or terminate the agreement and get their deposit back. In that scenario, you have less leverage because the buyer can legitimately walk away without penalty.
If the buyer waived the appraisal contingency, they committed to closing at the agreed-upon price regardless of the appraisal. A low number becomes their problem to fund, not your problem to discount.
If the buyer signed an appraisal gap clause, they agreed to cover the difference between the appraised value and the price, up to a stated amount. For example (illustrative numbers), a buyer offering $700,000 might agree to cover any gap between $675,000 and the offer price, capping their additional cash at $25,000. If the appraisal comes in within that band, the deal proceeds without you touching the price.
One important point: an appraisal gap waiver is not a waiver of the appraisal itself. The appraisal still happens. The waiver is the buyer's promise to cover the difference between the contract price and a low appraised value. The strength of your position in a low-appraisal situation is decided at the offer stage, not after the number comes back.
How do you decide which option to take?
Weigh how competitive your sale was, how big the gap is and whether the appraisal is right. How competitive was your sale? If you had multiple offers and a strong backup buyer, you are in a much stronger spot to hold your price. If your home sat for a while and this was your one solid offer, protecting the deal may be worth more than protecting the last few thousand dollars.
How far off is the appraisal? A gap of a few thousand on a home near a million dollars is very different from a gap of fifty thousand. Small gaps usually get bridged with a quick conversation. Large gaps require a harder look at whether the contract price was ahead of the market.
Is the appraisal actually right? Appraisers are human, and they sometimes miss recent comparable sales, undervalue a renovation, or use comps that do not reflect your block. The lender works with its borrower, the buyer, so a reconsideration of value is requested through the buyer's lender; your agent can supply supporting comparable sales to the buyer's agent for that request. Federal rules give the buyer a copy of the appraisal promptly on completion or three business days before closing, whichever is earlier. A reconsideration does not always change the number, but it is often worth trying before anyone reduces a price.
FAQ
Can I keep the buyer's deposit if they walk away after a low appraisal?
It depends on your contract. If the buyer maintained an appraisal contingency and exercises it properly, they are generally entitled to a refund of their deposit. If they waived that contingency and then failed to perform, your Purchase and Sale Agreement's liquidated damages provision may allow you to retain the deposit. Your attorney will tell you exactly where you stand.
Do I have to lower my price if the appraisal comes in low?
No. Reducing your price is only one of four options, and it is not automatic. The buyer can bring cash, you can split the difference, or you can hold firm if your contract and your market position support it. What you are obligated to do is governed by the appraisal language in your signed P&S.
Why did my Jamaica Plain home appraise below the offer price?
Most often, competition pushes the contract price above what recent comparable sales support. Appraisers value your home relative to homes that have already closed, so when buyers bid above list price to win, the appraisal can lag the agreed-upon price. In Jamaica Plain (ZIP 02130), 43% of sales from September 2025 through August 2026 closed above list (MLS PIN via Repliers).
Can the appraisal be challenged or redone?
Yes. The buyer can ask their lender for a reconsideration of value, and your agent can supply stronger or more recent comparable sales, corrected square footage, or notes on renovations the appraiser may have undervalued. It does not always change the number, but it is frequently worth trying before you negotiate the price down.
Is it better to accept an offer with an appraisal gap waiver?
It can be, especially in a competitive sale. A waiver or a gap clause shifts the risk of a low appraisal to the buyer and gives you a clearer path to closing at your agreed price, as long as the buyer has the cash to cover a gap. A slightly lower offer with a gap waiver can be worth more to you than a higher offer that lets the buyer renegotiate if the appraisal comes in lower than expected.
The bottom line: a low appraisal is a negotiation, not a verdict, and your contract's appraisal language and your market position decide how much room you have.
Sources
- CFPB, My appraisal is less than the sale price: https://www.consumerfinance.gov/ask-cfpb/my-appraisal-is-less-than-the-sale-price-what-does-that-mean-for-me-en-2007/
- 12 CFR 1002.14 (copies of appraisals): https://www.consumerfinance.gov/rules-policy/regulations/1002/14/
- MLS Property Information Network (MLS PIN) via Repliers, September 2025 through August 2026
Have questions? Let's connect.
About Juan Murray
Juan Murray is a Boston broker associate with more than 30 years of experience helping buyers, sellers, and investors across Greater Boston, personally leading every transaction from the first conversation through closing.
RE/MAX Real Estate Center · (978) 581-0801
Equal Housing Opportunity. Juan Murray is licensed as a Broker in Massachusetts, regulated by the Massachusetts Board of Registration of Real Estate Brokers and Salespersons. This article is general information only and does not constitute legal, tax, or financial advice. Confirm your specific costs and obligations with your closing agent, tax advisor, or lender.
