You found the home and the offer was accepted. Then the appraisal comes in below the purchase price. In plain terms: your lender will only base the loan on the appraised value, not the price you agreed to. Someone has to cover the difference, the price has to come down, or the deal has to end. It happens regularly in competitive pockets from Alexandria to Ashburn, and it is a solvable problem, not a dead end.
Under the NVAR financing and appraisal contingency forms used across Northern Virginia, a buyer facing a low appraisal generally has three paths. First, proceed at the agreed price and bring the difference as extra cash at closing. Second, void the contract by delivering the required appraisal notice with supporting evidence inside the contract's deadline. The contingency is what protects the earnest money deposit. Third, propose a new price and negotiate: the buyer's proposed price cannot be set below the appraised value, and both sides get a defined negotiation period to reach agreement.
There is also a proactive option many buyers use at the offer stage: an appraisal gap guarantee. NVAR's conventional financing forms include an "Appraisal Contingency Plus Gap Guaranty" option, which lets you state in the offer that you will cover a shortfall up to a specific dollar amount. It makes your offer stronger to the seller, but only promise a gap your savings can actually absorb, because that money comes from your pocket, not the loan.
Beyond those paths, your agent and lender may request a reconsideration of value, asking the appraiser to review comparable sales that support the price, though the appraiser is never obligated to change the number. FHA and VA loans carry their own appraisal rules, so the playbook can differ by loan type; your lender will tell you which rules apply to your file. Sellers in Leesburg and everywhere else in the region are familiar with these conversations, so a low appraisal rarely comes as a shock to the other side of the table.
The best defense is pricing discipline before you offer: look hard at recent comparable sales, keep a cash cushion beyond your down payment, and have an honest conversation with your agent about what happens if the number comes in light, before you waive anything. Our ★★★★★ 5.0-rated boutique team walks every buyer through each scenario in writing, so there are no surprises at the closing table.
FAQ
Will I lose my earnest money deposit if the appraisal is low?
If your contract includes an appraisal contingency and you deliver the required notice with supporting evidence within the deadline, the contingency protects your deposit. If you waived the contingency, the deposit is at risk, which is why waivers deserve a written plan before you sign.
What is an appraisal gap guarantee?
It is a term in your offer stating you will cover a shortfall between the appraised value and the purchase price, up to a set dollar amount. NVAR's conventional financing forms include a dedicated gap-guaranty option. Only guarantee an amount your reserves can truly cover.
Can the seller just refuse to lower the price?
Yes. Renegotiation requires both sides to agree, and a seller can hold firm, accept your new price, or counter somewhere in between. If no agreement is reached within the contract's negotiation period, the buyer typically proceeds under the remaining contract terms or exits according to the contingency.
Can the appraisal be challenged?
Your agent and lender can request a reconsideration of value with supporting comparable sales, but the appraiser makes the final call. Lenders may order a second appraisal in some cases. Rules differ by loan type, so ask your lender what applies to your loan.