Buyer Education · August 13, 2026 · 7 min read
I was sitting in a Panera in Bel Air last Tuesday when my phone buzzed. Text from a buyer client: "Lender just called. Appraisal came in $18,000 low. What do we do?"
We'd been under contract on a renovated colonial in Harford County for twelve days. Inspection was clean. The sellers had already started packing. And now this.
This is the moment that separates a good transaction from a train wreck. Because what happens after a low appraisal depends entirely on what you negotiated before you wrote the offer.
Let me walk you through it.
Here's the thing most buyers don't realize until it's too late: the appraisal isn't about whether the house is "worth" what you're paying. It's about whether the bank thinks the house is adequate collateral for the loan they're giving you.
If you're buying a house for $425,000 and the appraisal comes in at $407,000, your lender isn't going to hand over $425,000. They'll lend based on the appraised value. That leaves you with a gap.
In my two decades in education, I taught a lot of math. This one's simple: somebody has to cover that $18,000. The question is who.
The appraisal is ordered by your lender, but it's governed by federal standards set by entities like Fannie Mae and Freddie Mac. Appraisers look at recent comparable sales (usually within the last 90–180 days), adjust for differences in square footage, condition, location, and come up with a number.
Sometimes that number doesn't match the market. Especially in hot pockets like parts of Howard County or Montgomery County, where inventory has been tight and buyers have been pushing prices up faster than the comps can keep pace.
Okay, so the call came. The appraisal's low. What now?
This is the simplest solution, but not always the easiest. You make up the difference out of pocket.
If you offered $425,000, the appraisal says $407,000, and you were planning to put 10% down ($42,500), here's the new math: you still need that $42,500 down payment plus the $18,000 gap. That's $60,500 total.
A lot of buyers in the Baltimore-Washington corridor have been doing this over the past year, especially in competitive markets like Anne Arundel County or near D.C. in Prince George's County. Not fun, but it keeps the deal alive.
If you have an appraisal contingency in your contract (and you should—more on that in a minute), you have the right to ask the seller to lower the price to match the appraisal.
Whether they'll agree depends on a lot of factors. How motivated are they? Do they have another buyer waiting in the wings? What's the local market doing?
In my experience, especially on homes that have been sitting for a while or in slower markets like parts of Cecil County or York County, PA, sellers will often meet you halfway. Maybe they drop the price to $416,000 and you bring an extra $4,500.
You won't know unless you ask. And this is where having a Maryland realtor who actually negotiates instead of just filling out forms makes a difference.
This one's tricky and doesn't always work, but it's worth trying if you genuinely think the appraiser missed something.
Your lender can request a reconsideration of value if you can provide evidence of better comps or point out factual errors in the report. I've seen appraisers pull comps from three zip codes away when there were perfectly good sales two streets over. I've also seen them miss entire renovations.
The bar is high—you need solid data, not just "but we love this house." Your agent should help you gather the evidence, and your lender submits it. HUD's guidelines outline the reconsideration process.
It adds time. Expect another week or two. But if it works, you're back on track.
If you have an appraisal contingency and you can't (or won't) cover the gap, you can terminate the contract and get your earnest money deposit back.
It stings. You've already mentally moved in. But sometimes it's the smartest move, especially if the appraisal revealed something genuinely off about the pricing.
I had a buyer last year walk away from a townhouse in Baltimore City when the appraisal came in $22,000 low. Turned out the seller had priced aggressively based on pending sales that never closed. We found her a better place three weeks later.
Here's where I put on my teacher hat.
An appraisal contingency is a clause in your purchase contract that says if the appraisal comes in below the contract price, you have the right to renegotiate or walk away without penalty.
In the frenzy of 2021–2023, a lot of buyers in Maryland, DC, and Pennsylvania waived this contingency to make their offers more competitive. I get it. But in 2026, with inventory finally starting to move and rates sitting near 6.7%, you have more room to protect yourself.
Even if you're writing a strong offer on a great property in a competitive area like homes for sale in Montgomery County, I'd rather see you include the contingency and sweeten the deal in other ways—maybe a faster closing, a rent-back period, or a clean inspection waiver on minor items.
The Maryland Association of REALTORS® standard contract (Form 1) includes an appraisal contingency by default, but it can be modified or removed. Don't let anyone pressure you into giving it up unless you're very sure of the value and you've got the cash reserves to cover a gap.
Sometimes it's the market moving faster than the data. Sometimes it's a seller who priced too high. And sometimes, honestly, it's an appraiser having a bad day or being unfamiliar with a hyper-local pocket of Harford County where a certain school district commands a premium.
Here's what helps:
Work with a realtor who knows comps cold. Before I write an offer for a buyer, I pull every sale in that neighborhood from the last six months. I know what the appraiser is going to see. If your agent says "let's offer $50,000 over list because it feels right," run.
Don't use last month's pending sales to justify your offer. Appraisers can't. They need closed sales. If the most recent comps are from March and it's now August, that's a red flag.
If you're buying new construction or a heavily renovated flip, understand that appraisers sometimes struggle with these. The comps are older, pre-renovation homes. Your lender may need to bring in an appraiser with specific experience in that type of property.
And if you're in a unique market like parts of Baltimore City with historic rowhomes or rural stretches of Lancaster County, PA, comps can be all over the map. Proceed carefully.
Remember that Tuesday text?
We asked the seller to split the difference. They agreed to drop the price by $10,000. My buyers brought an extra $8,000 to closing. Everyone grumbled a little, but the deal closed three weeks later.
They're happy. The seller moved on. The appraiser probably never gave it another thought.
That's how most of these shake out when everyone's reasonable and the contract is written right.
If you're looking at homes for sale in Harford County, Baltimore County, or anywhere across my Maryland, DC, Delaware, and Pennsylvania footprint, let's talk about appraisals before we write an offer. Not after.
I'll show you the comps. We'll talk about how to structure your financing contingency and your appraisal protection. And if you've already read my post on what I tell every first-time homebuyer before we tour, you know I'm not interested in rushing you into a bad deal.
The national conversation around buyer representation has shifted a lot this year—if you haven't seen my breakdown of the new buyer agency agreements, it's worth a read. But one thing hasn't changed: a good buyer's agent earns their keep when something goes sideways.
And appraisals? They go sideways more often than anyone admits at the open house.
Browse current listings here, or reach out if you've got questions about a property you're already under contract on. I've been doing this long enough to have seen just about every appraisal curveball there is.
You'll get through it. But it helps to know the playbook ahead of time.
Katrina Kirton Sherrod, REALTOR® · Samson Properties · Licensed in MD, DC, PA & DE · 443-616-9770 · Katrina@kkstherealtor.com
“The problem with waiting for the perfect house is that someone imperfect already bought it.” — Anonymous open-house guest