What happens if the appraisal comes in lower than the offer? In Arizona, the standard Arizona REALTORS® residential resale contract makes a financed purchase contingent on an appraisal of at least the purchase price, unless the buyer waived it. If the value comes in short, the buyer has 5 days after notice of the appraised value to cancel and get the earnest money back.
Does the deal have to die? No. Most low appraisals end in one of four moves: the seller lowers the price, the buyer brings cash to cover the gap, the two split the difference, or the buyer challenges the appraisal through the lender. Watch the clock: if the buyer doesn't cancel in time, the contingency is waived.
Data note: Contract terms come from the Arizona REALTORS® Residential Resale Real Estate Purchase Contract. Federal rules come from Fannie Mae's reconsideration of value requirements and Regulation B (12 CFR 1002.14). Always read the version of the contract you signed.
Why the Appraisal Matters
- Lenders generally base the loan on the lower of the price or the appraised value
- A low value means the loan-to-value math changes, which can mean more cash down to keep the same loan
- The appraisal is the lender's protection; the appraisal contingency is the buyer's
What the Arizona Contract Says
The Contingency
- Applies when the buyer is getting a loan, unless waived
- The buyer's obligation is contingent on an appraisal for at least the purchase price
- 5 days after notice of the appraised value to cancel with an earnest money refund
- If the buyer cancels over the appraisal, the seller can request a copy of the written appraisal
If the Contingency Was Waived
- A checkbox lets the buyer waive the appraisal contingency
- If the loan then fails because of that waiver, the contract lets the seller keep the earnest money as sole damages
- Waiving can strengthen an offer, but only with cash reserves to cover a gap
Who Pays
- The contract specifies whether the buyer or seller pays the appraisal fee
- Appraisal fees are non-refundable
- Lender-required re-inspection fees fall to the buyer
Your Four Options
1. Renegotiate the Price
- The seller lowers the price to the appraised value, or partway
- Often the cleanest fix when other buyers would face the same appraisal
2. Cover the Gap in Cash
- The buyer pays the difference between price and value on top of the down payment
- Makes sense when the home is the right one and reserves allow
3. Split the Difference
- A partial price cut plus partial buyer cash
- Seller concessions can sometimes bridge part of it; see our rate buydown vs. price reduction guide
4. Challenge the Appraisal
- Ask the lender for a reconsideration of value (ROV)
- Fannie Mae requires lenders to have a borrower-initiated ROV process for applications dated on or after Oct. 31, 2024
- One borrower ROV per appraisal, submitted before closing
- Back it with factual errors (square footage, bed/bath count, pool, upgrades) and better comparable sales
Your Right to See the Appraisal
Regulation B (12 CFR 1002.14) requires a lender making a first-lien home loan to:
- Give you a copy of every appraisal and written valuation
- Deliver it promptly on completion or three business days before closing, whichever is earlier
- Provide it at no charge for the copy itself
Read the report closely. Errors in living area, condition or comparable selection are the most useful grounds for an ROV.
How Sellers Can Head Off a Low Appraisal
- Price with recent closed sales, not list prices or online estimates
- Prepare a comps and upgrades packet for your agent to give the appraiser
- Make the home accessible and point out permitted improvements
- Leave room in your timeline, since appraisal issues can push closing; see how long it takes to close in Arizona
“A low appraisal is a negotiation, not a verdict. When it happens, I pull the report the same day, check every square foot and every comp, and call the other agent with a plan instead of a problem. Most of the time, the deal that survives is the one where both sides see the same numbers early.”
— Elizabeth Vijan, Tackett Team, eXp Realty
FAQ: Low Appraisals in Arizona
What happens if the appraisal comes in lower than the offer in Arizona?
The buyer has 5 days after notice to cancel and recover earnest money, or the parties renegotiate.
Can you dispute a low appraisal?
Yes, with a reconsideration of value through your lender, one per appraisal, before closing.
Do I get a copy of my appraisal?
Yes, free, promptly or three business days before closing.
Who pays for the appraisal if the deal falls through?
Whoever the contract names; the fee is non-refundable.
Buying or Selling in Scottsdale or Phoenix?
I'll price, negotiate and prepare the appraisal packet so value questions are handled before they become deal problems.
Elizabeth Vijan | Tackett Team, eXp Realty
Scottsdale & Phoenix Real Estate
Talk to Elizabeth · Call or text 602-885-7752
Sources: Arizona REALTORS®: Residential resale purchase contract, Feb. 2026 (PDF) · Arizona REALTORS®: Residential resale transaction forms · Fannie Mae: Reconsideration of value implementation date · Fannie Mae Selling Notice: Reconsideration of value (PDF) · eCFR: 12 CFR 1002.14, appraisals
Disclaimer: General information, not legal advice. Contract terms vary by form version and negotiated changes; read your contract and consult a real estate attorney with legal questions. Information deemed reliable but not guaranteed. Equal Housing Opportunity.
Tackett Team, eXp Realty · Get in touch