You’ve made it through the inspection. The lender is moving. You’re already thinking about paint colors. Then you get a call from your agent: the appraisal came back $12,000 below the purchase price.
It’s one of the most stressful moments in a home purchase — and it’s also one of the most misunderstood. A low appraisal doesn’t automatically kill the deal. But it does require decisions, and knowing your options before that moment makes the whole thing much more manageable.
Here’s what happens when the appraisal comes in low on a home in Kansas City — and how most deals resolve.
What a Low Appraisal Actually Means
When you’re buying with a mortgage, your lender doesn’t just take your word for what the house is worth. They send an independent appraiser to assess the property, and they’ll only lend against the appraised value — not the purchase price.
So, if you’re buying a home for $350,000 and the appraiser says it’s worth $338,000, your lender will only approve a loan based on $338,000. The $12,000 gap is now your problem to solve.
This matters because that gap has to be covered somehow. You can’t just pretend the number doesn’t exist. What you can do is choose how to address it.
Your Options as the Buyer
You have four real paths when an appraisal comes in low:
1. Renegotiate the purchase price. You can go back to the seller and ask them to lower the price to match the appraised value. Sellers don’t have to agree, but many do — especially if they don’t have backup offers and don’t want to start over. This is the most common outcome in a balanced market.
2. Cover the cash gap. You can bring extra money to closing to cover the difference between the appraised value and your purchase price. This makes sense if you have the cash available and the house is truly worth the higher price to you — but it means you’re paying more than the appraiser thinks the home is worth, and you won’t be able to borrow against that value.
3. Split the difference. Seller comes down some, buyer brings some cash. This middle-ground solution is common when both parties want the deal to close and neither wants to absorb the full gap alone.
4. Walk away. If your contract includes an appraisal contingency — which most standard contracts in Missouri do — you have the right to cancel the deal and get your earnest money back if the appraisal comes in low and you can’t reach an agreement with the seller. You should confirm your contract’s specific language with your agent; contingency terms vary.
At Reside in Kansas City, I walk through these options with buyers before they’re ever in the situation — because knowing what’s possible changes how calmly you can respond when it happens.
What Sellers Can Do
From the seller’s side, a low appraisal isn’t necessarily a signal that you overpriced. Appraisers work from comparable sales data, and in a market where prices are moving fast, the comps available can lag behind what the market is doing.
Sellers can dispute the appraisal — called a “reconsideration of value” — if there are sales the appraiser missed or clear errors in the report. It doesn’t always change the outcome, but it’s worth the conversation with your agent if you believe the value is genuinely defensible.
If the appraisal stands, sellers have to decide how much they’re willing to come down, and whether the deal is worth adjusting for. A seller who has another strong offer in hand has different leverage than a seller who’s been on the market for 60 days.
How Most Deals Actually Resolve
Most low-appraisal situations don’t end in a cancelled contract. In my experience, when both parties want the deal to close, they usually find a way to split the gap. Full price reductions happen. Partial cash covers happen. Sellers make credits at closing instead of dropping the price.
The deals that fall apart over appraisals are usually ones where either the price was genuinely too high to defend, or the buyer and seller were already in a strained negotiation before the appraisal ever showed up.
A low appraisal is a data point, not a sentence. The question is what you do with it.
If you’re currently in contract on a Kansas City home and you’ve just gotten this call from your lender, I’m happy to talk through what your specific situation looks like and what move makes the most sense.
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Jarred Donalson is a Kansas City real estate agent with Reside in Kansas City, specializing in the north-of-the-river KC metro. He works with buyers and sellers in Liberty, Kearney, Smithville, Parkville, Gladstone, and surrounding communities. Learn more at resideinkc.com.
Call or text: 816-719-0829
Email: jarred.donalson@kw.com