What happens if the appraisal comes in low?
The loan re-sizes to 70% of the appraised value — on purchases, 70% of the lesser of price or appraisal — and you choose how to respond: bring more cash, renegotiate the price, or walk. The rate and terms on your term sheet do not change; only the amount does.
Run the math immediately. Contract at $1M with a $700K loan planned; appraisal lands at $920K; new maximum loan is $644K, so the gap is $56K of additional cash. Sometimes that is absorbable, sometimes it is grounds to reopen the price with the seller — a written appraisal from a licensed rural appraiser is the strongest renegotiation tool a buyer ever holds.
If you believe the appraisal is genuinely wrong, the remedy is a reconsideration of value: you submit specific comparable sales the appraiser missed — not an opinion that the number feels low — and the appraiser responds. Rural markets have thin comp data, so a borrower who farms the county sometimes really does know a relevant private sale the databases lack. Reconsiderations succeed on evidence and take about a week.
On refinances a low value works the same way with less drama: the cash-out shrinks to fit 70% of value, and you decide whether the smaller number still does the job. There is no penalty for walking away at this stage beyond the appraisal fee already spent.
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