What Happens If the Appraisal Comes In Low on a home in Central Mississippi?

What happens if a home appraisal comes in low in Central Mississippi?

When a home appraises for less than the price you agreed to pay, the lender will only finance the lower number, which leaves a gap between the loan and the contract price. In Central Mississippi you generally have four moves as a buyer: renegotiate the price, cover the difference in cash, request a reconsideration of value, or use your appraisal contingency to cancel and keep your earnest money. Sellers can lower the price, offer a concession, or hold out for another buyer.

By April Smith | June 28, 2026

A low appraisal is one of those moments that turns a calm transaction into a stressful one overnight. Everyone was happy, the contract was signed, and then a single number landed in the file and changed the math. If you are buying or selling in Brandon, Flowood, Madison, Pearl, or Ridgeland, this is worth understanding before it ever happens to you.

Here is the part that catches people off guard. Your lender does not lend on the price you agreed to pay. It lends on the appraised value. So if you are under contract at $320,000 and the appraisal comes back at $305,000, the bank bases your loan on $305,000. That $15,000 difference does not disappear. Someone has to account for it, and how you handle it decides whether the deal closes or falls apart.

Low appraisals are not rare, especially when prices are climbing faster than recent sales can keep up with. Brandon home values have risen over the past year, with the median sale price hovering in the low $300,000s, and Madison has climbed even faster. When values move quickly, appraisers working from older comparable sales sometimes land below where the market actually is. That gap is exactly where buyers and sellers get stuck.

Your options as a buyer when the appraisal comes in low

The good news is that a low appraisal is rarely the end of the road. You usually have four paths, and the right one depends on your cash position, how much you want the home, and what the seller is willing to do.

1. Renegotiate the price. This is the most common outcome. You go back to the seller and ask them to lower the price to the appraised value, or to meet you somewhere in the middle. In a market where homes are still selling but not flying off the shelf, many sellers would rather adjust than start over with a new buyer and risk the same appraisal again.
2. Cover the gap in cash. If you have the funds and you love the home, you can pay the difference out of pocket on top of your down payment. On that $15,000 gap, that means bringing an extra $15,000 to the closing table. With 30-year rates sitting around 6.5 percent in mid-2026, plenty of buyers decide a home worth keeping is worth covering, but only you can decide if that money is better spent here or saved.
3. Request a reconsideration of value. If the appraisal missed a recent comparable sale, overlooked a renovation, or contains a factual error, the lender can submit a reconsideration of value, sometimes called an ROV. You and your agent gather better comparable sales or documentation, and the appraiser reviews whether an adjustment is warranted. It does not always change the number, but when the appraiser truly missed something, it can.
4. Walk away using your appraisal contingency. If your contract includes an appraisal contingency, and most financed offers in Central Mississippi do, a low appraisal lets you cancel the contract and get your earnest money back. In Mississippi that earnest money is typically held in trust by the closing attorney or the broker, not handed to the seller, so a clean cancellation under a valid contingency returns it to you.

The path you choose is genuinely situational. A first-time buyer stretching to afford a home will weigh this very differently than a move-up buyer with equity from a previous sale. This is exactly the kind of decision I walk my clients through before they ever sign, so the contingency language is already working in their favor when it matters.

What sellers can do about a low appraisal

If you are selling and the buyer's appraisal comes in under your contract price, you have fewer levers than the buyer, but you still have real choices.

• Lower the price to the appraised value. If you want this deal done and you are not confident a new buyer would appraise any higher, meeting the number is often the cleanest path. The market spoke, and starting over carries its own costs in time and carrying expenses.
• Offer a concession instead. Sometimes you can keep more of your price by helping the buyer in another way, such as covering part of their closing costs so they can free up cash to bridge the gap. The numbers can land in a similar place while keeping the contract intact.
• Hold firm and wait for another buyer. If you genuinely believe the appraisal was low and you are not in a hurry, you can decline to adjust and look for a buyer paying cash or bringing extra funds. Just know the next appraisal could land in the same spot, so this works best when you have time and conviction.

The best defense against a low appraisal is pricing the home accurately from the start. A home priced to match real, recent sales is far less likely to trip on the appraisal later. That is one reason I put so much care into pricing strategy, and you can read more about how I approach it in my guide to selling your home for top dollar in Central Mississippi. Pricing right is not about leaving money on the table. It is about not handing the deal a reason to fall apart.

How the appraisal fits into a Central Mississippi closing

Mississippi is an attorney-closing state, which means a closing attorney, not an escrow company, handles the closing and coordinates the moving parts. The appraisal usually happens after your inspection and after your loan application is moving, ordered by the lender once you are under contract. That timing matters, because by the time a low appraisal shows up, you are often a couple of weeks into the process with inspection money and an appraisal fee already spent.

If your appraisal does come in low, here is a simple way to work through it:

1. Get the full appraisal report. Read what the appraiser actually used for comparable sales. The reasoning tells you whether a reconsideration of value has a real shot.
2. Talk to your agent about recent comps. Sometimes a strong sale closed days after the appraiser pulled their data. Fresh evidence is the foundation of any successful value review.
3. Know your contingency deadlines. Your right to renegotiate or cancel is tied to dates in the contract. Missing a deadline can quietly cost you the protection you were counting on.
4. Run the real numbers before you decide. Covering a gap, accepting a concession, or walking away all have different long-term costs. Put actual dollars to each option rather than reacting to the stress of the moment.

Every one of these steps moves faster and lands better when you have someone who has done it before sitting on your side of the table.

Frequently Asked Questions

Who pays for the home appraisal in Mississippi?

The buyer typically pays for the appraisal, usually somewhere in the range of $400 to $600 depending on the property and location, and it is generally collected as part of your loan costs. Because you have already paid for it by the time results come back, a low number stings a little more, which is why understanding your options ahead of time helps.

Can a buyer back out of a home purchase if the appraisal is low?

Yes, if your contract includes an appraisal contingency. That contingency lets you cancel and recover your earnest money when the home appraises below the contract price and you cannot reach an agreement with the seller. Without that contingency, walking away is much harder and your earnest money may be at risk, so it is worth confirming the language before you sign.

Does the seller get to see the buyer's appraisal?

The appraisal belongs to the lender and the buyer who paid for it, so the seller is not automatically entitled to a copy. In practice, when a low appraisal triggers a renegotiation, the buyer's side often shares the relevant value with the seller to support the conversation. How much gets shared usually comes down to strategy and what each side is trying to accomplish.

How often do appraisals actually come in low?

Most appraisals come in at or above the contract price, but low appraisals become more common when prices are rising quickly, as they have been across much of Central Mississippi. When recent sales lag behind where buyers are willing to pay, appraisers can land below the agreed number. Accurate pricing and strong comparable sales are the best protection on both sides.

What is a reconsideration of value?

A reconsideration of value, or ROV, is a formal request asking the appraiser to take another look using additional information, such as a comparable sale they missed or a correction to a property detail. Your lender submits it, and the appraiser decides whether an adjustment is warranted. It is not a guarantee, but it is a legitimate path when the original report overlooked real evidence.

The bottom line

A low appraisal feels like a wall, but it is almost always a fork in the road. Buyers can renegotiate, cover the gap, request a value review, or use a well-written contingency to step back without losing their earnest money. Sellers can adjust, offer a concession, or wait. The right move depends entirely on your numbers, your timeline, and how much this particular home matters to you.

If you want to know exactly what to expect at every step of buying a home in Central Mississippi, including how to protect yourself when surprises like this come up, the Home Buyer Roadmap walks you through all of it. You can find it at https://www.aprilsmithrealestate.com/home-buyer-roadmap.

And if you are on the selling side and want to price your home so the appraisal is the last thing you have to worry about, you can see what your home is really worth in a couple of minutes with my free Home Evaluation Tool. Knowing your number before you list is the simplest way to keep a deal from stumbling at the appraisal.

About April Smith

April Smith is a REALTOR® and Broker Associate with Southern Homes Real Estate, serving Brandon, Flowood, Pearl, Madison, Ridgeland and the surrounding Central Mississippi communities. She specializes in strategic marketing plans for every listing, drawing on her 20+ years of experience in media production and marketing prior to real estate. She works with first-time buyers, move-up buyers, and seniors, guiding each of them through every step of the process. Licensed since 2020 and holding the ABR, PSA, and C2EX designations, she ranks in the top 10% of the Central Mississippi MLS and is known for five-star client service across Google and Zillow. Her work is guided by her Christian faith and a commitment to serving every client with honesty, integrity, and the kind of attentive care that makes her clients feel personally guided through every step.