How do I handle a low appraisal as a listing agent in Wisconsin?

Rob Miller, Branch Manager at MadCity Home Loans, gives listing agents a framework for navigating low appraisals without blowing up the deal.

How do I handle a low appraisal as a listing agent in Wisconsin?

A low appraisal is not an automatic deal-killer — but it does require fast, strategic thinking. Here are the options from the mortgage side:

Option 1: Renegotiate the Price

The most common path. Buyer and seller meet somewhere in the middle between the appraised value and the contract price. The buyer brings additional cash to cover the gap, or the seller lowers the price. Often a split is negotiated — each party absorbs part of the gap.

Option 2: Appraisal Review / Reconsideration of Value (ROV)

If you believe the appraiser missed comparable sales, I can submit a formal Reconsideration of Value (ROV) to the lender with new comps and data. This works when there are genuinely strong comps the appraiser overlooked. It doesn't always succeed, but I've had appraisals revised upward with a strong ROV.

Option 3: Buyer Pays the Gap in Cash

If the buyer has cash reserves, they can simply cover the appraisal gap out of pocket. The loan is based on the lower of purchase price or appraised value — so any gap above the appraised value must come from the buyer's own funds, not the loan.

Option 4: Second Appraisal (Limited Scenarios)

Lenders rarely order a second appraisal, but in cases of clear appraiser error, we can escalate within our process to request a new valuation. This is a longer path but occasionally the right one.

Option 5: Terminate

If neither party can reach agreement and the buyer has an appraisal contingency, they walk with their earnest money. The seller relists — ideally with a conversation about realistic pricing in the current market.

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Related Post: Read our buyer-side guide on this topic: How to Save a Deal With a Low Appraisal.