Home appraisals: the process, your rights and low values

Who orders it, and who may not lean on it

The lender orders the appraisal, not you or the seller, although the fee is usually passed on to you. For a loan secured by your principal dwelling, Regulation Z forbids anyone involved in the transaction from coercing, bribing or otherwise pressuring an appraiser toward a value, and forbids tying the appraiser’s pay to the loan closing.

The same rule lists what is allowed: asking the appraiser to consider additional, appropriate property information, including information about comparable properties; to give more detail or explain the basis for the value; or to correct errors. In practice the listing agent meets the appraiser for access and can hand over a short sheet of recent sales and improvements, with dates. Nobody should name a target number.

Timing and your copy

Lenders usually order the appraisal once you have applied with a signed purchase contract. Scheduling depends on the appraiser’s workload and access to the home, so ask your loan officer when it was ordered and arrange access early, well ahead of the financing deadline in your contract.

Regulation B requires the lender to give you a copy of all appraisals and other written valuations developed for a first-lien loan on a dwelling, promptly upon completion or three business days before consummation, whichever is earlier. You can waive that timing and receive the copies at or before closing, but the waiver generally has to be given at least three business days before closing; the main exception is a revised report with only clerical changes. If you waive and the loan does not close, the lender must send the copies within 30 days after it determines the loan will not close. The lender must tell you about this right within three business days of your application, may not charge for the copy itself, and must provide it whether the loan is approved, denied or withdrawn.

Read the report when it arrives: the property facts, the comparable sales and their adjustments, and any condition that makes the appraisal “subject to” repairs. Raise errors in room count, living area or parking with your loan officer the same day.

If the appraisal comes in low

For a Fannie Mae purchase loan, the loan-to-value ratio uses the lower of the sales price or the appraised value. A low appraisal therefore means more cash from you or a smaller loan at the same price. The CFPB’s advice is to get a copy, use it in negotiation, and check whether your contract lets you cancel.

Some buyers in competitive markets write an appraisal gap clause into the offer, agreeing to cover a shortfall up to a stated amount. Set that number in advance from the cash you actually have, not in the middle of a bidding round.

• Pay the gap in cash, if you still believe in the price and have the funds.
• Renegotiate: ask the seller to come down to the appraised value, or meet partway.
• Challenge the appraisal through the lender’s reconsideration of value process, if there are errors or better sales.
• Restructure the loan, for example with a larger down payment, after checking the effect on mortgage insurance and pricing.
• Use your contract’s protection, if its wording and deadline allow you to withdraw.

Deadlines in your contract

In Massachusetts, the financing protection lives in your offer and purchase and sale agreement. Contracts here commonly include a financing contingency with a date, often called the mortgage commitment date. What it lets you do, how notice must be given, and whether a low appraisal on its own is enough all depend on the wording, so ask your attorney well before that date.

If the appraisal arrives close to the deadline, ask your attorney about a written extension before the date passes. Once it passes, the protection may be gone. Keep three dates in one place: when the appraisal was ordered, when the report arrived, and the commitment date.

Reconsideration of value (ROV)

In May 2024 Fannie Mae, working with Freddie Mac and HUD, published requirements for a borrower-initiated reconsideration of value. Fannie Mae’s Selling Guide requires lenders to have an ROV process, to disclose it to you when the appraisal is provided, and to accept requests based on an unsupported value, a deficiency in the report, or a concern that the appraisal reflects discrimination.

You get one borrower-initiated ROV per appraisal report, and it must be made before closing. The request goes to the lender, which reviews it before sending it to the appraiser. It needs your name, the property address, the appraisal’s effective date, the appraiser’s name, the date of the request, a description of the problem areas, and up to five alternative comparable sales with their data source, such as the MLS listing number, plus an explanation of why they fit better.

What tends to work: a factual error, such as the wrong living area or a missing bathroom, or closed sales that are clearly closer in location, type, size and date than the ones used. Active listings, or a higher sale that is not truly comparable, rarely change the result. Other loan programs set their own process, so ask your lender which one applies.

Loans that skip the appraisal

Fannie Mae’s automated underwriting may offer value acceptance, which lets a loan close without an appraisal. As of October 2026 it can cover one-unit homes, including condos, used as a principal residence or second home, subject to conditions. It is not available for two- to four-unit properties, co-ops, or a sales price or value of $1,000,000 or more, among other exclusions. The offer generally depends on a prior appraisal in Fannie Mae’s data, and it cannot be used if an appraisal is obtained.

Skipping the appraisal saves time and the fee, but you also give up an independent look at what you are paying. If you are stretching on price, talk the trade-off through with your lender before you accept.