When your home appraises below the contract price in Texas, you have four options: reduce the price to the appraised value, ask the buyer to bring cash to cover the gap, split the difference somewhere in the middle, or hold your price and risk the buyer terminating under the Third Party Financing Addendum. Which one is right depends on your buyer's financing, how the contract was written, and what your home would realistically sell for if it went back on the market. In today's DFW buyer's market, a formal Request for Reconsideration of Value can also be worth pursuing before you give up any price.
By Sherra Cameron, REALTOR®
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You did everything right. You priced your Plano home, you got it under contract, and you may have already made an offer on your next place. Then the appraisal lands, and it comes in ten or fifteen thousand dollars under your sale price. Suddenly the deal you thought was done is wobbling.
This is one of the most common calls I get from sellers in Plano, Carrollton, The Colony, and Lewisville right now, and there's a reason for that. In a softening market, appraisals matter more than they did two years ago. So let's walk through exactly what a low appraisal means, why it's happening more often in 2026, and the four paths you can take.
Why appraisals are coming in low across DFW in 2026
An appraisal is a licensed appraiser's opinion of value, and the lender relies on it to make sure they aren't lending more than the home is worth. When the appraised value comes in under your contract price, the lender will only finance against the lower number. That gap has to be resolved before the loan can close.
Right now, three things are driving low appraisals in North Dallas:
- Lagging comparable sales. Appraisers pull recent closed sales, and comps are backward-looking by nature. In a market where prices have softened and roughly a quarter of DFW listings have taken a price cut, the comps an appraiser leans on can tell a different story than the offer you accepted.
- Micro-market unfamiliarity. An appraiser covering a wide territory may not know the difference between two streets in West Plano or the premium a specific floor plan commands. The new-construction corridor in Prosper and Celina is especially tricky, because builder base prices, lot premiums, and upgrades don't always show up cleanly in the data.
- Undervalued upgrades. Your renovated kitchen, your extended patio, or your luxury finishes are real, but if the appraiser can't find comps that captured similar work, those dollars can get discounted.
None of this means your home isn't worth what a buyer agreed to pay. It means the paperwork and the market data need to catch up, and that's where your strategy comes in.
Your four options when the number comes in low
Here's the part every seller wants: what can you actually do? In Texas, it comes down to four choices.
1. Reduce the price to the appraised value.
This is the cleanest fix and, in the current DFW market, the most common outcome. You lower the sale price to match the appraisal, the loan works, and the deal closes. It costs you real money, but it keeps a qualified buyer at the table. In a market with more sellers than buyers, that certainty has value, especially if you're racing a closing date on your next home.
2. Ask the buyer to cover the gap in cash.
The buyer can bring the difference to closing in addition to their down payment. The appraised value sets what the lender will finance, but nothing stops a buyer from paying more out of pocket. The catch: in a buyer's market, most buyers know they have options and are reluctant to hand over extra cash for a home that just appraised lower. This works best when the buyer truly wants your specific home and has the reserves to do it.
3. Split the difference.
This is the negotiated middle, and it's often where deals land. You come down part of the way, the buyer brings part of the gap in cash, and you meet somewhere reasonable. On a fifteen thousand dollar shortfall, that might look like you reducing eight thousand and the buyer covering seven. The right split depends on how motivated each side is and how the rest of the contract was negotiated.
4. Hold your price and let the buyer decide.
You can decline to move. At that point, the buyer chooses whether to cover the full gap or walk. Whether they can walk with their earnest money intact depends on the contract. Under the TREC One to Four Family Residential Contract, the Third Party Financing Addendum can give the buyer the right to terminate and recover earnest money if the property doesn't satisfy the lender's underwriting requirements, which include the appraisal. But buyers can and do waive that appraisal protection to make their offers stronger, so whether you're exposed depends on what was negotiated up front. This is exactly the kind of clause I read closely before advising any seller to hold firm.
Before you cut the price, consider the ROV
Here's a move a lot of sellers don't know they have. If the appraisal used weak comps or contains factual errors, such as the wrong square footage, a missed bedroom, or sales that aren't truly comparable, your buyer's lender can submit a Request for Reconsideration of Value, often called an ROV.
An ROV isn't a guarantee. In DFW this year, roughly 15 to 20 percent of challenges succeed, but when they do, they often move the value ten to thirty thousand dollars. That's a meaningful swing. The key is giving the appraiser something concrete to work with: better comparable sales, corrected property facts, or documentation of upgrades the original report overlooked. This is where an agent who knows the local inventory earns their keep, because pulling the right comps is the whole game.
This is also where the VA backed loans can be a benefit to sellers, as VA loans have a set process for appraisal reconsiderations called the Tidewater process. This is a process that gives a homebuyer's real estate agent and lender 48 hours to submit additional comparable sales data if a VA appraiser believes a home's value will come in below the agreed-upon purchase price. If this process fails to bring the value up you can also request a formal reconsideration of value from the lender.
After 15 years in mortgage banking before I became a REALTOR®, I've read hundreds of appraisals from the lender's side of the table. The first thing I do when a seller's appraisal comes in low is figure out whether the number is defensible or beatable. Sometimes the smartest response is to challenge it, and sometimes it's to renegotiate quickly and protect the closing. Knowing which is which is the difference between losing money and saving the deal.
The best defense is pricing it right the first time
Most appraisal gaps trace back to a contract price that ran ahead of the current comps. In the frenzy of a strong offer, it's easy to forget that the appraiser is going to check the math a few weeks later.
That's why I price every listing to the current market data, not to last year's peak or to a Zestimate. When your list price and your accepted offer sit inside what recent sales support, the appraisal usually follows, and you avoid this whole scramble. If you want to understand how pricing connects to what you actually walk away with, my Texas seller net sheet breakdown (https://sherracameronrealtor.com/blog/Texas-Seller-Net-Sheet--What-You-Actually-Take-Home-at-Closing-) shows where every dollar goes at closing. And if you're also buying your next home, appraisal gaps can hit you from both sides, which I cover in my move-up buyer's guide for DFW (https://sherracameronrealtor.com/blog/Buying-a-Home-in-DFW-in-2026--The-Move-Up-Buyer--39-s-Complete-Guide).
It's also worth remembering that the condition and updates you bring to the table give the appraiser more to support. Smart pre-listing improvements, the kind I outline in which home updates actually pay off before selling (https://www.therealhappyporch.com/p/best-home-updates-before-selling-which-improvements-actually-pay-off), help your value hold up under scrutiny.
Frequently Asked Questions
Who pays for the appraisal, and can the seller see it?
In a financed Texas transaction, the buyer typically pays for the appraisal as part of their loan process. The appraisal belongs to the buyer and their lender, so as the seller you don't automatically receive a copy. Your agent can usually learn the appraised value and the reasoning through the buyer's agent, which you'll need in order to negotiate or pursue a Request for Reconsideration of Value.
Can a buyer back out if the appraisal comes in low?
It depends on the contract. If the buyer kept the appraisal protection in the Third Party Financing Addendum, they can generally terminate and recover their earnest money when the home doesn't appraise. If they waived that protection to strengthen their offer, they're on the hook to cover the gap or risk their earnest money by walking. Always confirm the specific terms with your agent.
How often do homes appraise below the contract price in DFW right now?
Low appraisals are more common in 2026 than they were during the 2021 and 2022 boom, largely because prices have softened and comparable sales lag the current market. Homes across DFW are selling at roughly 96 to 97 percent of list price, and with about a quarter of listings taking price cuts, appraisers are working with a moving target.
Is a Request for Reconsideration of Value worth trying?
If you have a genuine case, such as better comps or a factual error in the report, yes. DFW reconsiderations succeed roughly 15 to 20 percent of the time, and a win often adds ten to thirty thousand dollars in value. It costs you nothing but a few days, and it's usually worth pursuing before you agree to a price reduction.
What happens if the seller and buyer can't agree after a low appraisal?
If neither side will move and the buyer has appraisal protection in the contract, the buyer can terminate and the home goes back on the market. Before you let that happen, it's worth weighing what your home would realistically re-list and sell for against the reduction on the table. Sometimes holding firm costs more than the gap you were arguing over. If the appraisal is an FHA appraisal, it sticks to the property regardless of the buyer moving forward, so that should be considered when deciding to move forward or take your chances putting it back on the market.
The bottom line
A low appraisal feels like the deal is falling apart, but it's really just a negotiation with a clear set of moves: reduce, have the buyer cover the gap, split it, or challenge the number with an ROV. The right call depends on your contract, your buyer, and what your home would truly fetch if it went back out. That's not a decision to make alone under a closing deadline.
Wondering whether your home would appraise for what you're hoping to list it at? Start with a real number, not an online estimate. Get your free home valuation (https://sherracameronrealtor.com/evaluation) and price it to close the first time.
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About Sherra Cameron, REALTOR®
Sherra Cameron is a top 3% REALTOR® serving Plano, Carrollton, The Colony, and Lewisville in the Dallas-Fort Worth metroplex. With 15 years of prior mortgage banking experience, she helps buyers and sellers make financially sound decisions that build long-term wealth through real estate. Connect with Sherra at sherracameronrealtor.com.
Sherra Cameron, REALTOR® | REAL Brokerage