A low appraisal does not usually kill a home sale, but it does change the math. Your lender will only lend against the value the appraiser assigns, not the price you agreed to pay. That leaves a gap. If you are buying or selling a home in 2026 and the number came back short, a Glen Ellyn, IL residential real estate lawyer can help you sort out what your contract actually allows.
What Does a Low House Appraisal Mean to Your Lender?
If the loan ever goes bad, the house is what the lender gets back. So the loan amount is based on the appraised value, not the contract price.
Suppose you agreed to pay $500,000 and planned to put 20 percent down. The appraisal comes in at $475,000. If your lender limits the loan to 80 percent of the appraised value, the maximum loan would drop from $400,000 to $380,000. That would leave you needing an additional $20,000 in cash unless the price or financing changes.