Your agent just called. The appraisal came in low.
Maybe $10,000 below the contract price. Maybe $25,000. In Lancaster County’s competitive market — where homes routinely sell at 102% or more of list price — this happens more than buyers expect. You offered above asking to win the house. Now the appraiser says the math doesn’t pencil.
Here’s what matters right now: a low appraisal doesn’t automatically kill the deal. But it puts you at a real decision fork, and the path you can take depends on something your agent should have handled when you made your offer.
What the Appraisal Actually Does
Your lender ordered the appraisal through a third-party management company — that’s required by federal law to prevent any connection between the lender and the appraiser. You paid for it upfront (typically $450–$800 in Pennsylvania). And the number that came back isn’t just a data point: it’s the ceiling on what your lender will finance.
If you agreed to buy a home for $400,000 and the appraisal came in at $385,000, your lender will only lend against $385,000. That $15,000 gap — the appraisal gap — has to go somewhere. Either the price comes down, you bring extra cash to settlement, or the deal doesn’t close.
This is where a lot of buyers get confused about what they’re actually entitled to do.
The Form You Need to Know About: ACA
Pennsylvania’s Standard Agreement for the Sale of Real Estate does not automatically include an appraisal contingency. That’s a critical distinction that catches a lot of buyers off guard.
If your agent added the Appraisal Contingency Addendum (Form ACA) to your offer, you have formal contractual protection. If the appraisal comes in below the threshold specified in that addendum, you can terminate the Agreement of Sale and get your deposit back.
If Form ACA was not included — which is common in competitive situations where buyers waive it to strengthen their offer — your ability to walk away and keep your deposit is significantly more limited. Your financing contingency still protects your deposit if the lender declines the loan entirely. But if the lender says “we’ll approve it at the appraised value,” you don’t automatically have the right to exit over the gap.
One more important nuance: nothing in Form ACA requires the seller to lower their price. The addendum gives you options — it doesn’t dictate the outcome of any negotiation.
Before you make any moves, make sure you understand exactly what’s in your Agreement of Sale. This is the moment to find out. If you’re working toward a competitive offer and haven’t thought through the ACA question yet, here’s a full breakdown of how buyers in Lancaster County structure winning offers — including when waiving ACA makes sense and when it doesn’t.
Your Four Options When the Appraisal Comes in Low
1. Challenge the appraisal (Reconsideration of Value)
Your agent can request a Reconsideration of Value (ROV) through your lender. This means submitting additional comparable sales the appraiser may have missed — ideally recent sales within 90 days and a reasonable geographic radius that support a higher value.
This works best when the appraiser made a factual error, used older or less relevant comparables, or missed a recent sale that clearly supports the contract price. It takes roughly one to two weeks and isn’t guaranteed to succeed. But when the comps are there, it’s the right first move.
Your agent’s knowledge of the Lancaster County market is the key variable here. If they can pull three strong comps within a mile that closed in the past 60 days at or above your contract price, the ROV has real teeth. If the market just doesn’t support the price, no amount of paperwork changes that.
2. Pay the appraisal gap
If you have the cash and you want the house, you can cover the difference yourself.
In practice, this means your out-of-pocket costs at settlement effectively increase. If you planned to put 10% down on a $400,000 purchase ($40,000) and the appraisal came in at $385,000, you now need $40,000 plus the $15,000 gap to keep your loan-to-value ratio intact — $55,000 total at settlement.
Some buyers in Lancaster’s market write appraisal gap coverage clauses directly into their original offers, committing upfront to cover a gap up to a specified dollar amount. It’s a competitive offer strategy, but it means being financially prepared to follow through. If you’re not sure whether you’re in a position to do that, this is the time for an honest conversation with your agent and lender.
3. Negotiate with the seller
This is the most common resolution — and in 2026’s more balanced market, sellers are more open to renegotiation than they were a few years ago.
You can ask the seller to lower the purchase price to the appraised value, split the difference (you pay part of the gap, they lower the price for the rest), or provide a seller concession at settlement to offset your additional out-of-pocket costs.
The seller isn’t obligated to agree to anything. But a deal that falls apart doesn’t benefit them either — especially if relisting means facing the same appraisal problem with the next buyer. Most reasonable sellers understand this, and most agents can find a middle ground without the deal dying.
4. Walk away
If Form ACA is in your Agreement of Sale and the appraisal came in below the specified threshold, you can terminate and recover your deposit.
If it isn’t, walking away is more complicated. You’d need to work through your agent — and potentially a real estate attorney — to understand your options and protect your deposit before making any decisions.
Before you decide to walk, think through this honestly: is the appraisal gap the actual problem, or is the house genuinely not worth fighting for at this price? Those are different situations with different answers. Sometimes a low appraisal is the market telling you something you needed to hear.
If You’re the Seller: What This Means for You
A low appraisal on your accepted offer doesn’t have to end the deal, but it does require a decision.
Your options mirror the buyer’s: lower the price, hold firm and ask the buyer to cover the gap, challenge the appraisal with better comparable sales, or let the deal fall apart and relist. In Lancaster’s market, a failed contract puts a visible question mark on your home in future buyers’ minds — it’s not a neutral move.
The most common outcome is splitting the difference. The buyer covers half the gap; you lower the price for the other half. It keeps the deal alive and distributes the impact across both parties.
Understanding how your settlement costs and net proceeds work helps here — what looks like a $15,000 problem on the contract price is a different number when you factor in what you were already netting after commissions, transfer taxes, and other costs. If you haven’t mapped that out yet, here’s a full breakdown of what Lancaster County sellers pay at settlement.
How Common Is This in Lancaster County Right Now?
Appraisal gaps are an inherent byproduct of a competitive seller’s market. When homes sell at 102–103% of list price and buyers are regularly offering above asking to win, there’s always a chance the appraiser looks at the same evidence and draws a more conservative line.
It doesn’t happen on every transaction. But in Lancaster County right now — with a median sale price around $364,000 for the county and homes averaging just 15–23 days on market — it’s not unusual, especially in the $350,000–$500,000 price range where buyer competition is strongest.
The best defense is a well-constructed offer going in: understanding your contract protections, knowing your gap coverage capacity, and working with an agent who can negotiate effectively if a gap does appear. That’s the combination that keeps a low appraisal from becoming a deal-killer.
For more context on where appraisals fit in the full Lancaster County homebuying timeline, see How Long Does It Take to Buy a Home in Lancaster County.
Frequently Asked Questions
Can the seller refuse to lower the price after a low appraisal in Pennsylvania?
Yes. Pennsylvania’s Standard Agreement for the Sale of Real Estate does not require the seller to reduce the price just because an appraisal came in low. The Appraisal Contingency Addendum (Form ACA) gives the buyer contractual options — including the right to terminate — but it doesn’t obligate the seller to accept a lower price. Both parties have to agree on any price change, just as they did on the original contract terms.
What is the Appraisal Contingency Addendum (Form ACA) in Pennsylvania?
Form ACA is a Pennsylvania-specific addendum to the Agreement of Sale that makes the purchase contingent on the property appraising at or above a specified value. If the appraisal comes in below that threshold, the buyer can terminate the agreement and recover their deposit. Form ACA is not included automatically in the standard PA Agreement of Sale — it must be added to the offer. In competitive markets, some buyers choose not to include it to strengthen their offer, but this removes the protection.
Will I lose my deposit if the appraisal comes in low and I want to walk away?
It depends on whether Form ACA is in your contract. If it is, and the appraisal came in below the threshold, you can terminate and get your deposit back. Without Form ACA, your options are more limited — your financing contingency still protects your deposit if the lender declines the loan entirely, but if the lender is still willing to approve the loan at the appraised value, you may not have the contractual right to exit without risking your deposit.
How long does a Reconsideration of Value (ROV) take in Pennsylvania?
Typically one to two weeks from the time your agent submits the request through your lender. The appraiser reviews the additional comparable sales provided and either adjusts the value or issues a written explanation for maintaining the original figure. Results aren’t guaranteed — the appraiser isn’t required to change their opinion — but a well-supported ROV with strong comps can be effective, especially if the original appraisal missed recent relevant sales.
Does a home need to appraise at the full purchase price for the deal to close?
Not necessarily. If the appraisal comes in low and neither party terminates, you can still close — as long as the buyer can cover the gap between the appraised value and the purchase price. The lender will only loan against the appraised value, but the buyer can bring extra cash to settlement to make up the difference. Whether that’s financially feasible depends entirely on the buyer’s resources and how large the gap is.
A low appraisal is stressful — but it’s a solvable problem in most cases. The right move depends on what’s in your Agreement of Sale, the size of the gap, the seller’s flexibility, and how much this particular house matters to you.
If your appraisal just came in below the contract price and you want to talk through your options before making any moves, I’m happy to walk you through it. I’ve helped buyers and sellers in Lancaster County navigate this exact situation — and there’s almost always a path forward. Reach out anytime.
About Craig Hartranft
Craig Hartranft is a top-ranked Lancaster County REALTOR® and Founder of The Craig Hartranft Team, Berkshire Hathaway’s #1 real estate team in Lancaster County, with 460 homes sold and $195M+ in sales in 2025, plus over 1,400 five-star reviews across Google and Zillow.