What Happens If My Home Appraisal Comes in Low on the Big Island of Hawaii?
You’ve accepted an offer…
Everything is moving forward…
Then the appraisal comes backlower than the purchase price.
This is one of the most stressful moments for sellers.
Because now the question becomes:
“Is this deal about to fall apart?”
Julie Wettstein, Realtor RB-21086is a real estate agent on the Big Island of Hawaii helping sellers navigate appraisal issues so they protect their price and keep deals together.
First, What Is an Appraisal?
If your buyer is using a loan:
• The lender orders an appraisal
• The appraiser determines the home’s value
• The bank will only lend based on that value
So if your home is under contract for $900,000…
…but the appraisal comes in at $850,000…
There’s a $50,000 gap.
Why This Matters
The lender will not cover that difference.
So now one of three things has to happen.
Your 4 Options as a Seller
1. Renegotiate the Price
You lower the price to match the appraisal.
This is the most common solution…
…but not always the best one.
2. Buyer Brings Extra Cash
The buyer can cover the gap out of pocket.
Example:
• Appraisal: $850,000
• Contract: $900,000
• Buyer brings $50,000
This depends on how strong and motivated the buyer is.
3. Meet Somewhere in the Middle
Very common.
You and the buyer split the difference.
This keeps the deal moving while sharing the impact.
4. Challenge the Appraisal
In some cases:
• You can provide better comparable sales
• Ask for a reconsideration
This doesn’t always work… but it’s an option.
Why Appraisals Come in Low on the Big Island
This market has some unique challenges:
• Fewer comparable sales in certain areas
• Large variation between neighborhoods
• Unique properties (views, acreage, location)
• Rapid market changes
A home in Kona vs Hilo vs Waimea can be very different.
Appraisers don’t always capture that perfectly.
Real Example
A seller in Waikoloa accepted a strong offer…
But the appraisal came in below the contract price.
Instead of reacting emotionally, we:
• Reviewed the appraisal
• Looked at buyer strength
• Negotiated a middle-ground solution
Result:
• Buyer stayed
• Seller protected most of their value
• Deal closed successfully
Biggest Mistake Sellers Make
Panicking and dropping the price immediately.
You have options.
And the right move depends on:
• Buyer strength
• Market conditions
• Your timeline
How to Reduce the Risk of a Low Appraisal
Before you even list your home:
• Price based on strong recent comps
• Understand your micro-market
• Prepare your home properly
• Work with a strategy (not guesses)
Good pricing upfront reduces this risk significantly.
FAQ
Can a deal fall apart because of a low appraisal?
Yes, if no agreement is reached.
Is a cash offer safer?
Yes, because there’s no appraisal requirement (in most cases).
Can I refuse to lower my price?
Yes—but the buyer may walk away.
How common is this?
It happens, especially in changing markets or unique properties.
Next Step
If you’re thinking about selling, it’s important to understand how appraisal risk fits into your strategy.
That way:
• You’re not surprised
• You know your options
• You make confident decisions
Julie Wettstein, Broker RB-21086
Island Homes by Scuba Julie
Big Island, Hawaii
(808) 345-6934
BigIslandDreamHomes.com
[email protected]
