Just days before my clients were to close on the sale of their property, I received the call every real estate agent dreads. It was the buyer’s agent informing me that the home’s appraised value was significantly below the contract price. Both of us were shocked. With some appraisals, you’re holding your breath waiting for the results, but not this one. There were good supporting comps for the contract price. Just weeks earlier, the property had been part of a failed transaction, and it had appraised well above the contract price. In total, there was about an 8% difference between the two appraisals.
The Appraised Value is Less Than the Contract Price. Now What?
If the buyer is making the minimum down payment required by the lender for a conventional loan, you generally have three options:
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The seller can reduce the sales price.
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The buyer can put more cash into the deal.
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You can dispute the appraisal, or some variation of all three.
In my client’s case, it appeared that the buyer had no more money to put into the deal, and I knew my clients were not in a position to lose the deal; they would most likely have to settle for the new appraised value if we were unable to successfully contest the appraisal.
Navigating the Appraisal Dispute Process
Keep in mind that by the time the appraisal is complete, your lender has invested significant time and expense in your transaction, and they want you to close. However, without justification, they can’t just reorder appraisals until they receive one that meets value. They must have a compelling reason to challenge the appraisal, typically provided through a Reconsideration of Value (ROV).
An ROV is a formal document used by the disputing party to make their case for changing the appraised value. Typically, the seller’s real estate agent is responsible for drafting the ROV. It would be nearly impossible for a homeowner to write the ROV independently, as the agent must access historical data through the MLS.
When preparing the ROV, be intentional about what you include. Carefully evaluate each point to determine whether it will support or potentially weaken your valuation case. Additionally, maintaining a neutral and unemotional tone is essential, and AI tools are excellent for this purpose.
Steps to Dispute a Home Appraisal in Texas
1. Request Documents
Your agent should request a copy of the appraisal from the Buyer’s Agent and a Reconsideration of Value (ROV) form from the lender. Depending on where you are in the closing process, your agent may also need to negotiate an extension to the closing date to allow sufficient time to resolve the appraisal dispute.
2. Check for Technical Errors
On the first page of the Uniform Residential Appraisal Report, verify living area square footage, lot square footage, and number of rooms. If there is a substantial difference between the square footage advertised in the listing and the square footage in the appraisal, check the Building Sketch for measurement errors. These drawings are often created in haste, and I have found errors in them. Record all discrepancies clearly on the ROV form.
3. Review Quality and Condition Ratings
In the Sales Comparison Approach section, your property is referred to as the Subject Property. Verify your property’s Quality of Construction (rated Q1-Q6) and Condition (rated C1-C6). Definitions for these ratings are provided in the appraisal report. Accuracy in these ratings is critical for fair comparisons with other properties. Clearly note any discrepancies or inaccuracies on the ROV.
4. Review Comparable Sales (Comps)
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Relevance of Comps: Your agent will need to review the MLS and verify that the most relevant comps were used in the appraisal. Ideally, this would include the most recent sales of comparable properties found in your subdivision and within the same elementary school zone. Depending on the number of recent sales in your subdivision, the appraiser may have to settle for less-than-ideal comps and adjust accordingly. If the most relevant comps were not used in the appraisal, notate them in the ROV.
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Age of Comps: When reviewing the comps used by the appraiser, ensure they are recent. It’s best practice to use comps that sold within the last 90 days. It’s not uncommon to see older comps when there are fewer sales in the area surrounding the subject property. If older comps (more than 4–5 months old) are included, and newer comps are available, question their necessity in the ROV.
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Similarity of Comps: Comps should closely match your property in terms of age (within ±5 years), square footage (within ±10%), quality rating, condition rating, and ideally in the same subdivision and elementary school zone. Significant deviations should be highlighted clearly in your ROV.
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Adjustments: You’ll notice that the subject property’s price isn’t adjusted—instead, the comps are adjusted to make them more comparable to your home. For instance, if a comp is much larger or smaller than the subject property, you’ll see an adjustment in that comp’s price to level the playing field. As you review, do a quick gut check. If a comp has a hefty price adjustment, there should be a clear reason. Say both the comp and subject are rated C3 for condition, but one has updated flooring or updates, and the other doesn’t—expect to see an adjustment. Wondering how the appraiser knows what the inside of a comp looks like? The same way your agent does—by pulling up the historical photos from the MLS. If an adjustment doesn’t make sense or isn’t supported by data, flag it in your ROV and explain why.
5. Provide Proof
Attach a detailed list of updates, repairs, and their costs to the ROV. If you’re trying to show that the home is well-maintained with no deferred maintenance, include even the everyday fixes—things like HVAC tune-ups, appliance repairs, and plumbing maintenance. For big-ticket items, include receipts or invoices. Don’t worry if you’re missing a receipt—just make a note like, “No receipt, but can provide proof of payment,” and include a snippet of the credit card or bank statement if possible. To keep everything organized, break the list down into three categories: Updates and Renovations, Major Repairs, and General Maintenance.
6. Timeliness
Completing and submitting the ROV swiftly is critical, but always have your agent provide a final draft for your review before submission to ensure accuracy and thoroughness.
7. Appraisal Review
After the ROV is submitted, the appraisal firm will have a specified time to respond. If the lender finds the response unsatisfactory, they may order a new appraisal to ensure an accurate valuation.
Appraisals Are Part Art, Part Science
There’s no getting around it—appraisals are subjective, and appraisers are only human. While appraisers follow established guidelines, the process still involves interpretation, particularly when selecting comparable sales and determining how to adjust for differences. If something doesn’t seem right in the report, it’s worth taking a closer look. A well-documented ROV that identifies inconsistencies or errors causes the original appraiser to reevaluate their work and may provide justification for the lender to reject the appraisal and order a new one.
What Happened in My Client’s Case?
Remember my clients? Their first appraisal was a mess. In the ROV, I identified additional comps that were more relevant to the subject property. Of the comps the appraiser used, I highlighted several that were old, some nearly a year old. I pointed out multiple comps that were significantly larger than the subject home, in some cases by as much as 20%. I identified several comps that were outside the subject’s elementary school zone. Additionally, I provided a solid justification for why the home warranted a higher condition rating, accompanied by documentation detailing updates, major repairs, and recent maintenance.
Ultimately, the original appraiser didn’t revise the report sufficiently to satisfy the lender, so a new appraisal was ordered. The new appraisal came in above the contract price, validating the work that went into contesting the first valuation. It was rewarding to see that effort translate into real savings for my clients—tens of thousands of dollars, in fact.
About the Author
Edwin Jones is a Private Client Real Estate Agent serving in the North Dallas Tollway corridor, from Park Cities to Plano to Prosper. An avid investor and serial entrepreneur, he holds an MBA and a bachelor's degree in Economics from Southern Methodist University. With a deep understanding of luxury home design, finance, marketing, and real estate investing, Edwin brings a well-rounded, strategic perspective to every client interaction. His writing reflects the same level of intentionality: starting with a compelling premise, organizing key insights, weaving in personal experience, and using AI to generate a first draft, which he then polishes through editing, fact-checking, and plagiarism screening. His commitment to excellence ensures that the content is informative and trustworthy for anyone navigating the world of luxury real estate.
