How Does the Appraisal Affect My Mortgage and Closing in Florida?
The appraisal determines whether your lender will fund the loan at the agreed purchase price. A low appraisal can derail a transaction — here is how appraisals work in Florida and what buyers can do when the appraisal comes in low.
How Does the Appraisal Affect My Mortgage and Closing in Florida?
The appraisal is one of the most important steps in a financed Florida real estate transaction. It determines whether your lender will fund the loan at the agreed purchase price — and a low appraisal can create significant complications.
What Is a Home Appraisal?
A home appraisal is an independent assessment of a property's market value, conducted by a licensed appraiser. Your lender orders the appraisal to confirm that the property is worth at least the amount you are borrowing.
Lenders will not lend more than the appraised value of the property. If you agree to pay $600,000 for a property but the appraiser values it at $575,000, your lender will only lend based on the $575,000 appraised value.
What Appraisers Look At
Appraisers assess value by comparing the property to recent sales of similar properties (comparables or "comps"). They consider:
- Location, lot size, and proximity to the water
- Square footage, bedroom and bathroom count
- Age and condition of the property
- Recent renovations and upgrades
- Comparable sales in the area within the past 6–12 months
What Happens If the Appraisal Comes In Low
If the appraisal comes in below the purchase price, you have several options:
1. Renegotiate the price. Ask the seller to reduce the price to the appraised value. Many sellers will agree rather than risk the deal falling apart.
2. Make up the difference in cash. Pay the gap between the appraised value and the purchase price out of pocket. For example, if the purchase price is $600,000 and the appraisal is $575,000, you would need to bring an additional $25,000 to closing.
3. Challenge the appraisal. If you believe the appraisal is inaccurate, you can request a reconsideration of value (ROV) and provide the appraiser with additional comparable sales they may have missed.
4. Cancel the contract. If your contract includes an appraisal contingency, you can cancel and receive your earnest money back.
The Appraisal Contingency
An appraisal contingency protects you if the appraisal comes in below the purchase price. It gives you the right to cancel the contract and receive your earnest money back if the property does not appraise at or above the purchase price.
In competitive markets, some buyers waive the appraisal contingency to make their offer more attractive. This is a significant risk — if the appraisal comes in low and you have waived the contingency, you must either make up the difference in cash or lose your earnest money.
FAQ
Who pays for the appraisal in Florida?
The buyer typically pays for the appraisal, which is ordered by the lender. The cost is usually $400–$700 for a standard residential appraisal.
When does the appraisal happen?
The appraisal is typically ordered after the contract is executed and the inspection period has passed. It usually takes 1–2 weeks to complete.
Can I see the appraisal report?
Yes. As the borrower, you have the right to receive a copy of the appraisal report.
Questions about the appraisal process for your Emerald Coast purchase? I can help you navigate it.
— Kinsey Haddock P.A., Broker Associate | Coldwell Banker Realty — Panhandle | License #BK3253849
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Written by
Kinsey Haddock P.A.Kinsey Haddock P.A. is a Broker Associate and REALTOR® with Coldwell Banker Realty, specializing in coastal real estate across the entire Florida Panhandle — from St. George Island and the Forgotten Coast to Panama City Beach, Scenic Highway 30A, and Destin.