Mortgage loan and valuation guide
What happens if the appraised value is lower than the sales price?
The fact that the appraisal value is lower than the agreed sales price does not mean that the transaction is automatically completed or that the real estate is definitely mispriced. However, the collateral value that the bank can use and the price that the buyer will pay differ; this requires recalculating the loan amount, required equity, and offer decision.
One-minute summary
What to remember before deciding
- See the sales price, appraisal value and the loan amount approved by the bank as separate figures.
- Please note that the loan/value ratio is determined by the current BRSA limits and the bank's evaluation.
- Request a copy of the report and check the legal, physical and precedent findings.
- Calculate the additional down payment created by the lower value, along with transaction expenses and cash reserve.
- Make the decision to negotiate, additional equity, reexamine or abandon based on the offer terms.
First separate three separate numbers from each other
The price agreed with the seller is the result of bargaining between the parties. Appraisal value is the opinion reached by the authorized appraisal institution by examining the legal, physical and market data of the real estate on a certain date. The loan that the bank will approve is determined by factors such as this value, current regulatory limits, energy class, current home ownership and the bank's credit evaluation.
For this reason, a single-rate calculation in the form of "if the appraisal shows 8 million, the bank will definitely give this much" is not reliable. BRSA's decision dated January 29, 2026 differentiates loan/value ratios according to housing value ranges and energy class; Previous homeownership practices may also be effective. The current maximum limit does not necessarily mean that the bank will approve that amount.
| Digit | Who determines? | Role in the decision |
|---|---|---|
| Selling price | Buyer and seller | Agreement fee to be paid at the title deed |
| Appraisal value | Authorized valuation agency | Input to collateral and risk assessment |
| Approved credit | Bank | Financing available based on regulatory and client risk |
Find the reason for the difference within the report
Valuation is not the simple average of listing prices. Location, building age, area, floor, facade, physical condition, license and project compatibility, title deed quality, comparable sales and valuation date may affect the result. Discussion of the legal status value and the current situation in the report also becomes important depending on the changes in the real estate.
CMB emphasizes that the valuation is made on a certain date and the value in the report may change as market conditions change. Instead of immediately accepting the low result as a mistake, read the precedents used, measurements, real estate identity and legal-physical explanations. The report may also raise a new risk question about the property before price negotiation.
- Are the island, parcel, independent section and address correct?
- Is the gross-net area consistent with the area used in the report?
- Can peers be compared in terms of location, history, quality and size?
- What notes have been made for the project, license, occupancy and current use?
- Is the value difference due to market opinion or correctable material data?
Request a copy of the report; establish the objection with concrete data
The Department of Commerce states that the lender must inform the consumer that he or she may request a copy of the appraisal report. Ask the bank for an accessible copy of the report and any reconsideration or appeal procedure. Instead of just saying “prices are higher in the surrounding area,” provide verifiable data such as an incorrect area, incorrect individual section, or comparable actual transaction.
Applying to another bank may result in a new valuation process; however, it does not guarantee higher results or credit approval. It should not be assumed that the valuation fee has been paid to the third party organization and that the fee will be automatically refunded if the loan is not approved. Learn the fee and procedure in writing from the bank before applying.
Correct objectionChallenge the verifiable data in the report, not the opinion of value.Incorrect area, incorrect property identification or overlooked document are grounds for concrete investigation; Only the targeted loan amount is not a valuation criterion.
Calculate the new down payment requirement with the entire transaction budget
When the appraised value remains below the sales price, the possible loan amount may be calculated on a lower basis. If the seller does not change the price, the difference is covered by the buyer's equity. Title deed fee, revolving fund, loan-related expenses, moving and possible renovation budget should be added to this difference.
Just because you can afford the additional down payment doesn't mean covering it is the right decision. Depleting the emergency reserve, resorting to expensive short-term borrowing, or zeroing out the necessary renovation budget may undermine the sustainability of the operation. Retest the result with balanced and cautious interest-maturity scenarios.
Approved credit may be less than the regulatory maximum; The written approval of the bank must be taken as basis.
Consider negotiation, additional equity and opt-out options with the contract
If the report shows that the property is incorrectly described, the correction process can be initiated. If the market value is really far from the sales price, renegotiation may be on the agenda. The buyer may choose to use additional equity, move to another property, or abandon the transaction as permitted by the offer conditions. None of it is automatic; Time, cost and contract outcome are different.
If credit or minimum appraisal value is a prerequisite for the transaction for you, it is important to clearly arrange this in the deposit and offer document before payment is made. The subsequent low value alone may not produce a clear result regarding the refund of the deposit in the absence of a written condition. Concrete documents and contracts should be evaluated by a lawyer working in real estate law.
- Are there correctable factual errors in the report data?
- Does the seller re-evaluate the price in light of new information?
- Is there a safe cash reserve remaining after additional equity?
- Are there clear terms and deadlines for credit and appraisal in the offer?
- What are the deposit, fee and schedule consequences of opting out?
Frequently asked questions
Clear, concise answers
01Does the bank grant the loan based on the sales price or appraised value?
It uses the bank collateral value, current BRSA loan/value limits and the customer's credit assessment together. The sales price alone does not determine the loan amount; The exact figure is determined with the written approval of the bank.
02Does a low appraisal value mean that the house is bad?
No. The difference may arise from market opinion, precedent selection, valuation date or legal-physical characteristics of the real estate. The entire report should be read to understand why.
03Can the expert report be objected to?
You may be asked about the bank's reexamination or objection process. The application must be made with concrete data such as incorrect measurement, incorrect real estate identification or verifiable precedent; New results or credit approval are not guaranteed.