Appraisal came in low

I had this happen, but I was the purchaser.
My only suggestion is to look through the report very closely. I researched the listings for all of the comps they used in my appraisal and found that they 1. had one sales price wrong 2. described one comp as renovated(though the listing said sold 'as is' 3. Used an all-cash only estate sale as a third 'renovated' comp.
I brought this to the attention of the appraisal firm and they said I had enough reason to have it redone. I chose to not take it further as it would have held up my mortgage, but maybe you'll have more luck.

It's very common nowadays, and difficult to fight. Your attorney and sales agent should have some thoughts on the matter, but I'll give you mine, for what it's worth.

Your listing agent should jump in immediately with a massive pile of higher-priced comps. (She/he should have these at the ready). Sometimes it can help - although usually it's most helpful if the agent gives these to the appraiser prior to the appraisal being submitted to the bank. If your team can demonstrate that there are closer comps than those listed by the appraiser, you may be able to make some headway - especially of the appraiser is unfamiliar with the immediate neighborhood and may have missed some defects in the selected comps.

Still, it's tough to get the bank to reconsider. Your contract will likely direct you to a resolution, so ask your attorney. But you usually have a few options. The buyer can put down additional monies to keep the loan-to-value at the right ratio (this is ideal, as it costs you nothing). You can reduce the sale price to match the appraised value (not ideal, but may beat putting it back on the market). Or you can cancel the contract and refund the deposit, seeking out another buyer. You may be able to meet somewhere in between, with your buyers putting a little more down, and you reducing the price a bit.

The best case scenario is if you have a serious buyer who values the home above the appraisal numbers. This buyer will want to hang on to the apartment, and will be willing to make some sacrifices to do so. If you are willing to make a few adjustments as well, you have a better chance of hanging on to your buyer and - soon - getting on with your life. Good luck!

Tina
(Brooklyn broker)

This happened to me (as a buyer) over 7 years ago... the biggest problem the appraiser had was they couldn't find any decent comps in that area. It totally blew my purchase (and, I had already been approved by the board). At the time, I was bummed. But, in retrospect, I found a better apt (eventually).

This happened to us last summer while trying to refi our mortgage. The appraiser used comps that weren't even in the same universe. She took the broker's square footage as fact. Laughably inflated in most cases, and then proceeded to measure our apt with a laser tape measure. She comped our 3br brownstone against 2br brownstone units, but only gave us 25k for the 3rd BR. We complained and provided many higher-priced "actual" comps but in the end she refused to alter the appraisal. Two to three years ago appraisers got caught with their pants down way over-inflating the value of apts in an up-market to keep the business churning and now they are overcompensating in a down market. All I can say is good luck getting the appraisal altered in a positive or timely fashion.

caramia - this happens quite often nowadays. You can try to provide the buyer with comps in the building that perhaps the appraiser didnt use, if you know of any. If there are an similar units in the subject building that sold within the last 6 months, that will weigh heaviest. The bank can do an appraisal reconsideration and if that doesnt work the buyer can try another bank. But if the comps arent there then the comps arent there. If you think it's a matter of an appraiser's opinion and can be looked at 2 ways then it may be worth a shot. It's up to the buyer which way they want to go of course. sunny.hong@bankofamerica.com