Buying a house can feel like one long list of hurdles. You find a place you love, make an offer, negotiate with the seller, get through inspections, secure financing, and eventually start counting down the days until you get the keys.
One homebuyer thought they were almost there. Their offer had been accepted on a home listed for $1.025 million, and they were under contract for $1 million with just one week left before closing.
Then the appraisal came back.
The house was valued at $925,000, $75,000 less than what they had agreed to pay. They could cover the difference, but the house was already at the top of their budget, and suddenly a purchase they had been excited about felt like a much bigger financial risk.
A low appraisal changed the entire conversation
An appraisal coming in below the purchase price doesn’t necessarily mean a buyer is making a bad deal, and an appraisal isn’t a guarantee of what a property could sell for in the future. But a $75,000 difference was enough to make these buyers reconsider how much they were willing to pay.
They loved the house and didn’t immediately walk away. Instead, they went back to the sellers and offered $950,000, still $25,000 above the appraised value, but the sellers held firm at the original $1 million purchase price.
They tried to find a middle ground
Rather than giving up, the buyers eventually increased their offer to $975,000. They were even willing to discuss other possibilities, including having the sellers contribute toward buying down their mortgage rate, but the sellers still wouldn’t move from $1 million.
Their real estate agent offered to cut her commission in half to help keep the deal together, but that would have made only about a $5,000 difference. At that point, the buyers still had a much larger decision to make.
Being able to afford something doesn’t always make it comfortable
This may be the most relatable part of the situation. The buyers said they could afford the difference, but they were also already purchasing at the very top of their budget.
There’s a big difference between having enough money to complete a purchase and feeling comfortable with what that purchase leaves you afterward. A house can come with repairs, maintenance, and plenty of unexpected expenses after closing, so using more of your available cash than planned can change the financial picture considerably.
Walking away gets harder once you’ve pictured yourself living there
Taking emotion out of the decision can be difficult when you’ve already fallen in love with a house.
By the time you’re a week from closing, you may have already imagined where the furniture will go, what you’ll change, and what life will look like there. Walking away can start to feel less like passing on a purchase and more like losing a home you already thought was yours.
They ultimately walked away
After the sellers refused their $975,000 offer, the buyers decided the financial risk was more than they were comfortable accepting. They used their appraisal contingency to end the contract.
It wasn’t an easy decision. But they took away one useful thing from the experience: they discovered a community where they really wanted to live and could now look for another home there.
There isn’t always a clear right answer
A low appraisal doesn’t automatically mean a buyer should walk away. Appraisals can vary, and paying above an appraised value may still make sense depending on the property, local market, available cash, comparable sales, and how long someone expects to own the home.
But those factors have to be weighed against what stretching to make the deal happen would mean financially. Coming up with another $75,000 doesn’t necessarily mean spending it is the right decision, especially when you’re already at the top of your budget.
For these buyers, the answer eventually became clear. They loved the house, but not enough to ignore the feeling that the numbers no longer made sense.
And sometimes that’s the hardest part of buying a home: realizing the house you want and the deal you’re comfortable making aren’t always the same thing.
